A determined new strategy focus has paid off for Northgate plc, the UK and Spain’s leading specialist in light commercial vehicle hire.
Interim results for six months ended October 31, 2013, show the Darlington-headquartered company boosted profit before tax by 12% compared to 2012, going from £24.6m to £27.4m.
During the same period, basic earnings per share went from 13.1p to 15.7p, while net debt decreased 2% to £370.4m. The group’s interim dividend, meanwhile, was 3.2p per share, compared to 1.3p in 2012.
Northgate chairman Bob Mackenzie said: “We are pleased to see the growth achieved in the first six months of the year, following the investment that has been made in our people, systems and network.
“The board remains confident that we will continue to build on this platform for growth. The group continues to trade in line with our expectations.”
Northgate plc is the leading light commercial vehicle hire business in the UK, Ireland and Spain by fleet size and has been operating in the sector since 1981.
In the UK, the group’s primary focus has been on growing business through its existing network and by adding new sites.
Since April 2013, it has opened two new sites and has three more planned by April 2014.
The company also increased the number of vehicles on hire in the UK by 2,800 since February, compared to a reduction of 1,400 in the same period in 2012.
In Spain, the company said, trading conditions remained difficult. Despite this, its operating margin decreased only slightly to 16.6% in the period, compared to 16.8% in 2012.
The fleet size in the Spanish operation, meanwhile, increased from 35,100 at April 30, 2013, to 36,500 at October 31, and the number of vehicles on hire grew by 1,200.
The report said: “It is pleasing to see that the continued efforts in the commercial area of the business have led to the stabilisation of the number of vehicles on hire after five years of decline. It is also encouraging to see that customer numbers have increased by 9% since April 30, 2013.”
Northgate’s group finance director Chris Muir said: “We are encouraged by the results. In the last five years, neither the UK nor Spain have seen much growth, but for the past two or three years we have been changing how the business operates, and it is encouraging to see the progress that has been made in the last six months.”
He added that the group wished to add a further 20 sites within the next two or three years.