AVIS SOUTHERN AFRICA LIMITED
Reg. No: 1967/010320/06
ISIN No: ZAE 000013371
Share code : AVS
Avis achieves market leadership in Sweden
For the first time in 14 years, the Avis operation in Sweden is now the
Number One car rental business in that country, as measured by market share
at the four major airports. (Avis has, of course, long been the market
leader in South Africa and Norway.) Avis Sweden achieved market leadership
in September this year and in the months since then has strengthened this
position. This very pleasing development reflects the continuing growth of
our Scandinavian businesses as well as Avis Southern Africa's ability to add
value there. Both Sweden and Norway have consistently outperformed
expectations since we acquired them, and there is every indication that
their contribution is sustainable. This will enable us to meet our stated
aim of generating 25% of the group's net profit outside the Rand Monetary
Area by 2003.
Arbitration award reduces cost of Norwegian acquisition
In the meantime, an arbitration panel in Oslo has made an award of some R22
million to Avis Southern Africa in relation to our acquisition of the
Norwegian operation. This ruling results from our claim that the
acquisition price had been overstated and that audited financial statements
provided to us at the time had later proved incorrect. As you may recall,
we acquired the Norwegian and Swedish businesses in 2000 for around R300
million in cash. The bulk of the arbitration award is being allocated to a
reduction of the carrying value of the investment in our accounts, and the
balance is attributable to the recovery of expenses as well as interest.
Operations remain buoyant through last quarter of year
As I noted in my January newsletter, the December quarter ended well for our
operations after a nervous start in the wake of September 11. The robust
performance in evidence at the end of 2001 is being sustained through the
current quarter, with volumes in South Africa and Scandinavia well ahead of
those for the previous year. Both regions are continuing to produce double-
digit growth, in spite of the fact that this is the low season in
Scandinavia. In South Africa, where we are now enjoying the benefits of the
new inbound rate structure which came into effect in November, it looks like
the December seasonal peak will carry on to April without flagging. Fleet
Services is also doing well, and in the case of Rent-A-Car as well as Fleet
Services, good operational performances are being supported by a strong used
car market. The group remains on course for a satisfactory growth in
headline earnings for the 12 months to March.
New management structure for RAC Southern Africa
We have flattened Rent-A-Car Southern Africa's management structure as a
further step in the process of refocusing on our core operations and
allocating our top management resources optimally. This means that Guy
Harris has not been replaced as managing director of the division. Instead
Pat O'Brien and Lance Smith will report to me directly, Pat on operations
and Lance on sales and marketing. Pat is an Avis veteran (and a main board
director) whose many assignments in the group included bedding down our
Scandinavian operations as their first South African CEO. Lance has been
RAC Southern Africa's director in charge of sales and marketing for the past
three years.
Year-end results presentations
Our results for the year to March 2002 are due to be released on 16 May. As
usual we shall be making presentations on the results in Johannesburg and
Cape Town around that date. Invitations will be sent out nearer the time;
you can ensure that you are on the mailing list by e-mailing your details to
avis@dpapr.com.
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