Avis Europe plc Interim Results for Six Months Ended 30 June 2002.Business Editors BRACKNELL Bracknell (brăk`nəl), city (1991 pop. 52,257), Bracknell Forest, S England. Bracknell was designated one of the new towns in 1949, in order to alleviate overpopulation in London. , England--(BUSINESS WIRE)--Sept. 3, 2002 Avis Avis: see Aviz, Portugal. Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). plc, the leading car rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. company in Europe, Africa,
the Middle East and Asia, today announced trading results for the six
months ended 30 June June: see month. 2002.Highlights - Revenue 5.8% lower at EUR558.3m (?.2m), with volume down 7.3% - Revenue per rental up 3.9% - Operating profit before goodwill amortisation EUR82.0m (?0m); 19.0% lower - Profit before tax(a) EUR51.5m (?1m), 22.4% lower - Earnings per share(a) EUR0.069 (4.3p), 20.7% lower - Interim dividend maintained at 2.0p per share (EUR0.032) Financial Highlights - Revenue 5.8% lower at EUR558.3m (?.2m), with volume down 7.3% - Revenue per rental up 3.9% - Operating profit before goodwill amortisation EUR82.0m (?0m); 19.0% lower - Profit before tax(a) EUR51.5m (?1m), 22.4% lower - Earnings per share(a) EUR0.069 (4.3p), 20.7% lower - Interim dividend maintained at 2.0p per share (EUR0.032) (a) before goodwill amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. and the 2001 exceptional item Commenting on the results, Chairman Sir Bob Reid said: "The change in expectations for the pace of economic recovery and the reductions in corporate spend towards the end of the second quarter impacted the rate of revenue recovery anticipated earlier this year. However, the flexibility of our cost base enabled us to substantially adjust fleet and staffing levels to the reduced demand, with fleet cost as a percent of revenue held flat during the period and the impact on overall margins contained. We have made progress with our post 11 September September: see month. development strategies and have secured a number of new pan-European partnerships which will help growth into the future. Revenue trends in the peak leisure months of July July: see month. and August have been in line with our revised expectations. We do not yet see tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. signs of corporate recovery and we continue to keep a tight rein on costs with fleet and staff levels continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. adjusted in response to demand. We expect our full year profit before exceptional items and goodwill amortisation to be in line with guidance given in our trading update in June." The interim report will be posted to shareholders on 12th September 2002. The financial statements are available on www.avis-europe.com from today. Results overview Revenue initially recovered in line with expectations during the first few months with leisure demand better than expected, but no visible improvement in the corporate market. However, this gradual The Gradual (Latin: graduale, sometimes called the Grail) is a chant in the extraordinary form of the Roman Catholic Mass, sung after the reading or singing of the Epistle and before the Alleluia, or, during penitential seasons, before the Tract. overall recovery was interrupted in·ter·rupt v. in·ter·rupt·ed, in·ter·rupt·ing, in·ter·rupts v.tr. 1. To break the continuity or uniformity of: Rain interrupted our baseball game. 2. by a further slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the corporate-related market towards the end of the second quarter as companies reacted to reduced economic growth and earnings expectations. Notably, the cutback cut·back n. 1. A decrease; a curtailment: "The political effects of food cutbacks could be devastating" New York Times. 2. in demand spilled over into the Replacement segment. Continued steady improvement in the Leisure segment limited the overall volume decline in the first six months to 7.3%. The flexibility of our operating cost structure allowed us to substantially adjust to the lower demand, with both average fleet and staffing reduced by 7%. We made good progress with ongoing strategies to contain rising fleet costs in the industry, resulting in no increase in fleet cost ratio to revenue versus the prior year period. We continued to achieve yield improvements with a 3.9% increase in revenue per rental, comprising an increase of 0.4% in rate per day and an average rental length increase of 3.5%. Revenue was 5.8% lower at EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 558.3m and operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. before goodwill amortisation reduced by 19.0% to EUR82.0m as a result of lower revenues and the impact over the short term of our network costs. Profit before tax, 2001 exceptional item and goodwill amortisation was 22.4% lower at EUR51.5m, with adjusted earnings per share 20.7% lower at EUR0.069 (4.3p). Dividend The Directors have declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. an interim dividend maintained at 2.0p per share for the six month period ended 30 June 2002. The dividend will be paid on 8 October October: see month. 2002 to shareholders on the register at close of business on 13 September 2002. Revenue development Within the four key customer segments, Leisure generated 35% of first half revenues, Corporate 25%, Replacement 20% and Premium 20%. Leisure focus supports airport and international recovery We have seen steady improvement in the Leisure segment which has benefited our southern European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets, notably Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , and has supported a gradual recovery in airport-generated revenues. At the same time, we have gained the exclusive contract for Thomas Cook For the company, see Thomas Cook AG. Thomas Cook (22 November 1808 – 18 July 1892) of Melbourne, Derbyshire, founded the travel agency that is now Thomas Cook AG. He was brought up as a strict Baptist and joined his local Temperance Society. Group's pan-European business with effect from 1st November November: see month. 2002, building on the success of our UK partnership. In addition, we have renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. our contract with MyTravel My Travel can refer to two related companies:
