WeBuyCars sold over 53,000 cars in four months

WeBuyCars sold 53,144 vehicles in the four months through January 2024 as the company recovers from a challenging 2023.

WeBuyCars’ parent company, Transaction Capital, said it delivered on key performance metrics in 2023, including increased volumes and growth in market share, despite lower earnings in the first half of the year.

WeBuyCars resumed its earnings growth trajectory in the first four months of the 2024 financial year, with core earnings growing 20% year-on-year.

WeBuyCars’ earnings performance in FY2023 was impacted by the change in market dynamics, as the factors contributing to unusually high used car demand and price inflation in 2022 reversed. 

The company said that the business’s agile operating model and quick stock turn enabled it to respond quickly to these market changes.

At the start of 2023, WeBuyCars adjusted its buying strategy to focus on lower-priced second-hand vehicles, in line with consumer demand. 

In the second half of 2023, margins stabilised, and operational efficiencies improved, driving the return to earnings growth in FY2024.

WeBuyCars’ revenue also continues to grow in line with the growth in the number of vehicles sold as the existing branch network matures. 

Revenue grew by 16% in the four months ended 31 January 2024 to R7.64 billion. WeBuyCars’ core earnings increased by 20% to R267 million. 

The company’s net debt of R1.03 billion consists primarily of mortgage loans on several vehicle supermarkets  (R734 million) and working capital facilities to fund inventory (R300 million). 

In the first four months of FY2024, WeBuyCars bought 53,855 vehicles and sold 53,144 vehicles, up 11% and 13%, respectively. 

The number of vehicles bought and sold continues to grow, with the number of vehicles sold reaching a record of 14,000 in January 2024.

In 2022, WeBuyCars made significant investments in its infrastructure, increasing its total capacity to 8,580 parking bays. 

During the 16 months to 31 January 2024, a further 1,864 bays were added to the national footprint, bringing the national capacity to 10,444 parking bays. 

Given the focus on leveraging existing strategic infrastructure investments, only one new branch was opened in the last nine months, resulting in inventory levels remaining consistent with the prior period. 

WeBuyCars’ physical footprint will be expanded further in 2024 and 2025 to meet the business’ growth aspirations.

These results came after Transaction Capital announced that it would proceed with the unbundling and listing of WeBuyCars.

In a SENS announcement released on 13 February, Transaction Capital said that, following further evaluation by the board, it has resolved to proceed with the unbundling and listing of WeBuyCars, subject to conditions. 

In addition to the listing, the company also announced that WeBuyCars, Transaction Capital and I VDW Holdings have considered various capital-raising initiatives.

These initiatives include the WeBuyCars Share Issue, the Private Placement of WBC Shares and a proposed PreListing Capital Raise.