Fleet News

EuroDollar profits double as car prices stabilise

EURODOLLAR doubled its pre-tax profits and recorded an 11.5% increase in turnover for the six months to September 30, 1996. The rental company's interim results reveal turnover increased to £54.2 million (£48.7 million in 1995), generating a pre-tax profit of £4.8 million (£2.4m).

Ian Mosley, EuroDollar's chief executive, said strong growth from large customers in the corporate sector had improved volumes, but had diluted some of the overall average price increases achieved.

The stability of residual values in the 'nearly new' market has helped profitability, even if EuroDollar had already limited its exposure to the risk of a repeat of last year's collapse by sourcing 65% of its fleet with residual values guaranteed by the manufacturer. However, Mosley predicted that vehicle holding costs would continue to rise, due to vehicles' extended operating lives, and the long term weakening of the relationship between used vehicle values and their cost new. The widely anticipated rise in interest rates would also force costs up.

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