Northgate sees British business growth

Van rental firm Northgate expects its core business in Britain to stabilise over the next year, growing for the first time in eight years, propped up by the opening of new hiring locations.

The company, which rents vans to engineering, distribution, and retail firms in Ireland, Britain, and Spain, reported a fall in full-year profit yesterday as lacklustre consumer spending in Britain and economic turmoil in Spain took a toll on demand.

“[The UK business] will see stabilisation in the first half and we’ll look to increase growth through the second half as the benefit of new sites comes through,” said CEO Bob Contreras.

Over the next three years the company plans to open 20 new UK outlets.

Northgate said full-year hire revenue in the UK rose 1% despite its exposure to gloomy consumer spending in Ireland and Britain, which together account for almost two- thirds of total revenue.

Hire revenue in Spain fell 2%. While Northgate’s Spanish business will still see some decline in the current year, its rate is going to reduce significantly, Mr Contreras said.

The firm has refinanced its debt to cut interest payments, helping its Spanish business. The main benefit of the debt refinancing was that interest costs for the next year would likely reduce by about 65% to close to £13m (€15.2m), Mr Contreras said.

— Reuters