13th Mar 2014 10:19
LONDON (Alliance News) - Northgate PLC said Thursday it remains in a strong financial position and is trading in line with expectations, recording steady results for its UK interests while business in Spain saw some retraction.
The commercial vehicle rental company said it continued to see growth in vehicles on hire in the UK, as the Spanish market showed signs of stabilisation, in an interim management statement for the period November 1, 2013 to March 12, 2014.
In the UK, Northgate said vehicles on hire during the period rose 1,100 to 47,000 from 45,900 at October 31, 2013, compared to a reduction of 900 for the comparable period last year. Vehicles on hire in the UK have risen by 9% or 3,900 since April 30, 2013.
While experiencing its usual seasonal impact, Northgate said that this was reduced in comparison to last year, with vehicles on hire between October 31, 2013 and December 31, 2013 falling from 45,900 to 43,900. This reduction of 2,000 compares to a reduction of 2,900 in the same period last year.
The firm said the increase in vehicles on hire since October 31 last year includes growth of 600 vehicles from the six sites opened since February 2013, ahead of its expectations. Northgate said it is now expecting to open a further four to six sites in the London area in the next six months.
Vehicle utilisation in the period to March 12, 2014 has averaged 87%, compared to 88% in the same period in the prior year, said the company, with fleet size increasing from 52,800 at October 31, 2013 to 53,200. Utilisation returned to 88% in February and continues to improve.
In Spain, Northgate said the number of vehicles on hire declined by 500 during the period, to 32,800 as of March 12, 2014, down from 33,300 October 31, 2013, compared to a drop of 800 last year. Vehicles on hire have risen by 700, or 2% since April 20, 2013.
The Spanish business also saw a seasonal impact, as vehicles on hire fell by 1,300 to 32,00 at December 31, 2013 in comparison to a reduction of 500 in the comparable period last year, "partly driven by increased seasonal demand seen in the summer and autumn period this year," said the firm.
Vehicle utilisation averaged 91% during the reporting period, marginally up from the 89% recorded for the comparable period last year. Northgate notes that the fleet has decreased by 600 since October 31, 2013 to 35,900.
Looking ahead, the company said it is encouraged by its UK growth and the signs of stabilisation in Spain, and adds, "The growth from the new sites opened is ahead of our expectations and we will continue to invest in new sites that provide the required levels of return."
Northgate said it continues to trade in line with expectations and the strong financial position of the group remains unchanged.
Shares in the firm dropped in morning trading, with Northgate sitting as the biggest faller on the FTSE 250, down 6.26% at 546.6 pence per share Thursday.
By Alice Attwood; [email protected]; @AliceAtAlliance
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