Avis lifted by strong summer trade
Car hire firm Avis Europe boosted recovery hopes today after half-year losses narrowed and trading picked up in the key summer holiday period.
The England-based company, which operates the Avis and Budget brands in Europe, the Middle East and Asia, said it had seen strong volumes and revenues during July and August.
The group posted narrower pre-tax losses during the six months to June 30, down from €4.5m last year to €1.9.
The improvement came even as good volumes growth and increased income from licensees were offset by higher fleet, staffing and interest costs. Pricing in the period remained at lower levels than last year.
The company confirmed it would take a €2m profits hit during the second half of the year after it discovered a "potential malpractice" at its Portuguese operations in June.
The firm has not disclosed the details of the "malpractice" but said it had conducted a full investigation into both its Portuguese business and other European operations. Portugal contributes around 3% of total group revenues.
During the period, Avis has continued its drive to improve margins, including the disposal and licensing of its operations in Greece and the licensing of its business in the Canary Islands.
It also worked to cut costs through further investment in websites and marketing in an attempt to drive down selling costs.
The company has been focused on transforming its customer base in an attempt to appeal to more profitable customers, with the improved online booking services and it loyalty programme, Avis Preferred.
Billed days increased by 6% over last year, driven by increased rentals and longer rental periods. However, revenues per day slipped 1.6% largely due to the higher mix of insurance and leasing business, longer rental periods and continued high competition in the business.
Avis has been battling against tough trading conditions for the last few years, initially sparked by a downturn in tourism business following the September 11, 2001, terrorist attacks.
It has also seen fleet and other input costs soar, while competition in the market has increased following the expansion of low-cost rental firms.
