WeBuyCars Shares Tumble 13% Following Earnings Warning Linked To Share Dilution

WeBuyCars’ stock price took a sharp knock on Tuesday, plummeting by 13.5% to close at R46.73 after the used-car retailer cautioned that its recent share issuance would dent full-year earnings.

The company revealed that 83 million new shares were issued between February and April 2024 to raise capital for its JSE Main Board listing on 11 April 2024. However, this move has led to a dilution effect that will negatively impact earnings for the year ending September 2024.

WeBuyCars also noted that its debut on the Johannesburg Stock Exchange came with once-off costs of R45 million, covering professional, legal, and JSE listing fees.

Strong Earnings Growth Despite Dilution

Despite the dilution pressure, WeBuyCars remains upbeat about its overall performance. The company anticipates a surge in basic earnings, with figures expected to reach between R926.8 million and R944 million — more than double the R343.1 million reported in 2024.

Similarly, headline earnings are projected between R929 million and R946.2 million, more than twice the R343.9 million recorded the previous year.

YOU MAY ALSO LIKE: Ramaphosa Strengthens South Africa–Malaysia Ties To Boost Trade And Investment

WeBuyCars’ core headline earnings, which exclude non-core items, are forecast between R917.2 million and R958 million, marking a 12% to 17% increase from the prior year.

Meanwhile, core headline earnings per share are expected to inch up to between 219.2 and 230.1 cents, compared with 217.4 cents previously.

The company added that its full-year results will be released at a later date, offering deeper insight into its operational strategy and the key factors influencing this performance.

---

For More, Follow SurgeZirc SA On  Facebook, X,  Instagram and Bluesky