WeBuyCars Holdings - its share price has rocketed 93.1% since it listed 7 months ago - has ended its financial year on 30 September with core headline earnings up 23.4% to R815.4 million after strong growth in the number of vehicles it bought and sold.
The used-vehicle trading group, which listed on the JSE in April, bought 167 741 units through the year to September 30, while the number of units sold increased 16.4% to 165 185 units.
In fact, sold volumes reached a monthly record for WeBuyCars of 14 594 units in July. A final cash dividend of 25 cents a share was declared. The share price was trading 0.63% weaker at R39.40 yesterday afternoon, but the price was well up from the R20.40 that it listed at.
The group uses core headline earnings to benchmark the underlying performance. Core headline earnings represent headline earnings adjusted for non-recurring or non-cash items. Core headline earnings a share increased 9.9% over the prior year.
Revenue increased 16.5% to R23.32 billion. Group directors described the results as “exceptional” in an environment of low GDP growth, pressure on consumer affordability, high interest rates, and low levels of consumer confidence.
The key drivers of earnings growth were higher volumes, higher selling prices, efficiencies, higher inventory turns, and economies of scale.
Gross margins were maintained.
However, core headline earnings a share was unfavourably impacted by the February and March 2024 new share issues (83.186 million shares) implemented as part of the pre-unbundling steps and pre-listing capital raising initiatives.
Basic earnings a share and headline earnings a share were impacted by non-core, once-off transaction costs and non-cash call option accounting adjustments, as well as legal and JSE listing fees of R45m. A call option derivative asset of R426.5m as at September 30, 2023, was de-recognised on March 25, 2024.
The balance sheet remained conservatively geared. Net cash from operating activities was up 1.6% at R591.4m for the year. Interest-bearing liabilities and working capital borrowings of R404.3m were 8.5% down on the prior year.
The directors said WeBuyCars was well positioned to benefit from lower interest rates, higher levels of consumer confidence, an improvement in new vehicle sales volumes, and cost efficiencies driven by economies of scale.
In June, the East London supermarket was opened with a capacity to hold 300 vehicles for sale. The planning for the Lansdowne supermarket to hold about 1 150 vehicles was progressing and was scheduled for completion in October 2025.
In Pretoria, an agreement was reached to buy land in Montana to be developed during 2025 to accommodate about 1 000 vehicles.
In October 2024, a dealership in Vereeniging in Gauteng was acquired and WeBuyCars plans to start trading from it in May 2025.
These developments were funded through existing cash resources and debt.
The Rustenburg supermarket in the North West province was opened in October with a capacity to accommodate 300 vehicles for sale.
In September, a lease agreement was signed for a bigger, more prominent trading location in Pietermaritzburg. This new location has the capacity to accommodate about 350 vehicles.