White van man eyes gain in Spain

13 April 2012

VAN hire group Northgate today signalled an expansion of its Spanish operations as it hailed a solid performance in the UK and continental Europe.

The Darlington-based group posted a 19% rise in pre-tax profits to £22.4m in the six months to October 31, against £18.8m last time.

This included an 'excellent' contribution from Spanish vehicle firm Fualsa, in which it holds a 40% stake.

Chairman Michael Waring said it was 'highly probable' the firm would exercise its right to purchase a further 40% of the equity in Fualsa by the end of May.

During the past year, the Spanish network has expanded to eight hire sites, with new locations in Malaga and Barcelona, while additional sites are planned in Madrid and Santander. Its Spanish fleet size grew 12.5% over the six-month period to reach 13,500 vehicles.

Northgate, which operates the UK's largest chain of white vans and other commercial vehicle rental operations, reported a 16.8% rise in turnover to £186.5m amid 'challenging market conditions'.

Waring said the primary focus remained the UK market, which offered excellent potential for growth. The company intended to invest in new locations.

Fleet size in the UK grew by just 2% to 47,500 vehicles during the six months to October 31, which was 'well below historic levels'. This was to allow investment in the existing car hire network.

The group currently runs 70 branches, which trade under local brand names such as Maincrest Vehicle Hire in Liverpool and Three Counties Self Drive in Milton Keynes.

It employs more than 1,600 people and has 10,000 customers in the UK, ranging from local tradesmen to companies such as distributor TNT and delivery firm Parcelforce.

Northgate said it had made an excellent start to its three-year growth plan of increasing the number of UK sites to 100 and fleet to 60,000 vehicles.

It also announced a rights issue of more than 3m new shares to fund its expansion.

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