Car hire giant Europcar wary on UK

Europcar Groupe is “cautious” about the British car rental market as it monitors developments in the UK’s negotiations to leave the EU, although it has yet to see any impact on its 2017 results.

“We confirm our 2017 guidance, with our cautious view on Britain,” chief executive Caroline Parot said of Europcar’s second biggest market.

Travel and tourism industry associations have been pushing to secure visa-free travel between Britain and the EU after Brexit to limit disruption to the industry. Europcar recently took full control of its Irish operations after buying out its Irish franchise business owners.

Britain’s vote last year to quit the bloc has already had an impact Europcar and Avis Budget Group which in the second-half of last year saw a negative impact from the pound’s slump following the EU referendum.

Kepler Cheuvreux analyst David Cerdan said if the UK economy deteriorates it will have an impact on the car rental market, as the UK is primarily a business market and corporations will hire cars less often.

Europcar reported a wider adjusted earnings before interest, taxation, depreciation and amortisation – Ebitda loss of €6.2m in the first quarter – hurt by additional investments in its digitalisation programme and losses incurred in its new mobility division. The company is targeting organic revenue growth of more than 3% and an increase in its adjusted Ebitda margin, excluding new mobility, for 2017.

Its shares, which were little changed, have climbed over 18% since the start of the year. The group also announced the acquisition of Danish franchisee, Europcar Denmark. This follows a number of deals in 2016 in countries, Italy, Spain, as well as here. The company is active in 10 countries across Europe. At the end of last year, the Irish franchisee said it was acquired by its Europcar its parent group for an estimated €26m.

With estimated revenues of €50m, Europcar Ireland was viewed as one of the group’s leading franchised operations.

Caroline Parot, chief executive officer, at Europcar Groupe said: “We start the year on a solid footing.

“Only four months after buying our Irish franchisee, we take yet another step in our dynamic acquisition plan, which not only strengthens our European leadership but also brings us a little closer to our 2020 ambition.”

Reuters and Irish Examiner staff