Industrial Correspondent
AVIS Southern Africa was in such a strong financial position that it expected to continue robust organic growth and make acquisitions without raising funds from the capital markets, the group said in its annual report released yesterday.
Financial director Andrew Langham said there was "nothing on the table at the moment" in terms of acquisitions, but the group was continually looking internationally.
Any acquisitions would be within Avis's core business of car rental and fleet services.
Langham also said the group still expected strong organic growth.
"In our view, positive foreign tourist perceptions will continue to sustain the growth in long-haul visitors to the country," CE Grenville Wilson said in the report.
However, there had been negative growth in the European market over the past two years.
"This trend will inevitably affect our Norwegian and Swedish businesses," said Wilson.
On the group's financial position, chairman Glenn van Heerden said most of the group's earnings were "free cash flows" and available to fund real volume growth and make shareholder distributions.
"Our capital structure allows us to support a significant amount of additional debt up to a further R1bn while still retaining a gearing level at under 4:1," he said.
Meanwhile, Avis said that had it made a significant contribution to the domestic economy in the past year through vehicle purchases.
The group's southern African operations purchased more than 17500 locally manufactured vehicles with a total value of more than R1,85bn.
The Scandinavian operation's vehicle purchases included more than 2000 Swedish-manufactured vehicles.
Avis, which has a 38% share of the southern African market, said its local productivity levels were now within 10% of productivity levels achieved in Avis operations across Europe.
Avis closed unchanged at 960c yesterday.
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