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Interim Results for the Six Months Ended 31 March and Cash Dividend Declaration
Zeda Limited
Incorporated in the Republic of South Africa
Registration number: 2022/493042/06
JSE share code: ZZD
ISIN: ZAE000315768
("Zeda" or the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH AND CASH DIVIDEND DECLARATION 2025
Zeda reported a solid set of interim results for the first half of the year, despite a
challenging trading environment that impacted our Group's top-line revenue. Our interim
performance reflects the strength and resilience of our diversified business model. In a
period where traditional car rental and vehicle sales faced mounting pressure, our Leasing,
Subscription, and Greater Africa strategies delivered, helping grow earnings, improve margins,
and continue investing for the long term. We achieved this through a stringent implementation
of the operating model of financing right, buying right, using right and disposing right.
Notwithstanding the 1.6% decline in revenue, we improved margins, increased profitability, and
delivered shareholder returns. Our diversified offering helped cushion the impact of lower sales
volumes, particularly in used vehicles. Performance in the rental business was largely sustained
by better fleet utilisation, the growing contribution of higher-yielding subscription rentals,
and a favourable sales mix. In addition, our revised approach to estimating vehicle realisation
values - applying more granular, model-specific inputs for mileage and age - enabled a more
accurate alignment of book values to expected resale values. This refinement, along with extended
vehicle cycles where appropriate, supported margin and impairment stability and reflects our
continued discipline in managing capital and asset turn.
All these activities culminated in the following Group salient features for the first half of
the year:
- Revenue of R5 188 million was 1.6% lower than the prior year (HY2024: R5 270 million)
- Gross profit increased by 4.6% to R2 240 million with an improved margin of 200 basis points
to 43%, despite lower revenue
- EBITDA margin maintained at 34% despite an EBITDA decline of 3.1%
- Operating profit margins increased by 5.4% and the margin improved by 100 basis points to 16%
- BEPS increased by 11.1% to 183.7 cents
- HEPS increased by 11.2% to 184.1 cents
- Net debt to EBITDA of 1.9x (HY2024: 1.5x)
- ROE of 21.8% (HY2024: 28.5%)
- ROIC of 12.2% above WACC of 11.8%
- Interim dividend declaration of 55 cents per share, an increase of 10%
The first half of the year was characterised by a challenging trading environment. We observed clear
signs of strain across Corporate South Africa, reflected in delayed investment decisions, including
fleet replacement, holding onto vehicles for a longer period, and opting for extensions of contracts.
Similar strain was evident among SMEs, particularly in the mining and transport sectors. The Leasing
Business maintained its growth trajectory, despite the overall delayed fleet investments.
South Africa's car sales market continues to evolve at a rapid pace, driven by the growth of
Asian Original Equipment Manufacturers ("OEMs"). The entrance of these nontraditional brands
continues to drive downward pricing pressure. The existing traditional brands have responded with
aggressive discounts, to protect their market position. Our operating model allows the agility to
review and choose the point at which we defleet, and we act accordingly. We further observed intense
pricing competition due to high rental industry fleet volume and subdued demand.
The challenging trading environment impacted our top line, with Group revenue declining 1.6%, compared
to the prior period, to R5 188 million. This was primarily due to lower car sales volumes, resulting in
a 5.8% decline in car sales revenue. Despite a strong car sales performance in the first quarter, the
second quarter was slow due to delayed defleeting and a strong demand for car rentals from the leisure
segment. Our integrated mobility strategy, which includes a diversified portfolio, mitigated the decline
in revenue. The leasing segment revenue increased by 5.6% in line with our strategic focus on corporate
leasing, heavy commercial, and the Greater Africa region. Short-term rental revenue remained flat despite
a significant contraction in the replacement business, mainly due to reduced insurance claims, and price
pressure resulting from excess capacity in the rental industry.
Zeda's gross profit grew by 4.6% to R2 240 million, with an improved margin of 200 basis points to 43%,
despite lower revenue. We also maintained the EBITDA margin at 34% compared to the prior period.
We were not immune to the inflationary cost pressures, as our EBITDA decreased by 3.1%. Initiatives are
underway to contain operating expenses from the second half of the year. Basic Earnings Per Share ("BEPS")
and Headline Earnings Per Share ("HEPS") increased by 11.1% and 11.2%, respectively.
We registered a R5 000 million Domestic Medium-Term Note ("DMTN") programme with the JSE on 21 January 2025,
and we raised R850 million from our first bond issuance on 10 March 2025 at favourable rates. We expect the
benefits of the DMTN programme's favourable rates to be realised in the second half of the year.
Net debt increased to R6 398 million (HY2024: R5 188 million) to support fleet growth reported during the
period. The consequence of the timing of the fleet investment in the second quarter was that limited EBITDA
was generated in the period, which inflated the net debt to EBITDA ratio to 1.9x (HY2024: 1.5x). We expect
the ratio to normalise in the second half. Return on Equity ("ROE") was 21.8% (HY2024: 28.5%), and Return on
Invested Capital ("ROIC") was 12.2%, above our Weighted Average Cost of Capital ("WACC") of 11.8%.
The Board of Directors of Zeda ("the Board") has declared an interim dividend of 55 cents per share for the
period, in line with our dividend payout policy of 30% to 50% of net profit after tax.
This period was not without pressure, but our ability to pivot across offerings, manage capital efficiently,
and adapt our pricing and fleet strategy was key. We remain focused on disciplined execution, expanding into
higher-growth segments like commercial and subscription, and managing risks proactively.
