19th Mar 2008 07:01
Northgate PLC19 March 2008 19 March 2008 NORTHGATE PLC INTERIM MANAGEMENT STATEMENT Northgate plc ("Northgate", the "Company" or the "Group"), the UK and Spain'sleading specialist in light commercial vehicle hire, publishes its InterimManagement Statement covering the period 1 November 2007 to 18 March 2008. The Group remains on track to achieve its financial objectives for the currentyear. Philip Rogerson, Chairman, said: "We continue to make good progress against the targets set out in our strategicplan and expect the outcome for the year to be in line with current marketexpectations." UK The continuation of good utilisation levels, with a relatively stable hire rateenvironment and strong residual values, are contributing to an operating marginin line with the prior year. As in previous years, the fleet declined in Januarydue to a tightening of utilisation following the Christmas holiday period.Growth has resumed and we anticipate that, by the end of the financial year, wewill be close to our target fleet size. Spain The fleet in Spain continues to grow, with our expectation being that fleetgrowth for the year will be around 12%. Residual values have been lower than in the first six months and development ofour structure for used vehicle disposals remains a priority. Planned activitiesinclude creating new sales channels in Spain and an export capability. Our other key performance indicators, including utilisation and hire rates, arebroadly in line with our objectives and have produced an improvement in theoperating margin over the prior year. New Territories Talks continue to progress with a select number of target companies incontinental Europe, generally of individually small size. Whilst we do notexpect that a transaction will be effected by the end of the financial year on30 April 2008, we hope to be in a position to report progress within the nextfew months. Treasury As at 29 February, net debt has increased to £865m principally due to theexchange rate movement on our euro debt. With facilities of £1,080m, we havesignificant headroom both to finance the needs of the existing business, and forfuture expansion. The proportion of the Group's net debt with fixed interest rates at 29 February2008 was 67%, similar to the position at 31 October 2007. Outlook Our markets in the UK and Spain remain satisfactory and our local intelligencecurrently does not give any suggestion of material change. We remain confidentthat our proven business model has the flexibility to react quickly andeffectively to any change in market conditions. We continue to make good progress and expect our financial results for the yearto be in line with current market expectations. For further information, please contact: Northgate plc 01325 467558Steve Smith, Chief Executive Hogarth Partnership Limited 020 7357 9477Andrew JaquesBarnaby FryAnthony Arthur Notes to Editors: Northgate plc rents light commercial vehicles and sells a range of fleetproducts to businesses via a network of hire companies in the UK, Republic ofIreland and Spain. Its NORFLEX product gives businesses access to a flexiblemethod to acquire as many commercial vehicles as they need, without tying upcapital or entering a fixed term contract. Further information regarding Northgate plc can be found on the Company'swebsite: http://www.northgateplc.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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