Zeda, the Johannesburg Stock Exchange-listed provider of integrated mobility solutions, has witnessed its share price climb more than 11 per cent following the release of its annual results, which highlighted the effectiveness of its diversified operations in buffering against headwinds in traditional car rental and vehicle sales sectors. The group, which holds licences for the Avis and Budget brands across South Africa and ten other sub-Saharan nations, reported revenue of R10.65 billion for the financial year ending 30 September 2025, a modest 1.7 per cent rise that masked deeper resilience in key growth areas. As reported by Business Day, this performance underscores Zeda’s strategic pivot towards leasing and subscription models, even as the broader South African automotive market grapples with a 10.5 per cent compound annual growth rate projected for used car sales through 2033, driven by affordability pressures and a shift away from outright ownership.
The results reflect a year of calculated adaptation in a landscape marked by economic constraints and evolving consumer preferences. Headline earnings per share rose 15.7 per cent to 361 cents, while gross profit expanded 3.9 per cent to R4.35 billion, fuelling a total dividend payout of 181 cents per share—a 50 per cent distribution in line with policy. Net debt remained manageable at R5.18 billion, supported by proactive access to debt capital markets that reduced refinancing risks and extended long-term funding horizons. According to TransUnion, the surge in alternative ownership models like leasing and subscriptions—now encompassing 25,000 vehicles on South African roads—has been pivotal, with younger consumers increasingly favouring flexible terms over traditional financing, where over 50 per cent of used vehicles still rely on loans.
At the core of Zeda’s success lies its leasing portfolio, which delivered a standout 15.7 per cent revenue increase to R3.2 billion, accounting for nearly a third of overall income. This growth stemmed from heightened demand for corporate leasing and heavy commercial vehicles, alongside a 26 per cent uplift in Greater Africa operations, where contributions now stand at 23.5 per cent of leasing revenue. Notable expansions included 37 per cent growth in Zambia and 73 per cent in Lesotho, bolstered by new licences in East, West, and Central Africa that promise a more unified continental strategy. Avis Fleet, Zeda’s leasing arm, oversees more than 200,000 vehicles, positioning the group to capitalise on the African used car market’s estimated value of USD 48.68 billion in 2025, as detailed by Mordor Intelligence, where South Africa alone commands 28.4 per cent of the segment amid rising urbanisation and credit access for second-hand purchases.
In contrast, the car rental division faced familiar challenges, with revenue dipping 3.4 per cent to R7.4 billion due to a 14.6 per cent drop in used car sales volumes and a 4.1 per cent revenue decline in that sub-segment. Yet, operating profit here climbed 23.3 per cent to R872 million, propelled by improved fleet utilisation, a 53 per cent jump in subscription volumes, and a 2.1 per cent rise in rental days from strategic partnerships in commercial and leisure travel. To counter downward pressure on used vehicle prices—exacerbated by aggressive pricing from Asian imports and a 2.6 per cent contraction in short-term rentals—Zeda extended the lifecycle of rental assets, selling them at more favourable ages to safeguard margins. This tactical adjustment, while trimming sales volumes, enhanced profitability in a market where new car registrations reached 38,603 units in September 2025 alone, per Trading Economics, yet overall vehicle sales growth slowed amid insurance claim shortfalls and customer downgrades.
Innovation and sustainability initiatives further fortified Zeda’s outlook, including the launch of an e-commerce platform to bolster retail car sales and enhancements to digital channels centred on customer needs. The group introduced a sustainable finance framework tied to key performance indicators in renewable energy, water efficiency, and support for small, medium, and micro enterprises, evidenced by solar installations at five East London facilities and a new waste management partnership. With board-approved strategies for information technology and data integration now embedding intelligence across operations, Zeda is primed for purposeful scaling. As the company enters the new year with fortified financials and operational momentum, its ability to turn market turbulence into opportunity signals enduring strength in sub-Saharan Africa’s dynamic mobility sector.