WeBuyCars heading to the JSE

 ·13 Feb 2024

Transaction Capital intends to unbundle WeBuyCars and give it a separate listing on the JSE.

The group said that given SA Taxi’s disappointing performance in 2023 and the negative impact on the
whole of its operations, it has decided to unlock shareholder value from its existing portfolio of companies.

“WeBuyCars is uniquely positioned in South Africa’s second-hand vehicle market and has great potential for growth,” the group said.

“In FY 2023, the company met its key performance metrics, including an increase in sales volume and an increase in market share. Although earnings were down in the first half of the year, there was a strong recovery in the second half, and this positive momentum has continued into the 2024 financial year
despite market challenges.”

“WeBuyCars stands out from other players in the local motor industry because of its proprietary artificial intelligence, data and analytics capabilities, optimising the vehicle buying and selling process, and a prominent national footprint with 15 vehicle supermarkets augmented by 74 buying pods.”

Operations and finances

WeBuyCars saw core earnings grow 20% in the first four months of the 2024 financial year compared to the same period in FY2023.

Revenue also continues to grow (R6.5 million in FY23 to R7.6 billion in FY24) in line with the growth in the number of vehicles sold as the existing branch of the network matures, with the group expanding its market share.

“The WeBuyCars’ balance sheet is conservatively geared, supported by high cash conversion rates. Net debt of R1,034 million consists primarily of mortgage loans (R734 million) on several vehicle supermarkets and working capital facilities (R300 million) to fund inventory.”

During the first four months of FY2024, the group bought 53,855 vehicles and sold 53,144 vehicles, up 11% and 13%, respectively. The group also sold a record-high 14,000 vehicles in January 2024.

Although the group added nearly 2,000 additional parking bays to its national footprint, it has only opened one new branch over the last nine months due to its focus on leveraging existing strategic infrastructure investments.

The physical footprint will, however, be expanded further in 2024 and 2025 to meet the business’ growth aspirations.

The challenging macroeconomic environment marked by high unemployment and high interest rates is also driving demand for more affordable used vehicles.

New vehicle prices are also increasing due to inflationary pressures and a depreciating rand, boosting demand in the pre-owned vehicle market.

Some of the group’s key financial metrics can be found below:

Read: The real cost of owning a standard R350,000 car in South Africa

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