Avis Europe rule out full-year dividend payment
Car rental firm Avis Europe dealt shareholders a fresh blow today after announcing it would not be making a full-year dividend payment.
Shares plunged 24% as the group behind the Avis and Budget brands in Europe said it expected tough trading conditions to continue into 2005.
As well as the recent economic downturn, the growing trend for travellers to hire cars over the internet has affected the company.
It said in a trading update: “Our early planning assumptions for 2005 are that the current difficult competitive conditions will continue.”
Avis added that it expected little upward movement in pricing and continued downward pressure on margins as a result.
Despite the tough conditions, profits forecasts for 2004 were left unchanged as cost efficiencies and savings on interest payments - following a reduction in debt - offset lower than expected revenues growth.
New chief executive Murray Hennessy will announce details of a review of the business at the time of full-year results in February.
