| Thu 17 May 2001, 0:00 | | AVIS SOUTHERN AFRICA LIMITED |
|
SCANDINAVIAN OPERATIONS CONTRIBUTE 20% OF TOTAL OPERATIONAL INCOME AS AVIS
REVENUE TOPS A BILLION RAND
AVIS SOUTHERN AFRICA LIMITED
Johannesburg, 17 May - Avis Southern Africa's revenue topped the billion-
rand mark in the year to March 2001 with its Scandinavian acquisitions
performing in line with expectations and contributing almost 20% of Total
Operational Income.
Revenue rose 40% to over R1.2 billion and Operational Income was up 33% at
R202 million but Group profits were affected by an increased tax rate and,
in line with expectations headline earnings per share reduced 7% to 68.1
cents. A final cash dividend of 13 cents per share was declared for a
total of 19 cents for the year (2000: 18 cents).
Chief executive Grenville Wilson said today the year had been notable
chiefly for the Group's successful internationalisation through the
acquisition of the Avis operations in Norway and Sweden, followed by its
refocusing on its car rental and fleet management businesses through the
sale of its stake in RCI and non-core activities. These disposals had also
strengthened its balance sheet.
"Operationally, all our divisions did very well in the past year, making
significant gains in such key areas as market share, productivity and
utilisation. However, with lower than anticipated growth in both the South
African economy and in inbound tourism to the region, competition in the
local car rental market intensified to price-war levels. Already thin
margins were squeezed further, and this was aggravated by inflationary
pressures, notably coming from high increases in new vehicle prices, which
constitute a major part of our input costs," Wilson said.
Wilson noted that in the face of fierce competition, Avis Rent-A-Car
Southern Africa had maintained its market share of more than 40%. It had
increased rental day volume by 11.5% to 2.4 million and rental transactions
by 12.5% to 490 000. Fleet utilisation - the industry's main efficiency
benchmark - had continued to improve to 73.5% for the year. Avis Rent-A-
Car Sweden had increased its rental days by 20% while Avis Rent-A-Car
Norway, the market leader in that country, had maintained volumes. Total
rental days for the Nordic region were 865 000 from 215 000 transactions.
Avis Fleet Services in Southern Africa also did well on the back of a
buoyant used car market and its conservative depreciation policy.
In the course of the year the Group established a new division, Avis
Enterprises, designed to extract additional profits from its existing
revenue streams and customer bases. It has acquired interests in two
membership loyalty programme businesses, Cendant Membership Services SA and
MEM, and in Businessure, a specialist service provider.
"All our operations are budgeting for earnings increases in the year ahead.
Provided that the economies in which these businesses operate meet general
expectations and that reasonable rate improvements can be achieved in the
South African car rental market, the Group as a whole should return to real
earnings growth in the year to March 2002," Wilson said.
"Avis is well placed to sustain future growth in its key business areas and
the focus in the year ahead will be on the exploitation of opportunities in
these businesses both locally and internationally. In addition to pursuing
operational growth, we shall also be seeking to maximise the attractive cost
sharing possibilities which exist between the headquarters and back office
overheads of our businesses in Southern Africa and Scandinavia."
Issued by du Plessis Associates on behalf of Avis Southern Africa, Limited.
dPA contact - Kathy du Plessis on Tel : (011) 728 4701,
Fax : (011) 728 2547/8 or e-mail : avis@dpapr.com
AUDITED RESULTS 2001
AVIS SOUTHERN AFRICA LIMITED
* Scandinavian acquisitions meet expectations
* Net asset value increased by 62%
* Headline EPS in line with expectations
* Dividend increased by 6%
CONSOLIDATED INCOME STATEMENT
R000 Year ended % Year ended
31/3/2001 Change 31/3/2000
Revenue 1 237 730 40% 884 183
Operational income (after
charging) 202 175 33% 151 741
Depreciation - fixed
assets 122 634 106 718
Depreciation - current
assets 177 873 97 757
Operating lease charges 68 713 50 107
Variable full maintenance
leasing income 66 339 67 156
Total operational income 268 514 218 897
Net finance costs (96 426) (49 441)
Net income before taxation 172 088 2% 169 456
Amortisation of goodwill and
trademarks (33 056) (7 036)
Exceptional item 240 817 2 785
Taxation (43 074) (35 818)
Net income after taxation 336 775 129 387
Outside shareholders'
interest (10 782) (8 120)
Net income attributable to
ordinary shareholders 325 993 121 267
Fully diluted earnings per
share (cents) 183.5 74.6
Headline earnings per share
(cents) 68.1 -7% 73.3
Dividends per share (cents) 19.0 6% 18.0
Interest cover (times) 2.8 4.4
Headline earnings per share
The calculation of earnings
per share is based on the
consolidated net income
attributable to ordinary
shareholders and a weighted
average number of shares
(000)in issue of 171 282 171 282
CONSOLIDATED BALANCE SHEET
R000 At At
31/3/2001 31/3/2000
