Post-IPO Performance Reviews
An Initial Public Offering (IPO) is when a private company offers its shares to the public for the first time, allowing investors to purchase ownership in the entity. IPOs can offer portfolio diversification, allowing investors to access new and emerging sectors. IPO investments often come with the potential for substantial returns.
In this article, we will take a look at two JSE-listed companies that have been trading for less than two years, along with their performance so far:
Recently, Transactional Capital unbundled WeBuyCars from its portfolio, which has a market share of between 10% - 12%. WeBuyCars commenced trading publicly on 2 April 2024, with an opening price of R18.75. The share price post-IPO has surged over 15% and is currently trading at R23.00. The interim report for the six months ending 31 March 2024 further supports upside movement.The company saw a significant increase in group revenue, reaching R11.4 billion, a 15.9% increase, compared to the same period last year. Core headline earnings per share stood at 119.9 cents, and the total dividend declared was R3.41 billion. WeBuyCars aims to grow further and double its market share by 2028, starting with a 23 000 monthly volume target.
Zeda provides short-, medium-, and long-term car rental and vehicle fleet leasing services. The company holds long-term licence agreements with leading car rental brands, Avis and Budget, allowing it to provide comprehensive mobility solutions to customers. Zeda’s listing was the result of Barloworld's unbundling strategy. For the year ending 30 September 2023, the company’s revenue increased 12%, reaching R9.145 million, while earnings per share (EPS) and headline earnings per share (HEPS) saw significant growth, rising 31% and 17% respectively. HEPS for the year stood at 381 cents, reflecting a strong financial performance and growth prospects for the company. The company is trading at R11.80, surging from a R9.23 low.
Initial Public Offerings present exciting opportunities. For investors, IPOs offer the chance to get in on the ground floor of a potentially promising company, often before it becomes widely known or valued. It's a chance to invest in the future and be part of a company's growth story from the beginning.
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