WeBuyCars’ big plans for Cape Town and East London – and how many cars it plans to sell
WeBuyCars announced it has signed lease agreements in prime locations in East London, Cape Town, and North West—with one opening for business as soon as next month—as it strives to double its market share in South Africa.
This was revealed in WeBuyCars’ interim results for the six months ended 31 March 2024, noting a pleasing performance in a tough trading environment, characterised by higher interest rates, fuel costs, inflation and lower levels of consumer confidence.
WeBuyCars was separately listed on the JSE on 11 April 2024, following Transaction Capital Limited’s unbundling of all its shares in WeBuyCars.
This marked the commencement of a new chapter for WeBuyCars.
“Long-term earnings growth trajectory for the six months ended 31 March 2024, with core headline earnings at R402 million growing 26.6% compared to the prior comparable six-month period.
“The key drivers of this growth in core earnings were higher volumes, higher average selling prices, improved margins, operational efficiencies, higher inventory turns and cost efficiencies driven by economies of scale,” it said.
Group revenue at R11.4 billion increased by 15.9% compared to the prior comparative period. Buying and selling volumes at 81,785 and 80,538 units were up 13.7% and 13.4%, respectively.
However, the company posted a R69.5 million loss for the period due to once-off fees associated with listing on the JSE and losses on call options.
Despite this, WeBuyCars has aggressively grown its headcount and its physical footprint over the past three years.
In 2021, WeBuyCars was selling approximately 7,000 vehicles a month, and this has now grown to over 14,000 vehicles a month.
Additionally, the WeBuyCars website is averaging 6.4 million monthly visits with 2 million unique visitors.
Considering this, WeBuyCars plans to continue on this growth journey. “Our ambition is to grow our monthly volumes to 23,000 per month and double our market share by 2028,” it said.
In this regard, WeBuyCars reported that:
- In April 2024, it signed a lease agreement to secure a prime location in East London, Eastern Cape. This site will allow us to display approximately 300 vehicles for sale. We anticipate trading from this location during June 2024.
- It has also recently signed property sale agreements to purchase land for future development in Lansdowne, Cape Town, in the Western Cape, and Rustenburg, in the North West.
WeBuyCars added that it was able to fund all of these initiatives from available banking facilities.
WeBuyCars highlighted that it anticipates difficult market conditions to continue in South Africa, with lower levels of consumer confidence, higher interest rates, and lower new vehicle sales volumes, to continue.
“This, coupled with political uncertainty in the run-up to the 29 May 2024 General Elections, may impact the vehicle market during the next six months,” it said.
However, WeBuyCars believe that its business model is robust and should enable it to overcome most of these vagaries.
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