Northgate's (NTG) average vehicle hire rates for its UK and Spanish markets dropped in the six months to the end of October, as management focused on small and medium-sized enterprises (SME), rather than national businesses and short-term consumer hires. Although the van rental group recorded a 3 per cent average increase in revenue per vehicle, a weak euro and depreciation rate changes on the group's fleet wiped £2.4m off operating profits, which fell 5 per cent on the 2014 half-year to £51.6m.
The good news was that Northgate managed to sell a greater proportion of Spanish and UK vehicles that had reached the end of their rental life via the more profitable retail channel. In Spain the group's decreased reliance on the construction sector - which now accounts for around a fifth of its client base - seems to be paying off. Spanish operating margins came in at 29.6 per cent, compared with 22.9 per cent in 2014.
Broker Peel Hunt expects adjusted EPS of 47.6p for the April 2016 year-end, down from 50p in 2015.
NORTHGATE (NTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 400p | MARKET VALUE: | £532m | |
| TOUCH: | 400-404p | 12-MONTH HIGH: | 664p | LOW: 379p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 334p | NET DEBT: | 76% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 305 | 46.7 | 27.9 | 4.3 |
| 2015 | 313 | 42.8 | 25.4 | 5.1 |
| % change | +3 | -8 | -9 | +19 |
Ex-div: 10 Dec Payment: 11 Jan | ||||
