Northgate (NTG) revealed full-year figures in line with expectations despite a mixed trading backdrop, reflected by the contrasting fortunes of its Spanish and UK operations. The group, the leading light commercial vehicle hire specialist in both locales, recorded a 2 per cent fall in underlying profit to £82.9m, although the figure was suppressed by an adverse impact of £3.7m from changes linked to vehicle depreciation rates and another £1.7m relating to weakness in the single currency. Factor those one-off charges into the equation, along with £62.9m in free cash flow (against an outflow of £7.8m a year earlier), and it's easy to see why management felt able to bump up the full-year payout by 10 per cent.
Northgate's Spanish operations continue to impress, with adjusted operating profit up by a quarter, buoyed in part by changes in depreciation rates, but also noteworthy for the maintenance of an impressive utilisation rate of 91 per cent. However, a 3 per cent fall in the average number of vehicles on hire through the UK business weighed on profitability, although this was partially offset by an increase in revenue per vehicle. Nevertheless, the UK operating margin still contracted 3.2 percentage points to 19 per cent. Management is pushing through a number of initiatives, including measures designed to retain sales staff, in a bid to galvanise the domestic business.
Numis expects adjusted profit of £78m for the April 2017 year-end, giving rise to EPS of 46.5p, down from £82.9m and 49p in FY2016.
| NORTHGATE (NTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 337p | MARKET VALUE: | £449m | |
| TOUCH: | 336.5p-337p | 12-MONTH HIGH: | 619p | LOW: 307p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 354p | NET DEBT: | 66% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 707 | 46.0 | 30.4 | 3.0 |
| 2013 | 610 | -11.4 | -5.5 | 7.3 |
| 2014 | 571 | 51.2 | 29.9 | 10.0 |
| 2015 | 614 | 83.0 | 50.1 | 14.5 |
| 2016 | 618 | 77.6 | 46.1 | 16.0 |
| % change | +1 | -6 | -8 | +10 |
Ex-div: 18 Aug Payment: 23 Sep | ||||