Employment of capital
Intellectual property 258 758 64 463
Vehicles for lease 467 856 418 406
Other fixed assets 63 012 69 147
Other investments and loans 17 940 18 250
Vehicles for rent 1 093 498 534 556
Other current assets 292 731 182 529
Total assets 2 193 795 1 287 351
Interest bearing liabilities 948 031 403 845
- Rand monetary area 524 658 396 537
- Foreign 423 373 7 308
Non-interest bearing
liabilities 444 076 380 814
Total liabilities 1 392 107 784 659
801 688 502 692
Capital employed
Shareholders' interest 792 732 490 096
Outside shareholders'
interest 8 956 12 596
801 688 502 692
Number of shares in issue
(000) 171 282 171 282
Net asset value per share
(cents) 463 286
Tangible net asset value
per share (cents) 312 248
Gearing ratio 1.2 0.8
CONSOLIDATED CASH FLOW INFORMATION
R000 Year ended Year ended
31/3/2001 31/3/2000
Cash flow from operating
activities 252 059 256 065
Change in working capital (341 670) (78 518)
Taxation paid (38 665) (35 188)
Net cash flow
- from investing activities (225 345) (167 023)
- from financing activities 372 188 (13 370)
Movement in cash and cash
equivalents 18 567 (38 034)
Cash and cash equivalents
- at beginning of period 30 638 68 672
- at end of period 49 205 30 638
COMMENTS
The highlights of the year were the acquisition and successful incorporation
of Avis Norway and Sweden, and the subsequent refocusing of the Group on its
principal businesses through the disposal of its interest in RCI and non-
core activities.
Shareholders were cautioned at the interim stage that earnings would not
exceed those of 2000 and a higher tax rate ultimately resulted in a 7%
decline in headline earnings per share.
Review of operations
Avis Rent-A-Car Southern Africa maintained its market share of more than 40%
in the face of strong competition and increased its rental day volume - the
principal measure of growth in this industry - by 11.5% to
2.4 million. Rental transactions increased by 12.5% to some 490 000. Fleet
utilisation continued to improve to 73.5% for the year. Price competition
was intense and together with cost pressures, mainly resulting from new car
prices, margins were reduced.
Avis Fleet Services achieved sound profitability, assisted by the buoyant
used car market and a conservative depreciation policy. Vehicles under
management now exceed 31 000.
Avis Rent-A-Car Norway and Sweden both met expectations. Sweden increased
its rental days by 20% while the Norwegian operation, the market leader in
that country, maintained its volumes. Total rental days for the region were
865 000 from 215 000 rental transactions. During the past year, synergy
benefits and value-adding opportunities have been identified and these are
now being exploited.
Avis Enterprises has been established to extract additional profits from the
Group's existing customer bases and revenue streams. It has acquired
interests in the loyalty programme businesses Cendant Membership Services
(SA) and MEM as well as in Businessure, a specialist service provider.
Financial review
The substantial increase in revenue and operating income is primarily
attributable to the contribution of the Scandinavian operations. The
increased interest bearing debt also resulted from the acquisition of the
Norwegian and Swedish businesses, as well as the increased fleet held for
the Southern African summer season. The exceptional profits from the
disposal of RCI and non-core operations has significantly strengthened the
Group and enabled the Group's gearing ratio to remain at a conservative
level.
Dividend
A final cash dividend of 13c per share (total 19c for the year) has been
declared payable on 22 June 2001 to shareholders registered on 1 June 2001.
Prospects
All operations are well structured with clear practical plans to expand
their businesses. The flow of inbound tourism to Southern Africa is
expected to improve in the year ahead and it is also anticipated that car
rental pricing levels in the South African market will become more rational.
Moderate economic growth is forecast in both regions where the Group
operates. The Group's budgets reflect that Avis should return to real
earnings growth in the year to March 2002.
For and on behalf of the board
Glenn van Heerden Grenville Wilson
Chairman Chief executive
Kempton Park
17 May 2001
Avis Southern Africa Limited and its subsidiaries
(Incorporated in the Republic of South Africa)
Reg.No. 1967/010320/06
Registered Office
2A Sysie Road, Croydon, Kempton Park
PO Box 221, Isando, 1600, South Africa
Tel : +27 (11) 923-3770 , Fax : +27(11) 923-3772
www.avis.co.za
Investor Relations
To obtain additional information about the Group or to be placed on the
distribution list for Group announcements, please contact : Avis Investor
Relations,
PO Box 87386, Houghton, 2041, Tel: +27(11) 728-4701, Fax: +27(11) 728-2547,
avis@dpapr.com
Directors
G van Heerden* - Chairman, GJ Wilson - CEO, TRT Bohlmann*, GD Cilliers, HR
Cloete*, BP Diamond*, JW Dreyer*, GP Harris, HM Khoza*, AR Langham, G
Naidoo, NS Nematswerani*, P O'Brien, PJJ van der Walt*
*non-executive
We try harder.
For further information call Grenville Wilson on
(011) 923 3768 or cell 082 881 0025
