418.70p0.12%

Interim report for the year ended 30 April 2016

28 June 2016                     

 

NORTHGATE PLC

PRELIMINARY REPORT FOR THE YEAR ENDED 30 APRIL 2016

Overall results in line with expectations and increase in dividend

 

Northgate plc (“Northgate”, the “Company” or the “Group”), the UK and Spain’s leading specialist in light commercial vehicle hire, announces its results for the year ended 30 April 2016.

 

Financial summary

  • Underlying profit before tax £82.9m (2015 – £85.0m) including:
    • £3.7m adverse impact from the previous changes in vehicle depreciation rates;
    • £1.7m adverse effect of the weakened Euro across the year;

Adjusting for the above factors, underlying profit before tax increased by £3.3m; 

  • Profit before tax £77.6m (2015 – £83.0m); 
  • Underlying basic earnings per share 49.0p (2015 – 51.0p); 
  • Basic earnings per share 46.1p (2015 – 50.1p); 
  • Reduction in net debt from £337.8m at 30 April 2015 to £309.9m including:
    • £42.8m net cash generation post dividends;
    • £16.1m adverse effect of the strengthened Euro at the balance sheet date; 
  •  10% increase in proposed full year dividend per share to 16.0p (2015 – 14.5p):
    • Final dividend proposed 10.9p (2015 – 10.2p). 

Operational summary

  • UK:
    • Underlying operating profit £58.2m (2015 – £69.0m), including a £5.9m adverse impact from the previous changes in vehicle depreciation rates;
    • Restructuring and strengthening of the UK management team completed;
    • Average vehicles on hire 3% lower than the prior year;
    • Average revenue per vehicle increase of 2% compared to the prior year;
    • Average utilisation of 87% (2015 – 88%);
    • Closing vehicles on hire of 45,700 (April 2015 – 48,600).
  • Spain:
    • Underlying operating profit £41.3m (2015 – £33.3m) including a £2.2m benefit from the previous changes in vehicle depreciation rates;
    • Average vehicles on hire constant compared to the prior year, including a change in mix with a higher proportion of SME customers;
    • Average revenue per vehicle increase of 1% compared to the prior year;
    • Average utilisation of 91% (2015 – 91%);
    • Closing vehicles on hire of 35,700 (April 2015 – 35,600). 

Bob Contreras, Chief Executive, commented: 

“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. The cash generation of the Group remains strong with free cash flow generation of nearly £63m, giving us the confidence to propose a 10% increase in the dividend.

During the year we have strengthened our UK management team and whilst it will take time for this to translate into results, we believe that this will allow us to optimise our UK business and enable us to take advantage of the growth opportunities that we see.

Our Spanish business continues to execute its market strategy well, leading to improved profitability and returns.

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.“    

Full statement and results attached.

There will be a presentation to analysts at 9.30am today at Numis, 5th floor, London Stock Exchange Building, 10 Paternoster Square, London EC4M 7LT.  If you have not already registered for attendance then please contact MHP Communications on the number below.  A live webcast of the presentation will be available to view via a link on the Company’s website www.northgateplc.com

 

For further information, please contact:

 

Northgate plc                                                    01325 467558

Bob Contreras, Chief Executive

Paddy Gallagher, Group Finance Director

 

MHP Communications                                  020 3128 8100

Andrew Jaques

Barnaby Fry

Simon Hockridge

Ollie Hoare