Commercial vehicle hire group Northgate (NTG) continued its recovery with a 14 per cent increase in underlying half-year pre-tax profit to £32m. Shareholders were also rewarded with a hefty dividend hike.
Vehicles on hire grew by 2,800 compared with the April year-end; a marked contrast to the 1,400 reduction in the first half of the previous year. However, the average number of vehicles on hire from a year earlier still fell 3 per cent and the operating profit dropped from £47.6m to £38.1m - that's mainly because vehicle sales fell from 5,600 to 3,700 during the year. This, in turn, reduced the operating margin from 24.4 per cent to 18.7 per cent and the return on capital employed from 14.8 per cent to 12.5 per cent.
But with an improving trend in hire rates during the half, Northgate expanded its branch network by three to 65 - another two sites have been opened since the period ended. Further expansion is planned away from the group's northern bias, too - notably in London, and at least 20 more sites are expected to open before April 2016. Meanwhile, the group's Spanish operation saw vehicles on hire grow by 1,200; arresting five years of decline.
Broker Numis Securities expects full-year pre-tax profit of £60m, giving EPS of 34.2p (from £49.5m and 29.2p in 2013).
| NORTHGATE (NTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 431p | MARKET VALUE: | £574m | |
| TOUCH: | 430-432p | 12-MONTH HIGH: | 459p | LOW: 248p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 284p | NET DEBT: | 98% | |
| Half-yearto 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 315 | 24.6 | 13.1 | 1.3 |
| 2013 | 289 | 27.4 | 15.7 | 3.2 |
| % change | -8 | +11 | +20 | +146 |
Ex-div: 11 Dec Payment: 10 Jan | ||||
