Northgate profits rise 33 per cent after cost cuts
VAN HIRE firm Northgate said underlying pre-tax profits rose 33 per cent to a better than expected £36.5m last year, after a restructuring of its UK and Spanish businesses.
The County Durham-based company downsized its fleet of commercial vehicles by 13,500 and shed 130 staff to adjust to slower sales. Its UK branch had a 91 per cent utilisation rate last year.
Chairman Bob Mackenzie said the firm aims for 90 per cent utilisation overall, “and if we need to further reduce the fleet so be it”.
During the year the firm has reduced net debt by £288m to £598m, mainly as a result of a rights issue in January. The company said it has secured its debt structure until 2012.
The firm also noted that bad debts on its books from Spain had risen to €10.3m, up from €3.7m the previous year.
Shares jumped 14 per cent to 173.5p yesterday.