in full Deutsche Lufthansa AG One of Europe's largest air-passenger, cargo, and airline-services companies. The airline originated in 1926 as Deutsche Luft Hansa AG and eventually was flying to destinations in South America and Southeast Asia before . We have focused on rebuilding international inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound business with investment in new products and sales initiatives improving demand and generating pricing gains. US inbound rentals for the period were 11% down, compared to 31% year on year decline post 11 September, and were better than the market decline in transatlantic airline passenger arrivals of 15%. Revenue per rental was up 3%. Overall leisure revenues were 3% lower than prior year improving from a decline of 7% post 11 September to end 2001. Corporate travel cutbacks Corporate travel demand remained depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. as expected during the first quarter of 2002 which particularly affected our northern European markets - notably France, Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and the UK. However, this trend deteriorated towards the end of the second quarter with travel expenditures by European companies It may never be fully completed or, depending on its its nature, it may be that it can never be completed. However, new and revised entries in the list are always welcome. This is a list of companies from the countries in the European Union. even further constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. . In response, we have focused on maintaining market shares in this segment and have also achieved pricing gains during the period, despite the reduced levels of demand. Revenue per rental was up 8%, underpinned by the continued focus on yield improvement in Germany and the UK. We have also made investments in field and telesales telesales Noun the selling of a commodity or service by telephone telesales npl → televentas fpl telesales npl → activities in southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. to target small and medium sized enterprise business and these were particularly successful in Spain and Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the where we achieved double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. increases in corporate volume. Similar investments in Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. during the second quarter are expected to drive improvement in that market in the second half. Overall corporate revenues were 15% lower, compared to a decline of 9% post 11 September to end 2001. Replacement segment impacted by lower corporate spending Our Replacement business originates primarily from three sources: Corporate longer term, which represented 43% of revenue in this segment in the first six months, Insurance 31% and Leasing-related 26%. Corporate longer term business is a flexible monthly rental product often used by companies requiring vehicles for project teams based off-site off-site adj. Taking place or located away from the site, as of a particular activity: an off-site waste treatment operation. off or as a shorter term alternative to leased company car fleets. Cutbacks in company expenditure amongst some of our European customer base, particularly in the IT and telecommunications-related industries, impacted demand in this segment with revenue down 16%, in line with the overall trend in the Corporate segment. Insurance business comprises partnerships with roadside assistance companies as well as replacement vehicles for insurance company policy holders. Revenue in this segment was 5% lower, however excluding Germany, where current demand is reduced due to ongoing structural changes in the insurance-related market, volume grew by 10% with revenue up 8%. A new partnership with Europassistance in France is to be set up to take further advantage of growth opportunities in this segment. Leasing-related business comprises partnerships with a number of companies including pan-European deals with major leasing companies such as Leaseplan LeasePlan Corporation - a market company, established in 1963, Netherlands car leasing operator with a total fleet of approximately 130,000 vehicles. LeasePlan Corporation comprises an international network of companies engaged in all aspects of fleet and vehicle management. where we supply the associated short term rentals. Revenue was up 9% in the first half, primarily supported by additional business gains in Holland. Overall Replacement revenues were 7% lower, declining from a 3% increase post 11 September to end 2001. Yield improvements in all major markets The major markets of France, Spain, Italy, UK and Germany generated 82% of total revenue during the period. In France, revenue declined by 5%, with overall revenue per rental up 4% and volume growth in Leisure offset by the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the Corporate market. In Germany, the weak economic background persisted, against which we have continued our strategy to emphasise yield, achieving for instance a 10% increase in revenue per rental in the Corporate segment. Overall revenue trends stabilised Adj. 1. stabilised - made stable or firm stabilized stable - resistant to change of position or condition; "a stable ladder"; "a stable peace"; "a stable relationship"; "stable prices" at the post 11 September level and remained 16% down despite the second quarter downturn elsewhere. In Italy, revenue was 9% lower which is broadly similar to the level of reduction post 11 September. Corporate business was more stable in this market and we achieved an overall revenue per rental increase of 2%. In Spain, revenue grew 6%, with increases in all market segments, including double-digit revenue increases in Corporate and Replacement driven by local sales initiatives and account gains within the domestic market. These successes have been supported by continuing relative strength in the Leisure segment. In the UK, revenue was 13% lower, impacted by the decline in Corporate business. Leisure revenue strengthened ahead of prior year in the second quarter compared to a weaker period last year when travel within the UK was affected by foot and mouth related restrictions. Centrus developments Centrus revenue in half one was EUR20.2m, up 39% on prior year, as new