Zeda Limited, the company behind the Avis and Budget car rental brands, has reported a 2.7% year-on-year decline in its car rental business.
Despite this, and on the back of its car leasing and car sales success, the company grew its profit before tax by 5.5% and increased its interim dividend by 45.5% to 80 cents.
These are key findings from the company’s interim results for the first half of the 2025/26 financial year – published on 26 May 2026.
Zeda is the licence-holder of the Avis brand in South Africa, as well as in ten other sub-Saharan Africa countries.
The company was established in 1967 as Zeda Car Rental and Tours, and adopted the Avis brand a year later.
Originally located in Bloemfontein, it had expanded to major centres like Johannesburg, Durban, and Cape Town by 1972. By the mid 1980s, Zeda was the largest Avis licensee outside of the United States.
After listing on multiple stock exchanges in 1997, Zeda would be acquired in full by Barloworld in 2005.
It was then unbundled from Barloworld in 2022, and is now once again a listed company on the JSE.
Car rentals struggle – but other business units boom
According to the latest interim report, Zeda’s car rental business declined by 2.7%.
The company cited a “highly price-sensitive environment” as a key reason for the business unit’s poor performance.
“The solid performance [of the group as a whole] was weighed down by the Car Rental Business,” said Zeda CEO Ramasela Ganda.
“We saw a reduction in rental duration across the subscription and replacement segments, adversely impacting the utilisation rate to 71% from 75% in the prior year.”
However, the revenue for the entire short-term rental business segment increased by 1.4% to R3.826 billion – in part due to a 2.7% expansion in the rental fleet.
Other business units thrive
The company saw major success from its other business units.
Zeda’s leasing business grew by 7.5% to R1.718 billion, which was heavily driven by its focus on diversification.
While its primary driver of revenue – the corporate sector – enjoyed revenue growth of 10%, its public sector and heavy commercial revenue increased by 43.8% and 21.5% respectively.
“About two or three years ago, that segment [leasing] used to contribute about 20% of our business. It now contributes about 31% of our business,” Ganda told Business Day TV.
The Zeda car sales business, meanwhile, grew by 12.9% in volume and 5.5% in revenue.
The gap between volume and revenue growth is because the company embraced a strategic focus on competing more strongly in smaller vehicle categories.
The company said it is also earning excellent profit on its vehicle disposals.
This is owing to the rising prices of new cars in South Africa, which is driving demand for lightly used vehicles.
“As a car rental business and leasing business, we produce nearly-new secondhand cars,” said Ganda, speaking to Stephen Grootes of 702.
“That market is actually not that occupied, and we are the market leader in that.”
These vehicle disposals played a major role in helping Zeda reduce its net debt by R139 million to R6.24 billion.
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