AGM Trading Statement

RNS Number : 0930R

Northgate PLC

19 September 2017

 

19 September 2017                        

Northgate plc

TRADING STATEMENT

At the AGM of Northgate plc ("the Group"), to be held later today, Andrew Page, Chairman, will provide the following trading update: 

The Group continues to make good progress against its strategic objectives and we are pleased to report overall growth in closing vehicles on hire of 1,600 in the four months to 31 August 2017.  This compares to an overall reduction of 500 vehicles over the same period last year.

Spain has grown strongly with progress in both fixed term and flexible rentals.  In the UK, we are starting to see the positive impact from self help actions with a substantially lower rate of VOH decline than last year and a good relaunch of the new fixed term proposition in September.  Ireland has declined as the business has focused briefly on reducing customers with high levels of vehicle churn.

The overall success of our fixed term offer reflects its superiority versus lease financing and contract hire alternatives. Due to our hire infrastructure we can deliver significant product advantages to customers such as lower lengths of term and our in-house service, maintenance and repair facilities underpin a lower cost to serve.  Our average term hire period is 35.5 months in Spain, 26.3 months in the UK and 12 months in Ireland.

Closing Vehicles on Hire
	August 2017	April 2017	Change (Aug-17 vs. Apr-17)	Change (Aug-16 vs. Apr-16)
UK	39,300	39,500	-200	-700
Spain	39,7001	37,700	2,000	100
Ireland	3,300	3,500	-200	100
Group	82,300	80,700	1,600	-500
Flexible Rental	75,100	74,700	400
Fixed Rental2	7,2003	6,000	1,200
	82,300	80,700	1,600

¹Including 400 seasonal "vacation hires" (c.f. 400 seasonal "vacation hires" also in August 2016)
²Including Spain fixed legacy contracts taken out before launch of new fixed term product
³Stated net of 500 returns from a Spain legacy fixed term customer

While recognising that we are only four months into our financial year, we remain on track to meet expectations for the full year. We expect the weighting to be skewed to the second half, more than has been the case historically, as various cost savings and benefits from the implementation of our strategy start to have an impact. 

Northgate will be hosting an Investor Day on 4^th October 2017 to provide further insight on recovery progress in the UK as well as the company's growth strategy and medium term objectives.

For further information, please contact:

Northgate plc                                                    01325 467558

Kevin Bradshaw, Chief Executive Officer Paddy Gallagher, Chief Financial Officer

MHP Communications                                  020 3128 8100 / [e-mail]

Andrew Jaques Barnaby Fry

Simon Hockridge

Ollie Hoare

Notes to Editors:

Northgate plc is the leading light commercial vehicle hire business in the UK, Ireland and Spain by fleet size and has been operating in the sector since 1981.

Northgate's core business is the hire of light commercial vehicles to businesses on a flexible or term basis, giving customers the ability to manage their vehicle fleet requirements in a way which can adapt to changing business needs without the requirement to enter into a long term commitment. Further information regarding Northgate plc can be found on the Company's website: www.northgateplc.com

 

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