Barloworld signals Avis to be out by year end

As it plans to unbundle or sell car-hire firm Avis, diversified industrial group Barloworld says it expects to report mixed earnings for the financial year to end-September.

The Avis move has received board approval.

Barloworld said in a trading update on Monday group basic earnings per share are expected to fall 22%-26% to 1, 026.2c1, 078.2c, while headline earnings per share (Heps) will do the opposite and rise 47%-55% to as much as 1,846.3c.

“Following the board’s approval to sell or unbundle and separately list the car rental and leasing business, it is classified as held for distribution in terms of IFRS [International Financial Reporting Standards] 5,” the company said.

“Accordingly, car rental and leasing are classified as part of discontinued operations in the income statement, and comparatives have been restated in this regard.”

CEO Dominic Sewela has said without having had a convincing offer from potential buyers, the group’s view was that the business was well placed to undergo an unbundling, which would be completed before the end of the calendar year.

Basic earnings per share from continuing operations compared to the prior period are expected to rise 42%-44%.

Focusing on the industrial equipment and consumer industries sectors, Barloworld is the official Caterpillar dealer with operations in 16 countries.

The R20.7bn group is expected to release its results for the financial year on November 21.

Barloworld’s share price fell the most since May, down 5% to R104.98 on Monday.

FOLLOWING THE BOARD’S APPROVAL TO SELL OR UNBUNDLE AND SEPARATELY LIST IT, IT IS CLASSIFIED AS HELD FOR DISTRIBUTION