WeBuyCars Holdings, which was listed on the JSE on April 11, has reported a 26% rise in core headline earnings for the first half, despite a tough trading environment characterised by high interest rates and fuel costs.
Core HEPS rose 26.1% to 119.9c, the company said in a statement on Monday. Core headline earnings, at R402m, were up 26.6%, while revenue increased 15.9% to R11.4bn.
The company uses core headline earnings to measure and benchmark the underlying performance of the business. This measure 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.
The group attributed the performance to higher volumes, higher average selling prices, improved margins, operational efficiencies, higher inventory turns and cost efficiencies driven by economies of scale.
“WeBuyCars’ agile business model and quick inventory turnover enabled it to respond to the market changes quickly by re- aligning inventory profiles to lower-priced vehicles, to match consumer demand,” it said in a statement on Monday.
It reported a headline loss per share of 20.7c from HEPS of 20c a year ago.
Buying and selling volumes at 81,785 and 80,538 increased 13.7% and 13.4%, respectively. The number of vehicles bought and sold continued to grow, with sales volumes reaching a monthly record for WeBuyCars of 14,285 in March.
The group expects the difficult market conditions in SA, with lower levels of consumer confidence, higher interest rates and lower levels of new vehicle sales volumes, to continue.
“This, coupled with political uncertainty in the run up to the general elections may impact the vehicle market during the next six months, however we believe that our business model is robust and should be able to overcome most of these vagaries,” it said.
The group has aggressively grown its headcount and its physical footprint over the past three years. In 2021 WeBuyCars was selling about 7,000 vehicles a month and this has grown to 14,000 vehicles a month.
“We plan to continue on this growth journey. Our ambition is to grow our monthly volumes to 23,000 and double our market share by 2028.”
In recent developments in pursuit of this strategy it has signed a lease agreement to secure a prime location in East London in the Eastern Cape.
The site will allow the company to display about 300 vehicles for sale and it anticipates trading from this location from June.
It has also signed property sale agreements to purchase land in Lansdowne in Cape Town and in Rustenburg in the North West, for future development.
It would be able to fund all of these initiatives from available banking facilities, it said.
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