Transaction Capital is considering unbundling WeBuyCars and listing it separately on the JSE.
Transaction Capital CEO Jonathan Jawno revealed the possibility of a separate WeBuyCars JSE listing during the company’s results presentation on Tuesday.
He said they are exploring the unbundling in partnership with WeBuyCars founders Faan and Dirk van der Walt.
“We are exploring the merits of unbundling Transaction Capital’s shareholding in WeBuyCars with its subsequent listing on the main board of the JSE,” Jawno said.
WeBuyCars is the most valuable asset in Transaction Capital’s stable and a household name in the second-hand car market.
Jawno said it is uniquely positioned in the South African motoring sector and has tremendous technological capabilities, setting it apart from its competitors.
Although WeBuyCars had a challenging year, with a 14% decline in earnings to R658 million, it recovered with increased volumes in the year’s second half.
WeBuyCars added 1,759 bays to its national footprint in the first half of the year. This brought the national capacity to 10,339 parking bays.
The number of vehicles bought and sold continued to increase. Overall, the number of vehicles sold by WeBuyCars increased by 13% to 141,851 units in the 2023 financial year.
The increase in sales volumes was primarily driven by sales to private individuals, facilitating an increase in finance and insurance income.
WeBuyCars’ historical average annual growth rate for cars bought is 32%, and its historical average annual growth rate for vehicles sold is 31%.
Business-to-business sales via WeBuyCars’ eCommerce platform fell from 21.1% of total sales in 2022 to 15.4% of total sales in FY2023.
The decline, Transaction Capital explained, was due to the impact of the challenging economic environment on smaller dealerships.
In contrast, business-to-consumer online sales continue to grow and now account for 7% of total sales, up from 6.1% last year.
The company said that it was able to react swiftly to the change in the vehicle market demand and that margins had been impacted negatively by the shift in product focus.
The lower-priced vehicle margins can be seen in the earnings figures and may also have been impacted by more competition in the South African used vehicle market.
WeBuyCars’ management had a positive outlook for the medium to long term in the second-hand vehicle market in South Africa and said the business remains uniquely positioned for growth.
The charts below give an overview of WeBuyCars’ performance over the last five years.