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Avis shares drop as profits slide

Car rental group Avis Europe has seen profits drop by almost a quarter during the first half of 2004 and warned that earnings will stay under pressure.

Competition has increased as consumers use the internet and rental brokers to shop around for the best deals.

Demand, meanwhile, is proving slow to pick up after many tourists put off travel plans because of the September 11 attacks and the war in Iraq.

Avis said it does not expect conditions to improve this year and remained cautious about its prospects for 2005.

Pre-tax profit was €10.6m (£7.2m) in the six months to the end of June 30, 24% lower than the €13.9m profit made during the same period a year earlier.

Sales did see a slight improvement, increasing by 3.9% to €548m.

"We continue to expect only limited pricing improvement and more modest growth in demand in the balance of the year," the company said in a statement.

"Overall, our early view for 2005 is that market conditions will remain difficult and therefore we expect our underlying trading performance will be broadly similar to this year." Source: bbc.co.uk

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