Northgate switches focus to growth

In the UK, the number of vehicles hired fell 3,300 to 43,100 - a "disappointing" outcome which, along with fewer used vehicle sales, cut operating margin there by 110 basis points and operating profit by 14 per cent to £64.2m. Northgate blamed poor operational control at its depots where vehicles were not turned around fast enough. Changes made towards the year-end have yielded results. So, too, have increases to the regional sales force and branching out in London should help. Having stabilised the business, Northgate predicts growth from smaller customers this year. That's something chief executive Bob Contreras hopes to replicate with its larger customers who hired 3,000 fewer vans last year; down 15 per cent. Northgate hasn't grown here organically for eight years and new sales staff will have to work hard. In Spain, the rate of decline has fallen by two-thirds to 1,900 vehicles, but profit still skidded 28 per cent lower to £25.2m.

Broker Numis Securities expects adjusted pre-tax profit of £62.5m in 2014, giving adjusted EPS of 33p (2013: 28.3p).