account wins came on stream and the market consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: . The Association of British Insurers' (ABI Abi (ā`bī) [short for Abijah], in the Bible, King Hezekiah's mother. (Application Binary Interface) A specification for a specific hardware platform combined with the operating system. ) third party hire initiative has created initial implementation difficulties for both the insurers and Centrus. However we are working in cooperation with insurers to improve these processes. The detailed process of settlement of pre-ABI claims has progressed steadily but slowly with the major insurers. Continued tight management of fleet and staff costs The flexibility of our operating cost base allows us to substantially adjust for lower volumes and therefore to contain the impact of lower revenues on margins. Both average fleet and staffing were reduced by 7% compared to prior year with no one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. costs in the period. Fleet cost as a percentage of revenue remained flat against the comparative prior year period reflecting the success of our strategies to contain rising fleet costs in the industry. A 0.8% decline in utilisation resulting from the marked corporate slowdown at the end of the second quarter was offset by benefits from a number of ongoing initiatives to reduce fleet-related costs. Our vehicle sourcing strategy continued to generate benefits and we made additional improvements in detection and recovery of damage cost. We achieved savings in insurance costs from better claims experience and we also reduced overall maintenance costs in Germany, UK and Spain. Staff productivity was 3.1% lower than prior year against a rental decline of 10.4%. The flexibility of our operational staffing levels (which account for over 70% of total Group staff numbers) enabled rapid adjustment to volume changes through a number of actions, including early cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of casual and temporary contracts ahead of Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it and summer peaks. Adjustments to staffing levels restricted the staff cost impact on margin to 0.7%. Operations' average FTE FTE Full-Time Equivalent FTE Full-Time Employee FTE Full-Time Equivalency FTE Full Time Employment FTE Foundation for Teaching Economics FTE Full Time Enrollment FTE For the Enterprise (SQL) FTE Fund for Theological Education (full time equivalent staff member) was reduced by 9% compared to prior year, the Group's sales teams (8% of staff numbers) were retained at prior year levels to ensure appropriate focus on post 11 September revenue development priorities and support FTE (20% of staff numbers) which are somewhat less flexible in the short term, were reduced by 4%. Following a further review of these support costs across the Group, we are now realigning a number of activities to generate further savings. As a result, we are aiming to reduce our management and support positions across Europe by an additional 150-175, with estimated annualised savings of EUR10m and exceptional one-off costs generating a one year payback Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money. . Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: reduced by impact of network-related overheads Operating profit before goodwill amortisation was EUR82.0m, 19.0% lower than the same period last year. Operating margins were 2.4 percentage points down, impacted by a 1.5 percentage points deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in overhead margin. This is primarily related to network costs, e.g. rent and depreciation of rental locations and communication costs which are less flexible in the short term and represent 70% of Avis' overheads. Lower interest expense and effective tax rate of 22% Average net debt was EUR101m lower with net interest expense down 14.6% in line with lower fleet and a reduction in the average interest rate from 5.5% to 5.1%. As communicated in our full year results the effective tax rate has been reduced to 22% compared to 24% in the first half of last year. Revenue development strategies We continued to focus on our revenue development priorities, as communicated at the time of our 2001 results, successfully developing business in markets less affected by 11 September and rebuilding leisure business, both transatlantic and within Europe. The new pan-European partnership arrangements secured with Thomas Cook and MyTravel provide a platform for further penetration The successful unauthorized breach of a security perimeter. See penetration test. of the leisure market over the next 2-3 years. Investment in enhancing our internet sites generated over 200,000 bookings with reservations through this channel currently tracking at 8% of total reservations. New partnerships secured with e-bookers and Expedia, two of Europe's largest internet-based travel companies, further underpin our presence in the online market. We continue our geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. expansion into Asia for the long term growth of the Group and anticipate that the joint venture for China will be operational from November, once final regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval is received. Summary and Outlook The change in expectations for the pace of economic recovery and the reductions in corporate spend towards the end of the second quarter impacted the rate of revenue recovery anticipated earlier this year. However, the flexibility of our cost base enabled us to substantially adjust fleet and staffing levels to the reduced demand, with fleet cost as a percent of revenue held flat during the period and the impact on overall margins contained. We have made progress with our post 11 September development strategies and have secured a number of new pan-European partnerships which will help growth into the future. Revenue trends in the peak leisure months of July and August have been in line with our revised expectations. We do not yet see tangible signs of corporate recovery and we continue to keep a tight rein on costs with fleet and staff levels continually adjusted in response to demand. We expect our full year profit before exceptional items and goodwill amortisation to be in line with guidance given in our trading update in June."
