Car rental company Avis Europe has spent the past few months improving its financial position, having set up a new €375m (£306m) bank facility and successfully raised €181m through a rights issue to strengthen its highly-geared balance sheet last month. Around €120m of the net proceeds will be used to settle US bonds which were due for repayment in June 2011.
Investors participating in the equity raise will have been encouraged by these first-half results. Like-for-like sales volumes were slightly down on last year, but the trend is improving, according to chief executive Pascal Bazin, with figures turning positive in "recent weeks". And despite the competitive environment, Avis has managed to increase rental rates which meant rental income per day grew 4.5 per cent on a constant currency basis in the six-month trading period.
Fortunately, the overall financial impact of the volcanic ash cloud was neutral, after the group experienced more walk-up business and one-way rentals, which offset the lower booked volumes and repatriation costs. And tight management of the car fleet, as well as lower interest rates and finance costs, led to a €126m reduction in net debt and meant the reported pre-tax loss was reduced considerably.
There are currently no broker estimates available on the company.
Avis Europe (AVE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 201p | MARKET VALUE: | £393m | |
| TOUCH: | 197-205p | 12-MONTH HIGH: | 326p | LOW: 168p |
| DIVIDEND YIELD: | nil | PE RATIO: | 14 | |
| NET ASSET VALUE: | 103¢** | NET DEBT: | €635m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢)* | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 637 | -34.6 | -21 | nil |
| 2010 | 695 | -7.0 | -3 | nil |
| % change | +9 | - | - | - |
*EPS restated for rights issue in July 2010 and share consolidation in August 2010 **Pro-forma post rights issue and capital reorganisation £1=€1.223 | ||||
