| Wed 15 Jan 2003, 15:22 | | Avis Southern Africa Limited - Excellent third qua |
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AVIS SOUTHERN AFRICA LIMITED
Reg. No 1967/010320/06
ISIN : ZAE 000013371
Share code : AVS
15 January 2003
Dear Avis stakeholder
Excellent third quarter for group
Trading in the quarter to December has been strong with all group businesses
delivering significant performance improvements both at an operational level and
on the bottom line. Interest rate increases in South Africa have had some effect
on growth but the economy still appears to be sound, as evidenced by volume
increases in all our markets here and the buoyancy of the used-car sector. The
Scandinavian currencies have remained relatively robust: while the Rand has
gained around 8% since the start of our financial year, the average exchange
rate of the Kroners for this period is still some 15% stronger than for the
previous year.
SA tourism boom boosts business
As anticipated, the current tourism season in South Africa is proving to be the
best ever, and the high-level influx of foreign visitors has had a positive
impact on our Rent-A-Car operations in this region. In the quarter to December,
Rent-A-Car Southern Africa increased rental days by a substantial 15% over the
same period in 2001 off an 11% rise in rental transactions. This brings our year
to-date volume growth to 9%, which is in line with the expectations we outlined
earlier. The excellent improvements in people productivity and fleet utilisation
noted at the half-year mark were maintained through the past quarter.
Scandinavian operations shine again
The Rent-A-Car businesses in Norway and Sweden have also posted further gains,
increasing rental days by an overall 20% against the previous year`s December
quarter. Despite feeling the effects of the global economic slowdown in the
corporate rental market, year-to-date rental-day growth for this region is
running at 18% and is still expected to exceed 15% for the year to March. Both
countries continue to show improvement in people productivity and vehicle
utilisation. The Scandinavian operations should account for close to a quarter
of the group`s attributable income for the current financial year.
Fleet Services sustains growth momentum
Fleet Services has sustained the solid performance reported at the interim
stage. Vehicles under management now exceed 51 500, a 14% increase since the
beginning of the financial year. The division focuses on small to medium
corporate fleets and has significantly expanded its presence in this market
sector. The Kruger National Park contract is being actioned successfully (in
conjunction with our black partners) and is already contributing to the
division`s bottom line. We expect this will have a positive influence on the
outcome of government and parastatal contracts the division is currently
tendering for.
Cendant, Avis plc and Budget
Our ultimate licensor, the Cendant Corporation in the USA, has acquired the
Budget car rental brand and certain of the Budget operations in the USA. Since
then Avis plc, which holds the licence for the Avis brand in Europe, Africa, the
Middle East and Asia, has announced that it is seeking to acquire the rights to
the Budget trademark in these regions, along with the existing Budget licensee
agreements and royalty streams. The discussions are taking place in the context
of the Chapter 11 proceedings in the USA.
Prospects
Indications for the last quarter of the financial year - including the continued
strength in international tourism to SA and the expected impact of the Cricket
World Cup - are highly positive and we are now confident that our original
management targets for the year to March 2003 will be exceeded.
Our results for the year are scheduled for release on 15 May 2003 and we shall
be hosting presentations on these results and on the prospects for 2004 in
Johannesburg on that day and in Cape Town on 16 May. Should you wish to attend
either of these presentations, please contact our investor relations at
avis@dpapr.com.
Yours sincerely
Grenville Wilson
Chief Executive
Directors: G van Heerden* - Chairman,GJ Wilson - CEO,TRT Bohlmann*, GD Cilliers,
HR Cloete*, BP Diamond*, JW Dreyer*, HM Khoza*, AR Langham, P O`Brien, LM
Savage, PJJ van der Walt*. (* non-executive)
Company Secretary: J.L. Stiff
Date: 15/01/2003 03:00:00 PM Produced by the JSE SENS Department