Consolidated Profit and Loss Account
Six months Six months Six months
to 30 June to 30 June to 30 June
2002 2002 2002
Notes $'000 EUR'000 (pound)'000
----------------------------------------------------------------------
Revenue 497,388 558,275 345,175
Cost of sales (244,646) (274,594) (169,716)
----------------------------------------------------------------------
Gross profit 252,742 283,681 175,459
Administrative expenses (181,468) (203,682) (125,739)
----------------------------------------------------------------------
Operating profit before
goodwill amortisation 73,074 82,019 50,968
Amortisation of goodwill (1,800) (2,020) (1,248)
Exceptional item - - -
Operating profit 71,274 79,999 49,720
Share of operating loss
from joint ventures (636) (714) (440)
Share of operating loss
from associated undertaking - - -
Interest payable and
similar charges (net) (26,546) (29,796) (18,413)
----------------------------------------------------------------------
Profit on ordinary activities
before taxation, goodwill
amortisation
and exceptional item 45,892 51,509 32,115
Amortisation of goodwill (1,800) (2,020) (1,248)
Exceptional item 3 - - -
Profit on ordinary activities
before taxation 44,092 49,489 30,867
Taxation (9,702) (10,889) (6,791)
----------------------------------------------------------------------
Profit on ordinary activities
after taxation 34,390 38,600 24,076
Minority interests
- equity (58) (66) (41)
----------------------------------------------------------------------
Profit for the period before
goodwill amortisation
and exceptional item 36,132 40,554 25,283
Amortisation of goodwill (1,800) (2,020) (1,248)
Exceptional item - - -
Profit for the period 34,332 38,534 24,035
Dividends 4 (16,534) (18,558) (11,723)
----------------------------------------------------------------------
Retained profit for
the period 17,798 19,976 12,312
----------------------------------------------------------------------
Earnings per share 5
Basic 5.9c EUR 0.066 4.11p
----------------------------------------------------------------------
Diluted 5.9c EUR 0.066 4.11p
----------------------------------------------------------------------
Adjusted 6.1c EUR 0.069 4.33p
----------------------------------------------------------------------
Six months Six months Six months
to 30 June to 30 June 30 June
2001 2001 2001
Notes $'000 EUR'000 (pound)'000
-----------------------------------------------------------------------
Revenue 505,525 1 592,438 1 370,279
Cost of sales (248,179) 1 (290,847) 1 (181,825)
-----------------------------------------------------------------------
Gross profit 257,346 301,591 188,454
Administrative expenses (172,631) (202,311) (126,608)
-----------------------------------------------------------------------
Operating profit before
goodwill amortisation 86,405 101,261 63,085
Amortisation of goodwill (1,690) (1,981) (1,239)
Exceptional item
Operating profit 84,715 99,280 61,846
Share of operating loss
from joint ventures (3,043) (3,566) (2,208)
Share of operating loss
from associated undertaking - - -
Interest payable and
similar charges (net) (29,762) (34,879) (21,806)
-----------------------------------------------------------------------
Profit on ordinary activities
before taxation, goodwill
amortisation
and exceptional item 56,643 66,382 41,279
Amortisation of goodwill (1,690) (1,981) (1,239)
Exceptional item 3 (3,043) (3,566) (2,208)
Profit on ordinary activities
before taxation 51,910 60,835 37,832
Taxation (12,451) (14,592) (9,078)
-----------------------------------------------------------------------
Profit on ordinary activities
after taxation 39,459 46,243 28,754
Minority interests
- equity (113) (132) (82)
-----------------------------------------------------------------------
Profit for the period before
goodwill amortisation
and exceptional item 43,349 50,802 31,588
Amortisation of goodwill (1,690) (1,981) (1,239)
Exceptional item (2,313) (2,710) (1,677)
Profit for the period 39,346 46,111 28,672
Dividends 4 (16,204) (18,990) (11,697)
----------------------------------------------------------------------
Retained profit for
the period 23,142 27,121 16,975
----------------------------------------------------------------------
Earnings per share 5
Basic 6.7c EUR 0.079 4.91p
----------------------------------------------------------------------
Diluted 6.7c EUR 0.079 4.90p
----------------------------------------------------------------------
Adjusted 7.4c EUR 0.087 5.41p
----------------------------------------------------------------------
1 Restated (see note 1)
Consolidated Statement of Total Recognised Gains and Losses
Six months Six months Six months
to 30 June to 30 June to 30 June
2002 2002 2002
$'000 EUR'000 (pound)'000
----------------------------------------------------------------------
Profit for the year 34,332 38,534 24,035
Exchange adjustments (5,450) (6,117) (1,694)
Taxation on exchange
adjustments 2,113 2,372 1,462
----------------------------------------------------------------------
Total recognised gains
and losses 30,995 34,789 23,803
----------------------------------------------------------------------
Six months Six months Six months
to 30 June to 30 June to 30 June
2001 2001 2001
$'000 EUR'000 (pound)'000
----------------------------------------------------------------------
