WeBuyCars’ stock fell sharply on Tuesday, dropping about 14% on the JSE, after the used-vehicle retailer released a trading update showing that share dilution from its pre-listing capital raise had dragged down its per-share earnings.
Profit Up, But Earnings Per Share Lag
The company expects core headline earnings for the year ending 30 September 2025 to rise by up to 17%, reaching about R958 million.
However, core headline earnings per share (CHEPS) are forecast to grow by only 0.8% to 6%, or between 219.2 cents and 230.1 cents. The weaker growth per share reflects the impact of 83.1 million new shares issued during the company’s pre-listing capital raise between February and April 2024.
These new shares, approved ahead of WeBuyCars’ April 2024 JSE listing, effectively diluted the value of earnings per share even as profits grew.
Company Blames Share Dilution and Slower Sales
WeBuyCars said the dilution effect was the key factor behind the muted CHEPS growth, calling it an “unfavourable impact” of the capital raise.
The group also reported slower sales in the second half of FY2025, compared to the first half, suggesting a softer used-car market amid tight consumer budgets and rising living costs.
The company said it uses core headline earnings to measure underlying performance, excluding non-recurring or non-cash items that could distort results.
Full-Year Results Due in November
WeBuyCars’ audited financial results for the year ended 30 September 2025 are due on 17 November. Investors will be watching for any signs of a rebound in unit sales and margin recovery.
The sharp share price drop underscores market sensitivity to share dilution and earnings pressure, even when companies report headline profit growth.
