WeBuyCars Results

This is a Power 98.7 Podcast. Now, we're talking. Subscribe to Power 98.7 Podcasts in iTunes or wherever you get your podcasts. There's more on power987.co.zade.

those who missed the disclaimer early on in the show I did mention in the first hour that I was feeling a bit under the weather over the weekend but I am feeling much better so my voice sounds worse than I feel so don't worry about that in good health just unfortunately still sounding a bit nasal but we move on now to the conversation we by cars released its financial results for the year ended City September

showcasing impressive growth amid a challenging economic environment. Now, the company saw a 16.5% increase in group revenue to 23.3 billion rand and a 23.4% rise in core headline earnings. Now, Willem Glopper, chief strategy officer, we buy cars joins us on the line to unpack the latest set of numbers. Willem, a very good evening and a welcome to power business.

Good evening. Thank you for the opportunity. Good evening to all your listeners. Fantastic. And now, Willem, as mentioned, despite the challenging economic environment, revenue increased by 16.5%, what were the main factors driving this growth? I think it's very pleasing that we were able to

growth in most of our metrics. Revenue is obviously driven by an increase in volumes, so it is very encouraging to see that we are able to still gain additional markets, shame and more for Africans trust us in providing our service to them. That has been the main driver for the growth in revenue.

And the gravity in core headline earnings is really, in addition to that, strong revenue growth, but also very effective cost control measures that we really try and control our income statement that there's a real team effort across the board to the level of these piecing results.

Yeah. And there were also some operational highlights. We by cars achieved an all-time monthly sales record in July this year. What enabled this milestone and how sustainable is this growth? Yes, I think it's again, created to our collective team. It sort of shows that the amount of staff we have is able to handle that amount of scale.

And it also sort of goes well for future growth and we early into our new financial year and it's also leading to see that there is still an additional demand for our services.

So yes, very pleasing that we were able to do those kind of volumes, which is typically are sort of slower or lower volume months. We're usually as spring into South Africa in September, October, November. That's usually where we see our strongest sales month.

And now, Willem, I wanted to know from you, you know, what are some of the key areas where cost savings were achieved? And how did you balance cost control with maintaining quality and customer satisfaction? Thank you. A great question. I think it sort of speaks to a few line items in our income statement. But really, as we like all this growing and growing its footprint, we've also now seen the benefits of economies of scale.

So in the finances, we tried to get to positive jobs and selling a lot of vehicles and increasing volume. So it really helps with those unit economics. But being cognizant of careful and well-planned marketing expenses, computer expenses helps to achieve that. And then also our

Our infrastructure costs, our property costs, I think, is market leading. The amount we spend on rent and electricity is carefully considered on a monthly basis. So all those three, I guess, and also trying to sell more vehicles with the same number of heads.

And all those play into that sort of cost saving from a unit perspective. And Willem, I wanted to know from you, you know, we by cars has been expanding its national footprint, opening new vehicle supermarkets in East London and Rustinburg with more planned in Pretoria and Cape Town. How does this expansion fit into your broader growth strategy? And what other regions are you targeting for future expansion?

So as a management team, I've got a big ambition to sell 23,000 vehicles per month by 2028. So growing our physical footprint is key to that. The areas that you've just mentioned are spot-on. Growing in Cape Town with a new land-down development that we wish to open before the end of 2025, we'll add a number of displays for us.

The Victoria North area where we've shared with the market that we want to develop a new supermarket in Montana. We've also acquired a very exciting new supermarket and old dealership that we wish to open in May in Vietnam.

So those are sort of three key areas we've tried to also use our existing showrooms to increase footprint to add sales days there. And then there's also one or two spots that we're missing on the South African map. We'd love to also trade in the free state if we are able to find an adequate location. So those are key sort of growth areas that we are targeting as a management team currently.

Speaking of the outlook, the company aims to double market share by 2028. What are the key strategies and investments that will help achieve this ambitious target? The strategy is quite simple. We try and stick to our knitting. We want to do exactly what we're doing, slightly better on all fronts. There are a few opportunities like the commercial vehicles that we mentioned that could be exciting.

And the real investment is a little bit in our online presence. We've really become a key destination for shoppers looking to start their research on acquiring vehicles.

So we would definitely want to increase our physical and electronic footprint or online footprint. And those opportunities that I just mentioned, the Montano's, Landdowns for Inacin, those sites, our key CapEx experiences for us and part of the strategy to get to that 23,000 vehicles per month.

Yeah. And, Willem, just looking ahead, what are some of the key priorities for we buy cars in the 2025 financial year and what should investors and customers expect from the company in the coming months? Well, Steve, I don't want to try and sound boring, but they should expect exactly what we're currently doing. We always on a mission to make small improvements across all our processes.

We definitely want to improve our loan application process for clients wishing to acquire vehicles with the assistance of bank finance. We want to have more accurate evaluation data. So when we evaluate vehicles from consumers, be more accurate so that we can get the right prices and have fair deals both on the buying and selling side, which

will hopefully improve the experience for the consumer and from an invasive perspective. Hopefully that builds well for minimizing losses and making sure we get the right price for a vehicle as soon as possible so we can still maintain healthy stock terms and return healthy cash to our investors.

And speaking of looking ahead and the future, we by cars sort of seeing that the Chinese cars might dominate vehicle sales in the future. Talk to us about that. Yes, we were definitely seeing that trend. We're also acquiring many of those vehicles. What we try and do is really make sure we get the right data on these vehicles.

Those Chinese cars as they will age over the next few years will collect more data on them and see how they hold their used car value. It's been promising signs and unfortunately a lot of the European brands have really felt the most pain in new car sales because of these

more affordable Chinese entrance to our market. What we would see is obviously we would see how these vehicles, how long they take to sell, what kind of profit they deliver and we would have to adjust our buying strategy accordingly. So the short answer is we're going to have to wait and see and learn quickly and learn better than our competitors with our data and our pricing algorithms to make sure we make them right buying decisions when acquiring those assets.

Alright, on that note, we'll leave it there. Thank you so much for your time this evening, Willem.

Thank you and I hope you feel better and thank you for your listening. Thank you so much. All right, that was Willem Glopper, Chief Strategy Officer at We Buy Cars, taking us through their financial results for the year ended 30th of September. You've been listening to a Power 98.7 podcast. For more podcasts, visit power987.co.za or subscribe wherever you get your podcasts.