Van hire may not seem like a business that can be easily innovated, but Northgate (NTG) chief executive Bob Contreras believes his company has found a big gap in the market. At present, small businesses have very few options when it comes to leasing light commercial vehicles on flexible rental contracts for 12- to 48-month periods. That's set to change, as the success of a trial to market two-year fixed-term contracts in the Spanish market has proved wildly successful, and will now be rolled out in the UK and Ireland.
Northgate thinks it can double its addressable market without compromising return on capital employed, even though this metric dipped by 110 basis points to 10.9 per cent in the six months to October. Part of that drop was due to slowing orders from national customers in Spain, which Northgate expects to reverse following the formation of a minority government. An expected increase in vehicles on hire should also help, although this will be presided over by former Avis Europe managing director Kevin Bradshaw, who replaces Mr Contreras in January.