LONDON (Alliance News) - Northgate PLC on Tuesday said its full year results were in line with expectations against a "mixed trading backdrop" in the UK and Spain and it raised its full year dividend by 10%.
The vehicle hire company said its pretax profit dipped to GBP77.6 million for the year ended April 30, from GBP83.0 million a year earlier, despite a rise in revenue to GBP618.3 million from GBP614.3 million, after it was hit by a weakening of the euro and changes in vehicle depreciation rates.
The weakened euro across the year reduced pretax profit by GBP1.7 million compared to the prior year, Northgate said, whilst it took a GBP3.7 million hit due to changed to deprecation rates.
Northgate said it strengthened its management team in the UK during the year, though noted that its average vehicles on hire came in 3.0% lower than a year earlier and closing vehicles on hire stood at 45,700 from 48,600 a year earlier, after it decided to reduce the number of vehicles rented to non-business users in order to improve returns. Average hire revenue per vehicle rose 2.0% from a year earlier.
In its Spanish division, the number of closing vehicles on hire rose to 35,700 from 35,600 a year earlier, and average hire revenue per vehicle rose 1.0%.
Northgate declared a dividend for the full year of 16.00 pence per share, up from the 14.50p per share dividend offered a year earlier.
"We are pleased to be delivering results in line with expectations, against a mixed trading backdrop with a reduction in the number of UK vehicles on hire being offset by a more encouraging result in Spain where we have seen an increase in our core flexible hire business and an improvement in the residual values of used vehicles sold," said Chief Executive Bob Contreras.
"In all territories our renewed focus is on optimising our core rental business whilst taking opportunities to grow within our traditional markets and capture opportunities to expand our product offering whilst continuing to maximise value throughout the life cycle of our vehicle fleet," Contreras added.
Shares in Northgate were up 6.0% at 325.00p on Tuesday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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