WeBuyCars is killing it

WeBuyCars sold over 66,000 cars in the past five months, generating R9.49 billion in revenue and R333 million in earnings. 

This was revealed by WeBuyCars’ parent company, Transaction Capital, in a voluntary trading update prior to the listing of WeBuyCars on the JSE on 11 April. 

WeBuyCars has produced incredible growth since its founding in 2001, from two employees selling a handful of cars a month to 2,800 employees selling over 14,000 cars a month. 

Most impressively, its growth has been entirely organic – not once did the company raise debt to fund its growth. Rather, it relied entirely on the profits generated by the business.

WeBuyCars revealed in its pre-listing statement that it aims to list at a market capitalisation of between R8.7 billion and R10 billion.

When listed, WeBuyCars will have 413.7 million shares, resulting in a share price between R21.03 and R24.17 per share. 

As part of its voluntary trading update, Transaction Capital outlined the performance of WeBuyCars over the past five months and compared it to the same period in 2023. 

This showed the company is still growing rapidly, but it also reflected the tough economic environment in South Africa, with cash generated declining compared to the previous period. 

While revenue and earnings grew by 16% and 25%, respectively, the cash generated from operations declined by 24%. 

The company’s cost-to-income ratio has also increased markedly over the past few years, from 49.5% in 2022 to 64% in at the end of February 2024. 

All the while, WeBuyCars has continued to grow the number of cars it buys and sells impressively. 

For the five months to the end of February, the company managed to buy 68,209 cars and sell 66,276 – increasing its inventory by 19%.

This means that WeBuyCars sells around 13,225 cars per month. In February, despite it being a shorter month, it sold 13,132 units. 

Transaction Capital said the sales per-day volumes remain in line with January 2024, and the momentum continues into March. 

Following WeBuyCars’ listing on the JSE’s main board on 11 April, Transaction Capital will no longer own any of the company’s shares.  

The WeBuyCars shares held by Transaction Capital will be distributed to shareholders of Transaction Capital, leaving the company with no stake in WeBuyCars. 

The company aims to raise between R900 million and R1.25 billion from unbundling its stake in WeBuyCars.