Profit for the year 39,346 46,111 28,672
Exchange adjustments 1,239 1,452 477
Taxation on exchange
adjustments (276) (324) (266)
----------------------------------------------------------------------
Total recognised gains
and losses 40,309 47,239 28,883
----------------------------------------------------------------------
US Dollar equivalents are provided for reader convenience at the 2002
average rate of $0.8909 = 1 euro (June 30, 2001 rate of $0.8533 = 1
euro)
Consolidated Balance Sheet
At 30 June At 30 June At 30 June
2002 2002 2002
$'000 EUR'000 (pound)'000
----------------------------------------------------------------------
Intangible fixed assets
Goodwill 59,499 66,783 42,683
----------------------------------------------------------------------
Tangible fixed assets
- vehicles 1,366,427 1,533,697 980,235
- other 66,516 74,659 47,718
----------------------------------------------------------------------
1,432,943 1,608,356 1,027,953
Investments 4,260 4,781 3,056
----------------------------------------------------------------------
1,437,203 1,613,137 1,031,009
----------------------------------------------------------------------
Total fixed assets 1,496,702 1,679,920 1,073,692
Current assets
Debtors 585,749 657,453 420,200
Investments 84,826 95,210 60,852
Cash at bank 16,916 18,987 12,135
----------------------------------------------------------------------
687,491 771,650 493,187
----------------------------------------------------------------------
Creditors amounts falling
due within one year
Bank and other loans (595,064) (667,908) (426,882)
Other creditors (1,105,187) (1,240,479) (792,831)
----------------------------------------------------------------------
(1,700,251) (1,908,387) (1,219,713)
----------------------------------------------------------------------
Net current liabilities (1,012,760) (1,136,737) (726,526)
----------------------------------------------------------------------
Total assets less current
liabilities 483,942 543,183 347,166
Creditors amounts falling
due after more than one year
Bank and other loans (286,804) (321,913) (205,745)
Other creditors (31,420) (35,266) (22,540)
----------------------------------------------------------------------
(318,224) (357,179) (228,285)
Provisions for liabilities
and charges (74,123) (83,197) (53,174)
----------------------------------------------------------------------
91,595 102,807 65,707
----------------------------------------------------------------------
Capital and reserves
Called-up share capital 7,201 8,083 5,858
Share premium 780,412 875,945 634,732
Profit and loss account (696,485) (781,745) (575,218)
----------------------------------------------------------------------
Total shareholders' funds
- equity 91,128 102,283 65,372
Minority interests
- equity 467 524 335
----------------------------------------------------------------------
91,595 102,807 65,707
----------------------------------------------------------------------
At 30 June At 30 June At 30 June
2001 2001 2001
$'000 EUR'000 (pound)'000
----------------------------------------------------------------------
Intangible fixed assets
Goodwill 61,121 71,629 43,697
----------------------------------------------------------------------
Tangible fixed assets
- vehicles 1,434,630 1,681,280 1,025,657
- other 58,742 68,841 41,997
----------------------------------------------------------------------
1,493,372 1,750,121 1,067,654
Investments 2,754 3,228 1,969
----------------------------------------------------------------------
1,496,126 1,753,349 1,069,623
----------------------------------------------------------------------
Total fixed assets 1,557,247 1,824,978 1,113,320
Current assets
Debtors 573,288 671,851 409,860
Investments 423 496 303
Cash at bank 34,117 39,983 24,391
----------------------------------------------------------------------
607,828 712,330 434,554
----------------------------------------------------------------------
Creditors amounts falling
due within one year
Bank and other loans (670,803) (786,131) (479,576)
Other creditors (1,082,135) (1,268,183) (773,652)
----------------------------------------------------------------------
(1,752,938) (2,054,314) (1,253,228)
----------------------------------------------------------------------
Net current liabilities (1,145,110) (1,341,984) (818,674)
----------------------------------------------------------------------
Total assets less current
liabilities 412,137 482,994 294,646
Creditors amounts falling
due after more than one year
Bank and other loans (252,363) (295,751) (180,422)
Other creditors (35,255) (41,316) (25,205)
----------------------------------------------------------------------
(287,618) (337,067) (205,627)
Provisions for liabilities
and charges (69,777) (81,774) (49,886)
----------------------------------------------------------------------
54,742 64,153 39,133
----------------------------------------------------------------------
Capital and reserves
Called-up share capital 6,884 8,067 5,848
Share premium 745,461 873,625 633,297
Profit and loss account (698,205) (818,245) (600,442)
----------------------------------------------------------------------
Total shareholders' funds
- equity 54,140 63,447 38,703
Minority interests
- equity 602 706 430
----------------------------------------------------------------------
