In the six months to October, Northgate (NTG) has been busy putting the UK side of the fleet hire operation onto a steadier platform, installing a new management team and investing in IT systems and other self-help measures. The benefits have not yet shown through in these numbers: average vehicles on hire numbers were still lower, while UK rental margins fell from 15.2 per cent to 13.8 per cent.
Profits are expected to be greater in the second half as various cost savings start to have an effect, although the company is more cautious on disposal profits, which in the first half fell from £1,073 per unit to £600. A new minimum term product is starting to gain traction, with customers paying a lower tariff in return for signing up for a specific period. An added attraction for the customer is a much lower settlement on vehicles returned prior to contract expiry.
Trading in Spain has been much stronger, with 11.5 per cent growth in vehicles on hire and rental margins up from 15.6 per cent to 16.6 per cent. Profits from vehicle sales were lower, however, partly as a result of an accounting change in the way that depreciation is treated.
Analysts at Numis are forecasting pre-tax profits for the year to April 2018 of £71m and EPS of 43.7p (from £75m and 47.3p in FY2017).
| NORTHGATE (NTG) | ||||
| ORD PRICE: | 386.5p | MARKET VALUE: | £515m | |
| TOUCH: | 386.3-387p | 12-MONTH HIGH: | 576p | LOW: 382p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 398p | NET DEBT: | 79% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 317 | 40.0 | 25.5 | 5.7 |
| 2017 | 350 | 31.0 | 19.1 | 6.1 |
| % change | +10 | -22 | -25 | +7 |
| Ex-div: | 13 Dec | |||
| Payment: | 26 Jan |
