Northgate back in profit

30th Jun 2010 07:54

Car and van renter Northgate has returned to profit after the huge write-downs that nearly sank the company last year, but ruled out a dividend in view of the economic uncertainty in both its main markets."The company is facing difficult economic conditions in both the UK and Spain. There will be major government cutbacks which will reduce demand for some vehicle units, but our flexible model may well prove attractive to customers who struggle to raise the capital for outright purchase or do not wish to commit to long-term lease or contract hire," it said.The group made £9.6m in the year to April against losses of £195.6m. Operating profit increased by 15.4% to £82.8m (2009 - £71.8m), while underlying profit before tax increased by 32.8% to £36.5m. Revenues were £749m against £770m.Average utilisation in the year came in at 91% in the UK (2009 - 88%) and 88% in Spain (2009 - 83%). Northgate benefited from strong used vehicle markets in both the UK and Spain. Its fleet sizes at the end of the year were 60,900 in the UK (2009 - 62,900) and 48,900 in Spain (2009 - 60,400). During the year net debt reduced by £288m to £598m, helped a £77m rights issue. "Since the refinancing last year, we have met substantially all of our targets. Going forward, we will concentrate on doing simple things very well. We will complete the UK restructuring. Our aim is 90% utilisation and if we need to further reduce the fleet so be it. Maximising returns and charging fully for ancillary services will be our prime target," it added.