54,742 64,153 39,133
----------------------------------------------------------------------
US Dollar equivalents are provided for reader convenience at the 2002
average rate of $0.8909 = 1 euro (June 30, 2001 rate of $0.8533 = 1
euro)
Consolidated Cash Flow Statement
Six months Six months Six months
to 30 June to 30 June to 30 June
2002 2002 2002
$'000 EUR'000 (pound)'000
----------------------------------------------------------------------
Net cash inflow from
operating activities 301,662 338,590 207,403
----------------------------------------------------------------------
Returns on investments and
servicing of finance
Interest received 1,336 1,500 928
Interest paid (22,229) (24,950) (15,429)
Interest element of finance
lease rental payments (5,144) (5,774) (3,569)
Dividend paid to minority
interests (178) (200) (126)
----------------------------------------------------------------------
(26,215) (29,424) (18,196)
----------------------------------------------------------------------
Taxation 4,191 4,704 2,843
----------------------------------------------------------------------
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (829,779) (931,356) (575,336)
Sale of tangible fixed
assets 868,302 974,595 602,057
Sale of fixed asset
investments - - -
----------------------------------------------------------------------
38,523 43,239 26,721
----------------------------------------------------------------------
Equity dividends paid (32,306) (36,261) (22,231)
----------------------------------------------------------------------
Management of liquid
resources
(Purchase) / sale of current
asset investments (84,420) (94,753) (58,920)
Cash (transferred to) /
withdrawn from short term
deposit (1,064) (1,195) (738)
----------------------------------------------------------------------
(85,484) (95,948) (59,658)
----------------------------------------------------------------------
Financing
Issue of ordinary share
capital 1,352 1,517 937
Repayment of capital element
of finance leases (339,223) (380,749) (235,204)
Increase in short term loans 211,952 237,899 156,024
Decrease in long term loans (77,308) (86,772) (60,701)
----------------------------------------------------------------------
(203,227) (228,105) (138,944)
----------------------------------------------------------------------
(Decrease) / increase in cash (2,856) (3,205) (2,062)
----------------------------------------------------------------------
Six months Six months Six months
to 30 June to 30 June to 30 June
2001 2001 2001
$'000 EUR'000 (pound)'000
-----------------------------------------
Net cash inflow from
operating activities 455,233 533,500 333,208
-----------------------------------------------------------------------
Returns on investments and
servicing of finance
Interest received 1,506 1,764 1,097
Interest paid (27,736) (32,504) (20,126)
Interest element of finance
lease rental payments (6,754) (7,915) (4,955)
Dividend paid to minority
interests - - -
-----------------------------------------------------------------------
(32,984) (38,655) (23,984)
-----------------------------------------------------------------------
Taxation (7,501) (8,791) (5,317)
-----------------------------------------------------------------------
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (1,128,650) (1,322,694) (827,712)
Sale of tangible fixed
assets 929,631 1,089,459 681,605
Sale of fixed asset
investments 44 51 31
-----------------------------------------------------------------------
(198,975) (233,184) (146,076)
-----------------------------------------------------------------------
Equity dividends paid (30,560) (35,814) (22,220)
-----------------------------------------------------------------------
Management of liquid
resources
(Purchase) / sale of current
asset investments 2,845 3,334 2,037
Cash (transferred to) /
withdrawn from short term
deposit 8,788 10,299 6,441
-----------------------------------------------------------------------
11,633 13,633 8,478
-----------------------------------------------------------------------
Financing
Issue of ordinary share
capital 166 194 121
Repayment of capital element
of finance leases (327,117) (383,357) (240,513)
Increase in short term loans 232,797 272,821 172,184
Decrease in long term loans (89,835) (105,280) (66,092)
-----------------------------------------------------------------------
(183,989) (215,622) (134,300)
-----------------------------------------------------------------------
(Decrease) / increase in cash 12,857 15,067 9,789
-----------------------------------------------------------------------
US Dollar equivalents are provided for reader convenience at the 2002
average rate of $0.8909 = 1 euro (June 30, 2001 rate of $0.8533 = 1
euro)
Notes to the financial statements
For the six month period ended 30 June 2002
1 Basis of preparation
----------------------------------------------------------------------
The interim financial statements are unaudited and do not constitute
statutory accounts within the meaning of section 240 of the Companies
Act 1985. They have been prepared on the basis of the accounting
policies set out in the Group's 2001 Annual Report and Accounts,
except for the adoption in the period of FRS 19, Deferred Taxation,
which had no material impact on the financial statements.
