WeBuyCars is the star performer in Transaction Capital’s stable, with strong vehicle sales, revenue, and earnings growth.
Transaction Capital’s results for the year ended 30 September 2022 revealed strong growth in core earnings, in line with historical growth rates.
Core earnings from continuing operations increased 24% from R1.005 billion to R1.246 billion. Core earnings per share increased 17% from 150 cents to 173 cents.
Transaction Capital CEO David Hurwitz said they are pleased with their strong operational performance and good financial results.
“Transaction Capital has a long-term, consistent track record of growth, with this year’s earnings growing in line with our compound annual growth rates since listing,” he said.
“This track record has generated shareholder returns of 28% over a 10-year period, on a compound per annum basis.”
WeBuyCars contributed a large part of Transaction Capital’s earnings thanks to a big increase in vehicle sales.
Over the last year, WeBuyCars’ revenue increased 66% from R10.723 billion to R17.848 billion.
The higher revenue was a result of selling more cars at a higher average price.
Over the last financial year, WeBuyCars sold 10,484 vehicles per month, up from 7,356 per month the year before. It sold 125,812 cars in the 2022 financial year, up from 88,271 in 2021.
E-commerce sales volumes increased 27% from 26,810 cars to 34,300 cars year-on-year.
The strong sales growth helped WeBuyCars to increase core earnings from R541 million to R762 million.
Hurwitz said over the medium term, he anticipated future earnings from WeBuyCars to continue to grow at rates higher than Transaction Capital’s historical earnings growth rates.
With this growth in mind, Transaction Capital is negotiating with the founders of WeBuyCars to increase its shareholding by a further 15%.
It means Transaction Capital will increase its stake in WeBuyCars from 74.2% to 89.1%. The founders – Faan and Dirk van der Walt – will remain invested and actively involved.
“This would be an accretive and low-risk deployment of capital, as WeBuyCars is well known to Transaction Capital as a high-quality growth business,” said Hurwitz.