From zero to 13,000 cars a month

WeBuyCars sold over 13,000 cars a month in the past financial year, as the company reported record revenue. However, its basic and headline earnings took a hit from once-off expenses associated with its JSE listing earlier this year. 

This once-off hit included fees for professional and legal advice related to the listing and JSE listing fees. In total, the cost reached just over R45 million. 

A more significant impact came from a fair value loss on call option derivatives, which totalled R426.4 million – a huge hit compared to the R157.7 million gain in the previous financial year. 

Overall, these two factors resulted in WeBuyCars’ headline earnings dropping by 58% to R343.9 million. 

The company said its core headline is a more accurate measure of the business’s performance. This measure strips out the impact of the JSE listing and the fair value loss on call option derivatives. 

WeBuyCars’ core headline earnings grew by 23.4% to R825.4 million from R661 million in the prior financial year. 

Due to a slight increase in the number of the company’s shares in issue, core headline earnings per share only increased by 9.9% to 217.4 cents. The company issued a dividend of 25 cents per share for the financial year. 

This growth was driven by the company’s strong performance in a difficult operating environment, which was characterised by low economic growth and increased pressure on consumer spending. 

In this environment, WeBuyCars managed to buy 167,741 cars in the past financial year – an increase of 17.8%. 

Crucially, the company’s sales of vehicles kept pace with the increased pace of buying, rising by 16.4% year-on-year to 165,185. 

This means that in the past year, the company sold an average of 13,765 cars every single month. 

As the business continues to scale, WeBuyCars expects to unlock further benefits from economies of scale. In the past financial year, it opened one new ‘supermarket’ and 14 new buying pods. 

In addition, the company’s attempts to diversify its income streams are gaining traction. Its insurance revenue increased to R201 million and contributed R84 million to earnings. 

WeBuyCars said it has plans to grow its monthly volumes to 23,000 vehicles and double its market share by 2028. 

To achieve this, the company plans to open another supermarket in East London and Rustenburg, with each able to accommodate 300 vehicles. It will also increase the size of its facility in Pietermaritzburg.

Apart from this expansion, the company will also open a bigger supermarket in Cape Town and in Pretoria. 

The journey so far

WeBuyCars was founded in 2001 by brothers Dirk and Faan van der Walt, with it all beginning with the love for a bargain and the enjoyment of being their own bosses.

From the start, it was clear that buying vehicles at the right price was essential—no matter how skilled they were at selling cars, overpaying would doom the business to failure.

Faan referred to this principle as the “goose that lays the golden egg,” a phrase prominently displayed in their offices to remind everyone of the company’s foundation for success.

Dirk, always aiming big, persuaded Faan to advertise on a billboard along the N1, featuring them holding cash, a bold move that turned them into a well-known name in Gauteng.

This led to the opening of their first car “supermarket” in Pretoria, capable of storing 100 vehicles, and within a year, they expanded to accommodate 700 vehicles.

For the first ten years, Dirk and Faan handled every aspect of the business themselves, but after launching a website, they realized the need to hire staff to buy and sell cars nationwide.

In 2014, they began recruiting buyers in major South African cities and continued growing by opening new supermarkets in Cape Town, Durban, and Centurion.

Faan emphasized that appointing like-minded individuals to key roles was crucial to their success, though he admitted that luck played a role in the hiring process.

During their expansion, the company began building proprietary software to track buyer behaviour in real-time and optimize pricing strategies.

Wynand Beukes, their chief digital officer, revealed that WeBuyCars now processes over 80 GB of data daily and stores over 1 TB of historical data.

Remarkably, the company achieved its growth organically by reinvesting all profits into new supermarkets, employees, and stock.

Faan and Dirk even forwent salaries during this period to maximize reinvestment in the business.

In just over 20 years, WeBuyCars has transformed from a two-person operation handling a few cars per month into a 2,800-employee powerhouse buying and selling over 13,000 cars monthly in the past financial year.