04th August 2011
Avis Europe plc, a leading car rental company in Europe, Africa, the Middle East and Asia, announces unaudited interim results for the six months ended 30 June 2011.
As anticipated, a strong underlying1 profit before tax first half performance, the highest since 2003, supported by the overall economic recovery and benefitting from both the substantial transformation that has been undertaken in the business, strict cost and capital control, and the drive for profitable growth. Since the period end, shareholders have voted to accept the recommended offer made by Avis Budget Group, Inc. on 14 June 2011.
Highlights
- Underlying1 profit before tax substantially increased to €11.5 million (2010: €0.3 million) and total profit before tax also €11.5 million (2010: €7.0m loss), with both operating and pre-tax margins2 ahead, driven by:
- Volumes up 10.7%, including 2.4% higher rental length
- Rental revenue per day reduced by 5.3% on a constant currency basis, reflecting the longer rental length, geographical and customer group mix, and the ash cloud benefit in the comparative period
- Fleet costs improved on good gain on sale performance, lower maintenance costs on reduced age of fleet, and utilisation 1.7% pts better largely due to the ash cloud effect in the comparative period
- Net finance costs reduced following the July 2010 Rights Issue and continued focus on capital management
- Underlying1 return on capital employed3 further increased to 12.9%
- Underlying1 and total earnings per share at 4.1 euro cents reflects both the improvement in profits and substantially lower tax rate
- Exceptional charge of €2.1 million relates to the offer from Avis Budget Group, Inc. and was fully offset by a gain on re-measurement items
- Net debt was €655 million, €131 million lower than June 2010 following the €181 million Rights Issue partially offset by the effects of volume growth and early fleet sourcing actions following the Japan tsunami
- Profitable growth strategy on-track; offer from Avis Budget Group, Inc. approved by the Company’s shareholders on 1 August 2011
| |
H1 2011 |
H1 2010 |
Change |
| Underlying1 results |
|
|
|
| Rental income (€m) |
570 |
539 |
+31 |
| Profit before tax (€m) |
11.5 |
0.3 |
+11.2 |
| Profit after tax (€m) |
8.0 |
0.3 |
+7.7 |
| Earnings per share4 (euro cents) |
4.1 |
0.2 |
+3.9 |
| |
|
|
|
| Return on capital employed3 |
12.9% |
12.0% |
+0.9% pts |
| |
|
|
|
| |
H1 2011 |
H1 2010 |
Change |
| Statutory results |
|
|
|
| Rental income (€m) |
570 |
539 |
+31 |
| Profit/(loss) before tax (€m) |
11.5 |
(7.0) |
+18.5 |
| Profit/(loss) after tax (€m) |
8.0 |
(3.7) |
+11.7 |
| Earnings/(loss) per share4 (euro cents) |
4.1 |
(3.0) |
+7.1 |
| |
|
|
|
| Net debt (€m) |
(655) |
(786) |
+131 |
Pascal Bazin, Chief Executive, said:
“We have delivered another strong performance in the period as anticipated, achieving our best interim profit before tax since 2003, building on the management actions undertaken over the past three years. We continued to experience demand recovery in all our main markets and improved both operating and pre-tax margins, together with a further increase in return on capital employed.
Recent trading for the start of our key summer peak season has been strong, continuing the substantial volume growth achieved in the first half, and with some early signs of improvement in the rate per day trend.
During the period, we also continued our geographical development, particularly growing our joint venture in China, and development of new mobility solutions with the full acquisition of Okigo and subsequent launch of “Avis on Demand” in France, trial of new self-service kiosks in Germany, and expansion of Home Delivery & Collection in the UK. These initiatives, together with the proposed reunification of the Avis and Budget brands globally with the recommended acquisition of the Group by Avis Budget Group, Inc., which has been strongly supported by our shareholders, position the business for a highly positive future.”
1 Underlying excludes exceptional charges, certain net re-measurement and economic hedging items (see Basis of Preparation). Underlying is not a defined term under IFRS, and is not intended to be a substitute for, or superior to, IFRS measures.
2 Underlying gross, operating and pre-tax margins are calculated as underlying gross, operating profit and pre-tax profit (respectively) divided by total rental income.
3 Return on capital employed is the ratio of underlying operating profit for the past 12 months, including the operating profit of the joint ventures and associate, to capital employed. Capital employed is an average of current and previous two period end closing balances, comprising shareholders’ funds plus net debt and other liabilities.
4 Earnings per share has been restated for the effect of the prior year Rights Issue and subsequent share consolidation, to facilitate a direct comparison.
Enquiries:
Avis Europe plc |
|
| Pascal Bazin, Chief Executive |
01344 426644 |
| Martyn Smith, Finance Director |
|
MHP Communications |
|
| Andrew Jaques, Barnaby Fry, Simon Hockridge |
020 3128 8100 |
View the full interim results announcement (PDF, 476KB).
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