Ramasela Ganda took over the hot seat at the Avis Budget Group in April 2020, a few days after lockdown, steered the car rental company through its troubles during the pandemic and, next month,  she will be heading up the Zeda Group, which is set to be listed separately on the JSE on 13 December. 

The JSE has now granted Barloworld and Zeda approval for the listing under the name “Zeda”, subject to Zeda obtaining the requisite spread of shareholders as required by JSE Listings Requirements.

Zeda released its pre-listing statement on Monday, with strong maiden results ahead of its unbundling from Barloworld.   

The spinoff of the diversified vehicle rental and leasing operation enables Barloworld, a global industrial processing, distribution and services company, to refocus on its core businesses: earth-moving equipment and consumer businesses.

As the largest and only integrated mobility partner in sub-Saharan Africa, Zeda has long-term licences with the Avis Budget Group to operate the international brands.

Zeda’s maiden results, ​​for the year ended 30 September 2022, reflect a healthy 6.6% increase in group revenue (R8.2-billion) despite a smaller size fleet and a slow recovery in inbound tourism. Operating profit is up 52.8% (to R1,3-billion), at a margin of 15.5% (up from 10.8% in the 2021 financial year). 

Ganda, who takes over as Zeda CEO next month, said coming into the business at the start of the pandemic – at a time when car rental was on its knees while Avis Budget’s short-term rental, leasing and annuity business was unaffected – forced many changes for the company. 

“For me, having to restructure the business by putting an organisational structure in place that is fit for purpose after developing the strategy of integrated mobility has been a tough and exciting road.”

Two years down the line, Zeda boasts delivering a 32% return on equity and operational performance of R2.8-billion, which the group has not seen before. 

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Commenting on the results, Ganda said Zeda’s maiden set of results were delivered in a challenging operating environment characterised by slow economic recovery, inflationary pressures and global supply chain constraints which affected its ability to procure vehicles.

In the leasing business (Avis Fleet), revenue was slightly down by 0.9.% to R2,2-billion, due to parts pricing, interest rates and foreign currency fluctuation, with leasing revenue growing by 1.9% to R1.75-billion. Operating profit was down by 18.6%. 

The car rental business grew revenue by 9.7% to R5,98-billion due to demand for subscription offerings, insurance business and the recovery in domestic and corporate travel, while operating profit surged 159.3% to R861-million, surpassing pre-Covid levels. 

It’s been a good journey to focus on getting the business right and on a level where it can stand alone, go out to the market and do great things, she says. 

There has been significant tailwind in the business, she says, one of which is owing to supply chain issues: With 54% of the business as contracted services, they have focused on delivering on contracts and see significant recovery with the opening up of the supply chain. 

Discretionary business, which comes from inbound and international travel, is still operating at 40% of pre-Covid levels, but it’s an improvement on 2021, which was operating at 25%. 

Corporate sector business is now trading at about 67% of pre-Covid levels, which is where they are seeing good potential for recovery.

“We are entering into an evolving offering, especially as a flexible subscription offering. We are really focusing on making sure that we can drive the economy to us as a vehicle usership economy that understands your total cost of ownership of a vehicle. 

“For us this is where we see the growth… We need to be more accessible and digitised, and make ourselves available on demand.”

Diversifying into the heavy commercial vehicle sector has helped lift Zeda’s results. Ganda says they are excited that just this year, Zeda grew its portfolio by about 164%, which equates to about 300 new vehicles added to the fleet. 

“We only started leasing heavy commercial vehicles in October 2020, as part of our strategic change. Propelling our growth is how the last mile is taking control of how we do things. This has been a very positive move for us.” BM/DM