| Thu 1 Nov 2001, 0:00 | | Avis Southern Africa Limited - Interim Report To 3 |
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Avis Southern Africa Limited and its subsidiaries
(Incorporated in the Republic of South Africa)
Reg. No: 1967/010320/06
ISIN No: ZAE 000013371
Share Code: AVS
* Headline EPS up 7% in challenging market
* Strong volume growth in car rental operations
* Increased interim dividend declared
CONSOLIDATED INCOME STATEMENT
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
to % to ended
R000 30/9/2001 Change 30/9/2000 31/3/2001
Revenue -
continuing
operations 565 544 12% 503 416 1 061 082
Revenue - disposed
of operations - 77 163 176 648
Revenue 565 544 580 579 1 237 730
Operating income
- continuing
operations 84 571 19% 70 781 168 617
Operating income
- disposed of
operations - 18 250 33 558
Operating income
(after charging) 84 571 89 031 202 175
Depreciation
- fixed assets 64 022 60 665 122 634
Depreciation
- current assets 90 127 82 792 177 873
Operating lease
charges 29 235 38 996 68 713
Interest received
(FML) 34 460 31 967 66 339
Net finance costs (41 648) (40 761) (96 426)
Net income before
tax 77 383 80 237 172 088
Amortisation of
intellectual
property (12 985) (14 281) (33 056)
Exceptional item - - 240 817
Taxation (19 886) (21 278) (43 074)
Net income
after tax 44 512 44 678 336 775
Outside shareholders'
interest (190) (5 526) (10 782)
Net income
attributable to
ordinary
shareholders 44 322 39 152 325 993
Fully diluted
earnings per
share (cents) 26.7 22.9 183.5
Headline earnings
per share (cents) 33.5 7% 31.2 68.1
Dividends per share
(cents) 6.5 6.0 19.0
Interest cover
(times) 2.9 3.0 2.8
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 171 282 171 282 171 282
CONSOLIDATED BALANCE SHEET
(Unaudited) (Unaudited) (Audited)
R000 At 30/9/2001 At 30/9/2000 At 31/3/2001
Employment of capital
Intellectual
property 248 150 302 614 258 758
Vehicles for
lease 477 838 432 270 467 856
Other fixed assets 84 663 81 982 63 012
Other investments
and loans 24 229 14 228 17 940
Vehicles for rent 1 278 897 1 037 362 1 093 498
Other current
assets 318 979 274 997 292 731
Total assets 2 432 756 2 143 453 2 193 795
Interest bearing
liabilities 1 044 732 1 017 754 948 031
- Rand Monetary
Area 511 506 631 162 524 658
- Foreign 533 226 386 592 423 373
Non-interest
bearing
liabilities 556 011 573 446 444 076
Total liabilities 1 600 743 1 591 200 1 392 107
832 013 552 253 801 688
Capital employed
Shareholders'
interest 821 048 532 176 792 732
Outside shareholders'
interest 10 965 20 077 8 956
832 013 552 253 801 688
Number of shares
in issue (000) 171 282 171 282 171 282
Net asset value per
share (cents) 479 311 463
Tangible net asset
value per share
(cents) 334 134 312
Gearing ratio 1.3 1.8 1.2
STATEMENT OF CHANGES IN EQUITY
(Unaudited) (Unaudited) (Audited)
R000 30/9/2001 30/9/2000 31/3/2001
Balance at
beginning of
period 792 732 490 096 490 096
Currency
translation
differences (4 873) 13 205 9 223
Subsidiaries sold - - (36)
Net income
attributable
to ordinary
shareholders 44 322 39 152 325 993
Dividend
Declared (11 133) (10 277) (32 544)
Balance at
end of
period 821 048 532 176 792 732
CONSOLIDATED CASH FLOW INFORMATION
(Unaudited) (Unaudited) (Audited)
R000 30/9/2001 30/9/2000 31/3/2001
Cash flow from
operating
activities 118 469 106 389 252 059
Change in working
capital (94 253) (122 599) (341 670)
Taxation paid (21 128) (2 616) (38 665)
Net cash flow
- from investing
activities (101 871) (442 975) (225 345)
- from financing
activities 62 229 516 606 372 188
Movement in cash
and cash
equivalents (36 554) 54 805 18 567
Cash and cash
equivalents
- at beginning of
period 49 205 30 638 30 638
- at end of
period 12 651 85 443 49 205
COMMENTS
The period under review was one of consolidation around the Group's core
operations, following the disposal of its timeshare exchange and related
tourism interests last year. The focus has been on the further
development of people and internal synergies. In a market characterised
by a slower rate of international economic growth, a high level of price
sensitivity and continuing instability in parts of Southern Africa, the
Group did well to produce a 7% improvement in headline earnings per
share.
REVIEW OF OPERATIONS
Avis Rent-A-Car Southern Africa
Demand from both local and foreign inbound business remained positive in
South Africa and is reflected in an increase of 11% in rental days and 6%
in rentals. This growth was achieved in spite of a slowdown in some
neighbouring countries where business was affected by political
developments. With continued pressure on pricing in the South African
market, the average rate per rental day was down on the comparable period
in 2000.
Avis Rent-A-Car Norway and Sweden
Norway's oil-based economy was buoyant but Sweden saw a slackening in
global demand for its technology products. Nevertheless both
Scandinavian companies again made a substantial contribution to the
Group's operating income, posting a 10% improvement in rental days and a
6% rise in rentals. The rate per rental day increased marginally in line
with inflation.