GROUP PERFORMANCE
R'million HY2025 HY2024 %
Revenue 5 188 5 270 (1.6)
EBITDA 1 740 1 796 (3.1)
EBITDA margin (%) 34 34 -
Operating profit before capital items 832 789 5.4
Operating profit 832 789 5.4
Operating margin (%) 16 15 6.7
Basic earnings per share (cents) 183.7 165.4 11.1
Headline earnings per share (cents) 184.1 165.5 11.2
Net debt to EBITDA (x) 1.9 1.5 (26.7)
Return on equity (%) 21.8 28.5 (23.5)
Net asset value per share 16.7 14.3 16.8
OUTLOOK STATEMENT
Our strategy remains unchanged, and our key strategic pillars for growth remain intact. The bedrock of our
growth pillars consists of the subscription business, the corporate leasing book, Greater Africa, and the
used car business. These pillars provide us with access to vehicles, markets, and a disposal channel, which
are core to our fundamentals which remain strong despite the challenging trading environment.
The evolution in the market includes considering different sources of funding such as long- and short-term
subscriptions. We have seen this in the growth of our subscription business and long-term leasing. The leasing
business remains resilient, with improved prospects for the remainder of the year, driven by a healthy pipeline
and public sector activities. We will build on the strong momentum demonstrated by the short-term subscription
and grow the rental volumes. The subsequent defleet provides us with comfort that we will improve the used car
sales volumes, which were impacted in the first half of the year. These top-line growth activities, along with
corrective measures that include negotiations with our customers on over-term contracts, will drive top-line
revenue in the second half of the year.
The trading environment is expected to remain challenging, with lower-than-expected insurance claims putting
pressure on our replacement segment. The short-term rental market, which is entering its winter cycle, will
further exacerbate these pressures.
With the headwinds in the key focus regions, we will prioritise efficiencies to contain our operating costs
below inflation. We are also implementing a multi-year efficiency programme that aligns with our portfolio
review to enhance the performance of our services and improve branch profitability.
We remain committed to divesting from our Ghana investment by the end of the calendar year and redirecting
our resources to other portfolios. We aim to have the Ghana business as discontinued operations by the end
of the financial year.
The Board has endorsed the strategic direction for information technology, which will enable the business
to continue reinvesting in response to and pre-empting the evolution within the mobility space.
DIVIDEND DECLARATION
The Board has declared an interim dividend (Dividend number 3) of 55 cents per share in respect of the
half year ended 31 March 2025, on 27 May 2025, subject to the applicable dividend withholding tax rate of
20% levied in terms of the Income Tax Act (Act 58 of 1962) (as amended). Accordingly, for those shareholders
not exempt from paying dividend withholding tax, the net ordinary dividend will be 44 cents per share. The
dividend has been declared out of income reserves, and the number of ordinary shares in issue at the date of
this declaration is 189 641 787. The Company tax number is 9042025305.
The following dates apply to the dividend:
Last date to trade cum dividend Tuesday, 8 July 2025
Ordinary shares trade ex-dividend Wednesday, 9 July 2025
Record date Friday, 11 July 2025
Payment date Monday, 14 July 2025
Share certificates may not be dematerialised or rematerialised between Wednesday, 9 July 2025, and
Friday, 11 July 2025, both days inclusive.
27 May 2025
JSE Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
FORWARD-LOOKING STATEMENT
This statement contains forward-looking statements. All statements, other than statements of historical
facts, including, among others, statements regarding our strategy, future financial position and plans,
objectives, projected costs, anticipated cost savings, financing plans and projected levels of growth in
the communications markets, are forward-looking statements. Forward-looking statements can be identified
by terminology such as "may", "might", "should", "expect", "envisage", "intend", "plan", "project",
"estimate", "anticipate", "believe", "hope", "can", "is designed to", or similar phrases. However, the
absence of such words does not necessarily mean a statement is not forward-looking. Forward-looking
statements involve several known and unknown risks, uncertainties and other factors that could cause our
actual results and outcomes to be materially different from historical results or any future results
expressed or implied by such forward-looking statements. Factors that could cause our actual results or
outcomes to differ materially from our expectations include, but are not limited to, those risks
identified in the Zeda financial reports available at http://www.zeda.co.za.
Zeda cautions readers not to place undue reliance on these forward-looking statements. All written and
verbal forward-looking statements attributable to Zeda, or persons acting on behalf of Zeda, are
qualified in their entirety by these cautionary statements. Unless we are required by law to update these
statements, we will not necessarily update any of these statements after the date of publication of this
document so that they conform either to the actual results or to changes in our expectations.
Any forward-looking information disclosed in the interim results for the six months ended 31 March 2025
("results announcement") has not been reviewed or reported on by our independent external auditors.
FURTHER INFORMATION
The short-form interim financial results announcement is the responsibility of the Board. It is only a
summary of the information contained in the condensed consolidated interim financial statements for the
six-month period ended 31 March 2025 ("condensed consolidated interim financial statements") and does
not contain full or complete details.
Any investment decisions should be based on the condensed consolidated interim financial statements
published on the JSE's cloudlink on Tuesday, 27 May 2025. The condensed consolidated interim financial
statements have been reviewed by the Company's auditors, SizweNtsalubaGobodo Grant Thornton Inc., who
have expressed an unqualified reviewed conclusion. The condensed consolidated interim financial statements,
including the auditor's review conclusion is available on the Company's website at:
https://zeda.co.za/investors/interim-results and on the JSE's cloudlink at:
https://senspdf.jse.co.za/documents/2025/jse/isse/ZZDE/ie2025.pdf
Copies of the consolidated financial statements may be requested from Investor Relations at:
investorrelations@zeda.co.za
http://www.zeda.co.za
Date: 27-05-2025 07:30:00
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