Profits at Avis Europe fell almost two-thirds in the first half as the car rental group was hit by restructuring charges and the cost of a share issue.
However, Murray Hennessy, chief executive, said there were “very initial signs” that a recovery programme, which began in December, was taking effect.
Vehicle utilisation, internet bookings and customer satisfaction had improved, he said, but added: “We’re in that awkward moment when we’re waiting to see more of it kick-in in the second half.”
The group’s pre-tax profit was €3.2m ($4m) for the six months to June 30, compared with €9m for the same period in 2004. Avis booked a €7.9m restructuring charge, and earnings per share were €0.04, down from €0.12.
Mr Hennessy said the recovery programme was progressing and the full-year outlook was unchanged. The company confirmed in May there would be no full-year dividend for the second consecutive year.
Trade for the six months to June 30 was lacklustre, with revenues falling 0.6 per cent to €582m, despite a 1.4 per cent increase in billed days. Small rises in the leisure and budget corporate segments were offset by declines in the premium and corporate markets.
Avis Europe has issued a series of profit warnings and has seen its share price lose three-quarters of its value over the past five years, as margins have been squeezed by cheaper internet bookings and smaller competitors.