WeBuyCars Holdings expects core headline earnings for the half year to increase by as much as 29%, it said on Tuesday.
The company uses core headline earnings to measure and benchmark the underlying performance of the business, it said in a statement.
Core headline earnings represents headline earnings adjusted for certain non-recurring or non-cash items that the board believes may distort the financial results from period to period.
It expects to report core headline earnings of between R394m to R410m for the six months ended March from R318m a year ago, or 117.5c-122.3c per share from 95.1c before.
However, using the headline earnings per share measure, it expects to report a headline loss per share of 19.7c to 21.7c compared with HEPS of 20c a year ago.
The group said basic EPS and HEPS were impacted by noncore, one-off transaction costs and non-cash call option derivative accounting adjustments.
Ahead of its JSE listing, the company incurred one-off professional, legal and listing fees of R45m. As set out in the prelisting statement, dated March 12, the company held various call options which gave it the right to purchase the 25.1% shareholding in the company from I VDW Holdings, for which a call option derivative asset was raised in prior periods.
“Upon adoption of the new memorandum of incorporation (on March 25 2024) the shareholders’ agreement was cancelled which led to the cancellation of the call options. The call option derivative asset of R426.5m was consequently derecognised on March 25. This fair value loss on derecognition of the call option derivative is once-off in nature, noncore and has no cash flow impact,” it said.
The company’s share price reacted positively to the statement, adding 4.22% to R19.99.
The company said it experienced higher volumes, higher average selling prices, improved margins, and cost efficiencies as a result of economies of scale during the review period.
The group listed on April 11, with a sparkling debut on the JSE, reflecting the company’s growth trajectory from a local start-up to a major player in the used car market.
Shares in the company, which was spun out of Transaction Capital, opened at R20, eclipsing the initial public offering price of a R18.75 in what could be seen as indicative of investor confidence in the company, whose roots are firmly planted in the soil of entrepreneurial spirit.
Shares in WeBuyCars ended its debut session on April 11 at R20.40, giving it a market capitalisation of about R8.5bn. It closed on Monday at R19.18.
WeBuyCars’ journey began in the early 2000s when brothers Faan and Dirk van der Walt spotted a big problem in the used car market as individual consumers struggled to quickly sell older cars. Today it stands as a beacon of growth and innovation, having transitioned from a modest start-up to a publicly traded entity competing with established names like Bidvest, which runs McCarthy, and Motus, a colossus with a diverse brand portfolio and model range.
It has laid out an ambitious target of growing the number of vehicle sales by more than 60% over the next four to five years to 23,000 a month as it seeks expansion across the country with new warehouses and buying pods.
WeBuyCars made R20bn in annual sales in the year to end-September, with about R1.14bn of that flowing to the bottom line in the form of core profit, or earnings before interest, taxes, depreciation and amortisation (ebitda).
With Tiisetso Motsoeneng
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