The statutory accounts for the year ended 31 December 2001 have been
delivered to the Registrar of Companies and carry an audit report
which was unqualified and did not contain a statement under either
Section 237(2) or 237(3) of the Companies Act 1985.
2 Revenue
----------------------------------------------------------------------
As described in the Group's 2001 Annual Report and Accounts, there was
a change in 2001 to the way in which credit repair revenue was
recognised. As a consequence of the change in accounting policy,
United Kingdom revenue and cost of sales for the six month period
ended 30 June 2001 have been reduced by $10,803,000 (EUR12,125,000;
(pound)7,578,000). The restatement has had no impact upon gross
profit.
Six months to Six months to Six months to
30 June 30 June 30 June
2002 2002 2002
3 Exceptional item $'000 EUR '000 (pound)'000
----------------------------------------------------------------------
Share of joint
venture losses - - -
----------------------------------------------------------------------
Six months to Six months to Six months to
30 June 30 June 30 June
2001 2001 2001
$'000 EUR '000 (pound)'000
----------------------------------------------------------------------
Share of joint
venture losses 3043 3566 2208
----------------------------------------------------------------------
The share of joint venture losses incurred in the prior year related
to the Group's investment in yourautochoice.com Limited. During the
previous year, the Group restructured its interest in this joint
venture. As a consequence, the Group recorded a loss to reflect the
write-down of the investment which, along with the result for the
period, was treated as an exceptional item.
Six months to Six months to Six months to
30 June 30 June 30 June
2002 2002 2002
4 Dividends $ EUR (pound)
----------------------------------------------------------------------
Dividend per
ordinary share
Interim dividend 0.028 0.032 0.020
----------------------------------------------------------------------
2002 2002 2002
$'000 EUR '000 (pound) '000
Interim dividend 16,534 18,558 11,723
----------------------------------------------------------------------
Six months to Six months to Six months to
30 June 30 June 30 June
2001 2001 2001
4 Dividends $ EUR (pound)
----------------------------------------------------------------------
Dividend per
ordinary share
Interim dividend 0.027 0.032 0.020
----------------------------------------------------------------------
2001 2001 2001
$'000 EUR '000 (pound)'000
----------------------------------------------------------------------
Interim dividend 16,204 18,990 11,697
----------------------------------------------------------------------
5 Earnings per share
----------------------------------------------------------------------
The calculation of basic earnings per share is based on the profit for
the period and on the weighted average number of shares in issue
during the period. An adjusted calculation has been prepared, adding
back the impact of both exceptional items and goodwill amortisation,
since, in the opinion of the Directors, this gives a more consistent
measure of performance.