Avis Fleet Services
While fleet growth was slow during the review period, this division
improved its revenues on the back of new value-added products to
supplement its full maintenance leasing activities. The firm used car
market and a sustained emphasis on cost control also contributed to a
strong increase in profitability.
Avis Enterprises
This new division, established last year to provide added value to the
Group's existing customer bases and revenue streams, is developing a
number of promising initiatives.
FINANCIAL REVIEW
The results for the corresponding period in the previous financial year
include the activities of the subsequently sold operations.
Turnover from continuing operations grew by 12% and operating income by
19%. The rate of increase in operating income was largely attributable
to low vehicle holding costs in the car rental operations, which may not
be sustainable at this level.
Despite the growth in the vehicle fleets, and the fact that the
Scandinavian acquisition debt was in place for the full six-month period,
financing costs increased only marginally. This is attributable to the
receipt of the proceeds of last year's disposals.
Of the revenue from continuing operations, 39% was earned outside the
Rand Monetary Area (2000: 36%). The full year's proportion will however
be lower as the peak Scandinavian summer season is now complete. Car
rental contributed 72% of the revenue from continuing operations (2000:
74%).
The accounting policies are consistent with those of the previous period
and comply with South African statements of Generally Accepted Accounting
Practice.
DIVIDEND
Notice is hereby given that the directors have resolved to declare an
interim dividend of 6,5 cents per ordinary share (2000:6 cents) for the
six month period ending 30 September 2001.
In compliance with the requirements of STRATE, the following dates are
applicable.
Last date to trade cum the dividend : Friday, 30 November 2001
Ordinary shares trade ex the dividend: Monday, 03 December 2001
Record date: ("RD") Friday, 07 December 2001
Date of payment: Monday, 10 December 2001
Share certificates may not be dematerialised/rematerialised between
Monday, 26 November 2001 and Friday, 7 December 2001, both days
inclusive.
PROSPECTS
The current international turmoil is likely to impact negatively on the
travel markets of the countries in which the Group operates. However, at
present this is difficult to quantify. The directors are therefore
taking a conservative view of the Group's prospects, but are still
forecasting growth in headline earnings per share for the year to March
2002, on the assumption that global circumstances do not deteriorate.
For and on behalf of the board
Glenn van Heerden Grenville Wilson
Chairman Chief Executive
Kempton Park
1 November 2001
Avis Southern Africa Limited and its subsidiaries
(Incorporated in the Republic of South Africa)
Reg. No: 1967/010320/06
ISIN No: ZAE 000013371
Share Code: AVS
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 and Media 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, P O'Brien, LM Savage, PJJ
van der Walt*.
* non-executive
AVIS SOUTHERN AFRICA LIMITED
(Incorporated in the Republic of South Africa)
Reg. No: 1967/010320/06
ISIN No: ZAE 000013371
Share Code: AVS
For immediate release
For further information call
Grenville Wilson on (011) 923 3768 or
cell 082 881 0025
AVIS POSTS PROFIT GROWTH IN UPHILL MARKET
Johannesburg, 1 November - The Avis group overcame challenging market
conditions to achieve strong growth in its car rental operations and a 7%
improvement in headline earnings per share for the six months to September.
Interim results published today show attributable income up from R39.2
million to R44.3 million on the back of a 12% increase to R565.5 million in
revenue from continuing operations. The Group noted that 39% of revenue
income was contributed by its Scandinavian businesses and other operations
outside the Rand Monetary Area. Headline earnings per share rose from 31.2
cents to 33.5 cents and an interim divided of 6.5 cents per share (2000: 6c)
was declared.
Chief executive Grenville Wilson said the Group's operations had done well to
counter the effects of continued pressure on pricing in South Africa,
political instability in some neighbouring states and a general slowdown in
international economic growth.
"Our car rental businesses in Southern Africa and Scandinavia again achieved
double-digit growth in rental days - the industry's prime performance measure
- in the face of strong competition. Our fleet services operation notched up
a strong profitability gain with new value-added products to supplement its
traditional full-maintenance leasing activities," he said.
Wilson described the past six months as a period of consolidation around core
operations following the sale last year of Avis's interest in the RCI
timeshare exchange business and related tourism activities. This has been
coupled with a strong focus on the further development of people and internal
synergies.
The sale of the timeshare and tourism interests had a beneficial effect on
financing costs, which increased only marginally despite the growth in
vehicle fleets and the cost of the Scandinavian acquisitions. The balance
sheet remained in good shape.
Looking ahead to the rest of the financial year, Wilson said the current
global unrest and uncertainty made forecasting difficult. "The Scandinavian
high season is already past and at this stage it still looks as if the
Southern African travel market is heading for a reasonably normal December
peak. The disruption of international travel will almost certainly take some
toll of our car rental operations, but this cannot yet be quantified. While
we are therefore taking a conservative view of our short-term prospects, we
still believe that growth in headline earnings per share is achievable in the
year to March 2002," Wilson said.
Issued by du Plessis Associates on behalf of Avis Southern Africa Limited.
dPA contact - Helen McKane on Tel : (011) 728 4701, Fax : (011) 728 2547/8 or
e-mail : avis@dpapr.com
