LONDON (Alliance News) - Vehicle hire company Northgate PLC on Tuesday said its pretax profit dipped in the first half due to weaker margins and a hit from the euro to its Spanish business, along with a change in revenue mix.
Northgate's pretax profit for the half to the end of October was GBP42.8 million, down from GBP46.9 million, as its gross margins deteriorated year-on-year and it was hit by higher vehicle depreciation rates and by the weakness of the euro.
Revenue for the half was up to GBP313.1 million from GBP305.0 million, with a fall in hire revenue offset by a rise in vehicle sales revenue, though this mix hit overall cost of sales, dragging on margins. Northgate's return on capital employed in the half dipped to 12.0% from 13.0% at the end of April.
The group will pay an interim dividend of 5.1 pence per share, up from 4.3p.
"Overall the group is trading in line with our expectations, despite a mixed trading backdrop in the first six months of the year, with some weakness in UK vehicles on hire being offset by a strong performance in Spain," said Northgate Chief Executive Bob Contreras.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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