Zeda share price soars 11% - strong earnings growth in the tough automotive market

ZEDA, the JSE listed integrated mobility solutions provider, saw its share price rocket over 11% after its annual results showed how it relied on its diversified business model to counter pressures facing traditional car rental services and vehicle sales.

- EDWARD WEST

The group, which owns the Avis brand in South Africa and 10 other sub-Saharan countries, delivered a total dividend of 181 cents per share, a 50% payout aligned with policy, for the financial year to September 30, 2023, its results published yesterday showed. The share price traded at R13.81 on Tuesday afternoon.

"We delivered strong earnings growth and operating margin expansion in a constrained market, while maintaining our commitment to shareholder returns," said the CEO Ramasela Ganda in a statement.

"Zeda achieved a strong set of results, underscoring our solid return on invested capital, profit margins, and remarkable double-digit growth in both earnings and operating profit. These accomplishments are especially significant given the challenging trading environment we navigated," he said.

The strategy to focus on Leasing, Subscription, and the expansion of the Greater Africa business enabled the group to offset the impact of declining used-car sales volumes. Revenue was up 1.7% to R10.65bn, while gross profit increased 3.9% to R4.35bn.