Darlington's Northgate Vehicle Hire report growing sales thanks to expansion

The North East-founded hire company reported positive trading across its UK and Spanish business

Northgate Vehicle Hire
Northgate Vehicle Hire

Darlington-based vehicle hire group Northgate plc has grown sales thanks to the opening of 11 new sites since February last year.

An interim management statement from the FTSE 250 company revealed the number of vehicles on hire had risen by 900 to 48,500 during the five month period to September 17.

The increase is in contrast to a 1,600 uplift across the same period last year.

Northgate, which operates sites throughout the UK and Spain, employing more than 2,000 people, attributed the growth to extra sales from its newest 11 outlets, opened since February 2013.

The average vehicles on hire in the period have been 10% higher than in the same period in the prior year, 4% being from the new sites and 6% from organic growth.

In June Northgate reported a 22% in underlying pre-tax profit to £60.3m from £49.5m, in 2013.

The results marked the reemergence of growth after five years of decline in both the UK and Spanish markets.

Expansion into Dublin, Watford, Enfield and Southall since April this year had all gone as planned, bringing the firm’s overall branch network o 72.

Within its Spanish market, Northgate reported a 1,800 increase in vehicles on hire throughout the period - bringing the total to 36,500. It represented a 10% increase on the year before.

Vehicle utilisation stood at 92% for the period after the Spanish fleet was increased to 39,900 vehicles overall.

Meanwhile, hire revenue per rented vehicle had fallen 1% in comparison to the last financial year.

Northgate said the reduction has been mitigated by an increasing number of customers operating our fleet in such a way that running costs are reduced and residual values are improved.

A statement to shareholders read: “The Group continues to see increasing returns and profitable growth in both the UK and Spain.

“The UK network expansion has proceeded as planned and we will continue to invest in new sites that provide the required levels of return.

“The Board remains confident that the business is well positioned to maximise further opportunities for growth and the Group continues to trade in line with our expectations.”

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