Final Results

Northgate PLC
4 July 2001


Wednesday 4 July 2001


                                NORTHGATE PLC


             PRELIMINARY RESULTS FOR THE YEAR ENDED 30 APRIL 2001



Northgate plc, the UK's leading specialist in light commercial vehicle hire,
announces its preliminary results for the year ended 30 April 2001.



*          Turnover up 20% to £261.8m (2000: £218.3m)

*          Operating profit up 12% to £42.6m (2000: £37.9m)

*          Pre-tax profit up 11% to £27.1m (2000:  £24.3m)

*          Strong cash flow with EBITDA up 14% at £118.8m

*          Earning per share up 11% to 31.0p (2000:  27.9p)

*          Dividends increase by 6% to 14.0p (2000:13.25p) per share

*          Fleet increases to over 36,000 vehicles

*          Fleet utilisation remains above 90%

*          Increase in overall hire rates achieved - first time since 1997

*          Profits on disposal of used vehicles achieved in last quarter

*          Gearing reduced to 174% (2000:189%)

*          Interest cover unchanged at 2.8 times



Michael Waring, Chairman commented:



'We have now completed the second year of our five year Strategy for Growth in
which our goal is to double the size of Northgate's business.  We remain
firmly on track.



Furthermore, we have made sound progress during the year in operational areas
that were priorities for our management team - most notably achieving
increases in hire rates and returning our used vehicle sales to profitable
levels. We have also continued to generate a strong cash flow, growing the
fleet by 11% while reducing gearing levels that were already conservative by
industry standards.



Despite a 220% growth in fleet over the past 5 years, we continue to believe
that we have not yet tapped the full potential of the market in the UK, nor
indeed that in continental Europe.  Independent research confirms our view
that rental penetration in the UK remains low compared to the more mature US
market.



Our faith in our ability to successfully grow Northgate is undiminished.'



Full statement and results attached.



For further information, please contact:


Northgate plc                           01325 467558
Steve Smith, Managing Director          (On 4 July 2001:  020 7357 9477)
Phil Moorhouse, Finance Director

Hogarth Partnership Limited             020 7357 9477
Andrew Jaques
John Olsen





Chairman's Statement to Shareholders



My report to you covers the second year of our Strategy for Growth in which we
set out our aim to double the size of our business within five years.



Not only are the results consistent with that strategy, but we have also had
success in the areas of the business which we determined to progress this
year. These are just some of the achievements of the year:



-     Our earnings per share have risen by 11%.

-     Utilisation has averaged in excess of 90%.

-     We have achieved an increase in the overall hire rate for the first time
      in 4 years.

-     We have improved the management of our used vehicle sales to the extent
      that we achieved profits on disposals in the last quarter.

-     The regional management structure is now well established giving us the
      right foundations on which to continue the growth of our business.

-     Our depot network has grown to 48 sites with another 4 ready to open.



All this has been achieved without any increase in gearing, demonstrating that
Northgate can achieve this growth without raising gearing levels, which are
themselves modest by industry standards.



Our faith in our ability to successfully grow Northgate is undiminished. In
fact, despite a growth in fleet over the past 5 years from 11,250 to over
36,000 vehicles, we believe we have not yet tapped the full potential of the
market in the UK, nor indeed that in continental Europe, for the flexible
rental product we offer to customers under the brand name NORFLEX.



Christopher Spence and Michael Baughan, who have been non-executive directors
of Northgate plc since 1985 and 1987 respectively, have indicated their desire
to step down from the board at the AGM.  I am extremely grateful to both of
them for their untiring efforts on behalf of the shareholders over many years.
We have all benefited greatly from their counsel. At the same time I would
like to welcome Jan Astrand, who joined the board on 13 February 2001 as a
non-executive director.  He comes with wide experience of the vehicle rental
industry in both Europe and the UK.



Finally I would like to thank my fellow directors, the management and staff
for all their efforts on your behalf. In addition I would like to thank
shareholders for their continued support.




