WeBuyCars' money engine

ROARING TRADE: USED-CAR GIANT MAINTAINS 5% PROFITABILITY

- 

Graphic: WeBuyCars data, Moneyweb calculations

(Moneyweb calculations)

The profit margin of the country’s largest buyer and seller of used vehicles, WeBuyCars, has remained remarkably stable over the last three years.

This, despite the growth in the number of vehicles it buys (and sells) per month - up from an average of around 10 000 per month in the first half of its 2022 financial year, to over 15 000 in the six months to end March.

Across this period, its average operating margin has remained above 5%.

Between October 2024 and March, this averaged 5.56% - up from 5.13% in the second half of the previous financial year.

In these six months, it reported revenue of R13.135 billion, with operating profit of R730.3 million.

It sold 91 392 vehicles in that time, making it easy to calculate the average selling price and average profit achieved per car: R143 721 and R7 990 respectively.

Because of differences in disclosures by then-Transaction Capital prior to its listing separately, limited historic operating profit data is available. To track this over time, core headline earnings has been used.

Here, the average per vehicle in these six months is R5 560 (after tax and finance costs). Seeing the averages over time (despite the profit being based on headline earnings) illustrates the trend.

Between the second half of FY22 and the first half of FY25, the average selling price has been almost exactly flat.

The operating margin of 5.6% means that on a R200 000 vehicle, WeBuyCars makes R11 200.