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


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