Fleet News

Residuals crisis hits Avis profits by £1.1m

THE residual value crisis in the UK's nearly new car market wiped £1.1 million off Avis Europe's £36 million profits for the first six months of 1998. But Alun Cathcart, Avis Europe's chairman and chief executive, said the company had protected itself from most of the recent pressure on prices in the UK's second-hand car market by acquiring 88% of its fleet on risk-free, buy-back agreements.

And he announced an impressive set of financial results for the car hire giant, with pre-tax profits up 62% to £36 million (1997: £22.3m), on turnover up 8% to £252.1 million (£233.5m) for the year to June 30, 1998. Across the continent Avis increased the number of its rental days by 13.5%, despite imposing rate rises of about 4%, and it achieved double digit expansion in all sectors of the rental market.

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