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Share Name | Share Symbol | Market | Type |
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AVE SA | ASE:AVE | Athens | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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-0.011 | -2.31% | 0.465 | 0.465 | 0.479 | 0.479 | 0.465 | 0.479 | 3,346 | 14:52:18 |
RNS Number:1191T Avis Europe PLC 11 December 2003 11 December 2003 Avis Europe plc Pre-Close Period Update Trading for the Period Avis Europe plc, the leading car rental company in Europe, Africa, Middle East and Asia provides the following update ahead of its close period for the full year ended 31 December 2003. Volumes, in terms of billed days, have continued to improve in the second half and for the full year are now expected to be some 4% ahead of prior year. The corporate market has stabilised, and is now ahead of prior year weak comparatives. European leisure volume was relatively strong over the summer and has continued to be ahead in recent months. Transatlantic business however continues to be significantly below prior year, with no sign of recovery in our US inbound business. Yield initiatives have generated revenue improvements in corporate and leisure segments during the second half of 2003, but overall pricing remains below prior year levels. We continue to maintain tight control of our efficiency measures and both fleet utilisation and employee productivity remain ahead of prior year. The Group continues to rebuild and integrate the Budget business acquired in March. This includes the acquisition of four major UK airport locations in October together with the transfer of Budget EMEA head office activities to the Avis Group headquarters in November. The current focus is on rebuilding sales into the network and ensuring effective system support, hence we have decided to postpone the previously communicated corporate network expansion plan. We expect full year Group revenue, excluding Budget, to be around 3% lower than prior year, with earnings before goodwill amortisation and exceptionals in line with market expectations. However, we expect to incur certain additional exceptional items, which are outside those market expectations and are detailed below. Other issues affecting the Period The Group has now decided to exit from its non-core business - Centrus, our accident management company, specialising in the supply of replacement vehicles to non-fault accident insurance claimants. Avis acquired the business, then called 3 Arrows, in 1998. In 2000, the House of Lords upheld consumers' right to replacement cars but at significantly lower prices than had been previously charged, thereby fundamentally changing the dynamics of the industry's charging structure. Centrus has experienced a significant recent decline in revenue in addition to persistent slow claims collection, to the extent that the operation as a whole, despite considerable effort to rebuild a new robust business model, is no longer considered viable for Avis. For 2003 we now expect Centrus to lose up to Euro10 million at the operating level. We are currently in discussions regarding the sale of certain elements of the business. Exiting Centrus is likely to generate an exceptional charge of around Euro70 million, including the write-off of Euro32 million of goodwill and additional provisions against claims receivable of some Euro30 million. As part of our overall network development strategy, we acquired the licensee for Holland in 2000 to complete corporate ownership of the core European markets and a sub-licensee in Munster, to secure corporate ownership of certain key strategic locations in the German market. However, continuing difficult local trading conditions for these two businesses has necessitated a review of the carrying value of their goodwill. As a result of this review, a goodwill impairment provision is going to be made for Euro14 million. The Group's IT projects have been re-prioritised following the commencement of the finance and IT initiatives involving the shared service centre in Budapest, together with the required investment in Budget systems. As a result, a restructuring charge of around Euro14 million will now be taken in respect of a data infrastructure development. This charge comprises a provision against previously capitalised development costs and other termination costs. The tax credit in respect of the above exceptional items is anticipated to be in a range of Euro10 to Euro15 million. As communicated in June, the Board re-based the dividend and an interim dividend of 1.3 pence per share (2.0 pence per share: interim 2002) was declared in September. Absent unforeseen circumstances, the Group expects to declare a final dividend of 2.6 pence per share (3.8 pence per share: final 2002) when it announces its results in February 2004. Outlook for 2004 We are now assuming no significant recovery in demand and therefore pricing in 2004. We will continue to maintain a tight control over operational costs. We also continue to invest in the major finance and IT restructuring projects that will generate medium term margin improvement and provide a flexible platform for the future growth and development of the Group. The Group is anticipating a broadly flat operating performance for next year. This is partly because these restructuring projects will result in previously advised operating costs of up to Euro10 million, which materially offsets the elimination of losses at Centrus. As previously advised, these projects will also result in exceptional costs of around Euro20 million in 2004. There will be a conference call for fund managers and analysts at 0900 on Thursday 11th December. For further details please contact Sara Freeman at Financial Dynamics on +44 (0) 20 7831 3113. For further information please contact: Alun Cathcart, Interim Chief Executive, Avis Europe plc, + 44 (0) 1344 426644 Martyn Smith, Group Finance Director, Avis Europe plc, + 44 (0) 1344 426644 Ben Foster, Financial Dynamics, + 44 (0) 7776 240806 This information is provided by RNS The company news service from the London Stock Exchange END TSTURUBROKRUAAA
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