Avis alert as firms stay away

THE corporate travel sector was rocked today as car rental group Avis Europe said the failure of businessmen and women to take to the road will hit profits for the second year running.

The profits warning, which follows an upbeat assessment from the company earlier this year, took the share price to its lowest for seven and half months, down 32 3/4p to 140p. The shares had bottomed at 103p last autumn after the 11 September terrorist attacks on the US but had recently been bid up as high as 217p.

Avis said today that it expected underlying pre-tax profits to fall by up to 15% in the year to the end of 2002. That would take profits down to e122m (£78m) - which is 30%, or more than e50m, lower than the results for 2000.

That had chief executive Mark McCafferty eating humble pie after he had said at Avis's preliminary results in February that he expected demand from the corporate sector to return in the second half of this year. In a trading statement ahead of the close of its half year at the end of this month, Avis said: 'There was no recovery in the corporate sector during the first quarter and we have now seen further weakness towards the end of the second quarter.' McCafferty added: 'We are just not seeing the return of corporate spending in the key France, Germany and UK markets.'