Avis Europe's 2006 profits down

Avis Europe’s 2006 profits down in tough market
28th Febuary 2007

The rental group Avis Europe plc’s preliminary results for the year ended 31 December 2006 released yesterday show ‘good’ volume growth but in the group’s words, reflected continuing competitive pricing and higher fleet costs in a commercial environment not set to improve.

Revenue was up 4.8% to €1,337 million, and billed rental days up 5.9%, though revenue per day turned out 1.4% lower. Underlying pre-tax profit increased to €38.9 million (2005: €37.8 million), but after a net exceptional pre-tax charge of €28.9 million (primarily restructuring costs) and certain re-measurement items and economic hedges which brought a net gain of €0.7 million, total profit before tax was €10.7 million, against €20.1 million a year earler.

Avis’ expectations for 2007 results remain broadly unchanged. Murray Hennessy, Group Chief Executive, said: "We are making good progress in implementing our strategy, which comprises: reducing cost; implementing revenue management to improve price, yield and utilisation; targeting our most profitable customer groups; and tight control of fleet.

“Market conditions in the industry remain difficult. However, we believe we have the right strategy and are making good progress implementing our key initiatives. This progress has helped us to deliver results ahead of expectations for 2006 and our outlook for continued progress in 2007 remains unchanged. However, looking further ahead, the external environment has been, and is expected to continue to be, more difficult than we assumed two years ago and no longer supports the guidance we gave in 2005 regarding margin improvement."

Autoindustry.co.uk