WeBuyCars delivers double-digit growth despite tough trading conditions

Key topics:Double-digit earnings and revenue growthMajor expansion of supermarkets, pods, and capacityMargin pressure and dilution curb per-share gainsSign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.We Buy Cars Holdings Limited (“WeBuyCars” or “the group”), listed on the JSE under the share code WBC, reported audited consolidated annual financial statements for the year ended 30 September 2025, demonstrating sustained growth across key performance metrics, though the expansion was tempered by a challenging operating environment and the dilutive effect of recent capital raises.The audited results were authorised for issue by the Board of Directors on 14 November 2025 and published on 17 November 2025. The financial statements confirm that the group is viewed as a going concern, with adequate resources and sufficient borrowing facilities to meet foreseeable cash requirements.The Good: Financial and operational successWeBuyCars successfully navigated market complexity, continuing its long-term growth trajectory by delivering significant increases in core earnings, revenue, and cash generation.Financial performance highlights:Core headline earnings: The key non-IFRS performance metric, core headline earnings (*), grew by 15.0% to R937.6 million, up from R815.4 million in the prior year. This growth was primarily driven by higher sales volumes, increased average selling prices, a stronger net insurance result, lower finance costs, and improved cost efficiencies stemming from economies of scale.Revenue growth: Group revenue increased by 13.1%, reaching R26.4 billion (up from R23.3 billion in 2024).Operating profit: Operating profit rose by 9.7% to R1,340.5 million.Cash generation: Net cash generated from operating activities saw a strong increase of 14.5%, totalling R677.3 million. The group's balance sheet is described as conservatively geared, supported by high cash conversion rates.Dividends: The board approved a gross final cash ordinary dividend of 30 cents per ordinary share, representing a 20.0% increase from the 25 cents per share paid in the previous year.Volumes and market share: The number of vehicles bought increased by 7.7% to 180,576 units, while vehicles sold grew by 8.4% to 179,006 units. The group continues to gain market share, achieving an all-time monthly sales record of 16,294 units in November 2024.Operational expansion:WeBuyCars significantly expanded its physical footprint and capacity during the year.Footprint expansion: The group opened two new supermarkets in Rustenburg and Vereeniging. Upgrading existing facilities was also a strategic priority, with expansions completed at sites including George, Polokwane, and Germiston.Increased capacity: Total vehicle parking bays increased by 14.9% to 12,911. The number of Supermarkets grew from 16 to 18, a 12.5% increase. The planned openings of Montana (Pretoria North) and Lansdowne (Cape Town) supermarkets are expected to increase total capacity by more than 20%.Buying pods: The national footprint of buying pods, located at shopping malls, grew by 27.7%, increasing from 83 to 106 locations.Inventory quality: The inventory value per unit increased to R186,357 (from R169,941 in 2024), driven by vehicle price inflation and a strategic decision to acquire more low-mileage, financeable units.Digital platform: WeBuyCars continued to invest in and enhance its innovative digital business platform, which helps optimise pricing strategies and business processes. The company’s website averages 8.1 million monthly visits with 2.5 million unique visitors.The Bad: Market challenges and dilutionDespite strong top-line performance, the group faced significant headwinds that suppressed profitability ratios and constrained per-share growth.Market and margin pressures:The results were delivered in a challenging trading environment, especially during the second half of the year, characterised by low GDP growth, strained consumer affordability, reduced consumer confidence, and lower bank approval rates.The continued strength of the new vehicle market and the rapid penetration of competitively priced Chinese brands (such as GWM, Chery, Omoda, and Jaecoo) created structural shifts, resulting in margin pressure for WeBuyCars.To ensure healthy inventory turnover and maintain liquidity, the group proactively adjusted selling prices on vehicles competing within these affected price brackets, which placed "short-term pressure on margins" in the second half.The strategic response involved rebalancing lead prioritization towards more affordable, faster-moving inventory, although trading conditions remained tough through the winter months.Financial headwinds:Dilution impact: Core headline earnings per share (CHEPS) growth was significantly dampened, increasing only 3.3% to 224.6 cents (vs. 217.4 cents in 2024). This weak per-share growth was directly attributed to the 11.3% increase in the weighted average number of ordinary shares used in the calculation, resulting from new shares issued in February, March, and April 2024 as part of the pre-listing capital raise.Inventory days: The efficiency metric, inventory days, saw a slight increase from 29 days in 2024 to 31 days in 2025, reflecting a 6.9% change.Debt increase: Net interest-bearing liabilities (excluding IFRS 16) increased by 20.7% to R1,350.8 million, primarily consisting of property mortgage loans (R940.4 million) and working capital borrowings (R410.4 million) to fund expansion and inventory.The group anticipates that the buoyant new vehicle market and growing penetration of Asian brands will ultimately have a positive long-term impact by expanding the used-vehicle acquisition base and opportunity set in the future.

WeBuyCars delivers double-digit growth despite tough trading conditions

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