Six months to 30 June
2002
-----------------------------------------
Profit Weighted Earnings
$ average per
'000 number share $
----------------------------------------------------------------------
Profit, number of shares
and basic earnings per
share 34,332 584,334,424 0.059
Adjustment re possible
issue of shares under
option - 1,001,944 -
----------------------------------------------------------------------
Adjusted profit, number
of shares and diluted
earnings per share 34,332 585,336,368 0.059
----------------------------------------------------------------------
Profit, number of shares
and basic earnings per
share 34,332 584,334,424 0.059
Amortisation of goodwill 1,800 - 0.003
Exceptional items - - -
Taxation on adjusting items - - -
----------------------------------------------------------------------
Adjusted profit pre goodwill
and exceptional item,
number of shares and
adjusted earnings per share 36,132 584,334,424 0.062
----------------------------------------------------------------------
Six months to 30 June
2001
-----------------------------------------
Profit Weighted Earnings
$ average per
'000 number share $
----------------------------------------------------------------------
Profit, number of shares
and basic earnings per
share 39,346 583,819,166 0.067
Adjustment re possible
issue of shares under
option - 1,034,754 -
----------------------------------------------------------------------
Adjusted profit, number
of shares and diluted
earnings per share 39,346 584,853,920 0.067
----------------------------------------------------------------------
Profit, number of shares
and basic earnings per
share 39,346 583,819,166 0.067
----------------------------------------------------------------------
Amortisation of goodwill 1,690 - 0.003
Exceptional items 3,043 - 0.005
Taxation on adjusting items (730) - (0.001)
----------------------------------------------------------------------
Adjusted profit pre goodwill
and exceptional item,
number of shares and
adjusted earnings per share 43,349 583,819,166 0.074
----------------------------------------------------------------------
Six months to 30 June
2002
-----------------------------------------
Profit Weighted Earnings
EUR average per
'000 number share EUR
----------------------------------------------------------------------
Profit, number of shares
and basic earnings per
share 38,534 584,334,424 0.066
Adjustment re possible
issue of shares under
option - 1,001,944 -
----------------------------------------------------------------------
Adjusted profit, number
of shares and diluted
earnings per share 38,534 585,336,368 0.066
----------------------------------------------------------------------
Profit, number of shares
and basic earnings
per share 38,534 584,334,424 0.066
Amortisation of goodwill 2,020 - 0.003
Exceptional items - - -
Taxation on adjusting items - - -
----------------------------------------------------------------------
Adjusted profit pre goodwill
and exceptional item,
number of shares and adjusted
earnings per share 40,554 584,334,424 0.069
----------------------------------------------------------------------
Six months to 30 June
2001
-----------------------------------------
Profit Weighted Earnings
EUR average per
'000 number share EUR
----------------------------------------------------------------------
Profit, number of shares
and basic earnings
per share 46,111 583,819,166 0.079
Adjustment re possible
issue of shares under
option - 1,034,754 -
----------------------------------------------------------------------
Adjusted profit, number
of shares and diluted
earnings per share 46,111 584,853,920 0.079
----------------------------------------------------------------------
Profit, number of shares
and basic earnings
per share 46,111 583,819,166 0.079
Amortisation of goodwill 1,981 - 0.003
Exceptional items 3,566 - 0.006
Taxation on adjusting items (856) - (0.001)
----------------------------------------------------------------------
Adjusted profit pre
goodwill and exceptional
item, number of shares
and adjusted earnings
per share 50,802 583,819,166 0.087
----------------------------------------------------------------------
5 Earnings per share (continued)
----------------------------------------------------------------------
Six months to 30 June
2002
----------------------------------------
Profit Weighted Earnings
(pound) average per
'000 number share p
----------------------------------------------------------------------
Profit, number of
shares and basic
earnings per share 24,035 584,334,424 4.11
Adjustment re possible
issue of shares under
option - 1,001,944 -
----------------------------------------------------------------------
Adjusted profit, number
of shares and diluted
earnings per share 24,035 585,336,368 4.11
----------------------------------------------------------------------
Profit, number of shares
and basic earnings per
share 24,035 584,334,424 4.11
Amortisation of goodwill 1,248 - 0.22
Exceptional items - - -
Taxation on adjusting items - - -
----------------------------------------------------------------------
Adjusted profit pre
goodwill and exceptional
item, number of shares
and adjusted earning
per share 25,283 584,334,424 4.33
----------------------------------------------------------------------
Six months to 30 June
2001
----------------------------------------
Profit Weighted Earnings
(pound) average per
'000 number share p
----------------------------------------------------------------------
Profit, number of
shares and basic
earnings per share 28,672 583,819,166 4.91
Adjustment re possible
issue of shares under
option - 1,034,754 (0.01)
----------------------------------------------------------------------
Adjusted profit, number
of shares and diluted
earnings per share 28,672 584,853,920 4.90
----------------------------------------------------------------------
Profit, number of shares
and basic earnings
per share 28,672 583,819,166 4.91
Amortisation of goodwill 1,239 - 0.21
Exceptional items 2,208 - 0.38
Taxation on adjusting items (552) - (0.09)
----------------------------------------------------------------------
Adjusted profit pre
goodwill and
exceptional item, number
of shares and adjusted
earning per share 31,567 583,819,166 5.41
----------------------------------------------------------------------
The Group has granted options to Directors and employees over ordinary
shares of Avis Europe plc and such shares constitute the only category
of dilutive potential ordinary shares of Avis Europe plc.
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