Northgate shares jump after strong H1 growth, dividend hike

2nd Dec 2014 08:09

Interim results from Northgate were well-received by the market on Tuesday as the vehicle hire group hiked its dividend by over a third and said that trading since the half-year has been "slightly ahead" of expectations.Northgate, which specialises in light commercial vehicle rentals in the UK and Spain, said pre-tax profit increased by 70% year-on-year to £46.7m in the six months to 31 October.On an underlying basis, which excludes exceptional and intangible amortisation, profits increased by 49%."The underlying performance of the first six months of the year is slightly ahead of our expectations with both vehicles on hire growth and improved margins being achieved in both the UK and Spain," Northgate said.Revenues increased to £305m, up 5.6% on the year before, as the number of vehicles on hire increased by 2,800 to 49,400.The interim dividend was lifted by 34% to 4.3p per share.The group said net debt rose 15% over the period to £397m though this was as expected due to the growth in the UK and Spain. Gearing increased to 100% from 91% in April.Looking ahead, chairman Bob Mackenzie said: "The board remains confident that we are well positioned to deliver further growth and attractive returns to shareholders. The group is currently trading slightly ahead of our expectations."The stock had jumped 5.7% to 515.2p by 08:29.