WeBuyCars expects to report higher annual core headline earnings, it said on Tuesday.
However, headline earnings are expected to decline as much as much as 60% due to one-off costs, including those associated with its listing, it said in a trading statement on Tuesday.
The company uses core headline earnings to measure and benchmark the underlying performance of the business. Core headline earnings represent 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 expects core headline earnings for the year ended September to be 21%-26% higher at R798m-R832m. Core headline earnings per share (core HEPS) are expected at 212.5c-222.4c, which is 7%-12% higher.
Headline earnings are expected to be 55%-60% lower at R324m-R364m, while HEPS are expected to be 85.6c-97.8c, a decrease of 60%-65%.
HEPS were affected by certain noncore, one-off transaction costs and non-cash call option derivative accounting adjustments.
Before the company’s listing on the JSE in April, WeBuyCars incurred one-off professional, legal and JSE listing fees of R45m.
In addition, as set out in the WeBuyCars prelisting statement, the group held various call options which gave it the right to purchase the 25.1% shareholding in the group from I VDW Holdings, for which a call option derivative asset was raised in prior periods.
The shareholders’ agreement has since been cancelled, which led to the cancellation of the call options. The call option derivative asset of R426.5m as of end-September 2023 was consequently derecognised on March 25 2024. This fair value loss on derecognition of the call option derivative was one-off in nature, noncore and had no effect on cash flow, it said.
The company expects to release its full-year results on November 18.
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