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WeBuyCars sales hit new record despite posting interim loss

WeBuyCars sales hit new record despite posting interim loss
Illustrative images | Faan (left) and Dirk van Der Walt (We Buy Cars CEOs) | WeBuyCars in Richmond Park, Cape Town. (Photos: Gallo Images / Fani Mahuntsi | Gallo Images / Misha Jordaan)

The second-hand car giant says the loss is one-off and that it looks forward to aggressive expansion.

A month after it became the JSE’s newest listing, WeBuyCars (WBC) posted an interim loss of almost R70-million – R45-million of which was incurred due to one-off legal, professional and JSE listing fees.

The second-hand car giant also attributes its loss to the cancellation of various call options totalling R426-million, but says these are also one-off and have no impact on its cash flow. 

On Monday, the group reported that revenue was up 16% (to R11.4-billion) and core headline earnings were up 26.6% (R402-million) in the six months to 31 March. Operating profit was up 23.7%. 

It reduced its debt levels by 19.5% to R1.2-billion and achieved record adjusted Ebitda (R665-million, a 21% increase), core operating profit and core headline earnings in the six months.

The group bought 81,785 vehicles over the period (a 13.7% increase) and sold 80,538, which is a 13.4% increase. It achieved higher average selling prices and turned more of its inventory.

Ambitions

Willem Klopper, WBC’s chief strategy officer, said that while there are uncertainties around the upcoming general elections which might affect customer decision-making around large acquisitions – coupled with continuous high interest rates and already low consumer confidence – trading conditions going into winter could prove challenging.  

“We want to continue with our ambition to grow market volumes and market share and expand. The team has proven that it can deliver on strong growth and we will endeavour to continue on this growth path.”

WBC has already identified three new strategic sites – in East London’s Hemingways Mall which will open by the end of June 2024; in Rustenberg, when they have secured land; and in Cape Town’s southern suburbs. 

“We’ve opened up new buying pods in Upington and Heidelberg, and we plan to add pods in Newcastle, Rustenburg, Hermanus, Jeffreys Bay and Uitenhage by the end of the financial year.”

CEO Faan van der Walt said they strategically target areas of high demand and “fish where the fish are”. 

“After 23 years of consistent growth, our network now stretches extensively across Africa. Our key strengths and competitive edges lie in our nationwide buying network, further reinforced by a comprehensive network of buying pods and physical supermarkets facilitating buying and selling transactions. 

“Currently, our operations involve the acquisition and sale of approximately 14,000 vehicles per month, supported by a workforce of nearly 3,000 employees.” 

It was a difficult trading environment, marked by 0.5% higher interest rates, fuel costs, inflation and lower consumer confidence, but Van der Walt says the vehicle pool is on a trajectory of expansion while annual new vehicle registrations are in decline, which indicates a growing used vehicle market in South Africa. 

He described the maiden set of results as “pleasing”, underpinned by volume growth, internal efficiencies, economies of scale and a strong operational performance.

WBC was separately listed on the JSE on 11 April 2024, after its unbundling from Transaction Capital. DM

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