Transaction Capital’s multibillion-rand investment over the past two years in WeBuyCars has paid off, with the company now looking to increase its stake to 90%.
The group’s full-year results, released on Tuesday, show that WeBuyCars’ core earnings grew 41% to R762-million in the period under review, with WeBuyCars now Transaction Capital’s largest business, generating about 43% of core earnings attributable to the group.
Transaction Capital CEO David Hurwitz said over the medium term, the company anticipates future earnings from WeBuyCars to continue to grow at rates higher than Transaction Capital’s historical earnings growth rates.
“As majority shareholders, working alongside the founders and management team of WeBuyCars, we will seek to maximise growth potential and market share gains through our physical and e-commerce platforms by driving a differentiated customer experience enhanced by data, technology and analytical advantages,” Hurwitz said.
“WeBuyCars’ expansion into Morocco in FY2022 [financial year] has been the first step towards our international expansion aspirations. The business has achieved profitability and continues to grow organically. WeBuyCars will explore further organic and acquisitive expansion opportunities in select markets.”
Transaction Capital first invested in WeBuyCars in 2020, snapping up a 49.9% stake in the business for R1.8-billion.
This after the Competition Commission earlier in 2022 scuppered Naspers’s deal to buy WeBuyCars over fears that it could have led to a substantial reduction in competition in the car-buying market.
The company then took control of the biggest second-hand car platform in the country in 2021, increasing its stake to 74.9% with the remaining 25.1% retained by its founders, Dirk and Faan van der Walt.
In its results presentation, the group said it was on course to increase its stake in WeBuyCars by a further 15%.
The group’s other divisions also recorded solid performance in the year to September. Nutun saw core earnings from continuing operations attributable to the group growing by 28% to R409-million, while SA Taxi Finance grew gross loans and advances 9% to R15.4-billion, with loans originated growing by 7% year on year.
Hurwitz said due to pressure on loan instalment and insurance premium affordability in the current environment, preserving credit quality is a priority. SA Taxi is targeting higher quality and experienced minibus taxi operators, resulting in lower loan approvals and lower net interest margins.
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