OPERATIONAL REVIEW



Network



We have opened 4 hire companies and 2 branches in the year to 30 April 2001.
Since the year end, we have acquired a further 4 properties which are now
ready to open and which will provide us with a network of 52 locations.
Aberdeen and Dublin in particular have significantly extended our geographic
coverage.  It remains our intention to open between 10 and 12 new locations in
the current financial year as we continue to infill those areas where
opportunities exist.



Vehicle Fleet



Our vehicle fleet at 30 April 2001 was over 36,000, an increase of 3,500, or
11%, over the previous year.  The increase was a result of both new depots
(1,400 vehicles) and organic growth in existing locations (2,100 vehicles).
In the 2 years since 1999, when we announced our five year Strategy for Growth
aimed at doubling the size of our business, we have increased the fleet by 35%
from 26,600 to the current level.



The fleet mix remains heavily biased towards light commercial vehicles with
80% of vehicles being commercials of up to 3.5 tonnes.  Our policy of
purchasing the market leaders' products in each weight category continues to
pay dividends in terms of both our ability to rent the product and its
residual value.  Our main suppliers remain Ford, Mercedes, Vauxhall and Iveco.



Our management of the vehicle fleet remains as vigilant as in previous years
and we have achieved overall utilisation levels in excess of 90%.  This
average is a combination of both new sites, where utilisations are normally
below average, and more mature locations operating above 90%.



Hire rates



In last year's review, we made reference to ' a period of relatively stable
prices' and the opportunity to 'obtain some modest hire rate increases'.  We
are pleased to report that during the year under review, despite the market
remaining competitive, we have achieved an overall increase in hire rates for
the first time in 4 years.



Used Vehicle Sales



The first half of the year saw a continuing soft residual market holding back
our efforts to improve vehicle disposal margins.  From January 2001, however,
we have seen better used vehicle prices which, coupled with our internal
improvements, has resulted in profits being achieved on disposals in the last
quarter.  Norcom, the disposal centre for refurbished vehicles that was
launched on 1 May 2000, now accounts for 12% of our disposals and has made a
valuable contribution to this improvement.



For the current year, we remain optimistic that we can achieve our target of
break even or better on vehicle disposals.





Technology



We have continued with a number of technology based initiatives during the
year, both to develop new electronic sales channels and to deliver better
fleet monitoring solutions for our customers.



First, we now have an on-line booking facility through our virtual rental
company Wannavan.  This was launched in June 2001 and allows customers to
access our network of hire companies and the ability to reserve vehicles
on-line.



Secondly, we have developed Norfleet, a brand which seeks to utilise our
purchasing power, particularly in respect of vehicle related products.  Our
aim is to encourage customers to purchase these products through Norfleet,
thereby both increasing our purchasing power and offering customers a valuable
service.



Thirdly, as the group grows, we have recognised the need to improve
communication and provide a mechanism for knowledge to be shared.  Driveway,
our group intranet, which went live in May 2001, is an ideal conduit allowing
communication between all levels of staff and improved efficiencies within the
business.





The Market



In October 2000 we commissioned Datamonitor to report on the commercial
vehicle rental market in the UK.  Their key findings were as follows:-



*         The commercial vehicle rental market grew by 19.5% between 1998
and 2000 and is forecast to have a value of £2,900m by 2005, a further
increase of around 30%.



*         Growth is being driven by 'the propensity of new and existing
customers to outsource their logistics and fleet management operations'.
Companies with commercial vehicles are moving closer to the concept of '
usership' rather than 'ownership'.



*         Compared to the more mature US market, rental penetration remains
low in the UK at 9% v 33% in the US.





These findings confirm our belief in the opportunity we have to continue with
the expansion of our business in the UK where we have not yet fully tapped the
existing potential.



Last year we also carried out some preliminary research into the continental
European commercial vehicle rental market, which showed development in Europe
to be significantly behind the UK.  We are of the opinion that, at the
appropriate time, there will be considerable potential to roll out our
flexible rental product, NORFLEX, into those markets.


Current trading and outlook


In the year ahead we will continue to focus on maintaining a balanced position
on residuals, edging hire rates forward, expanding the depot network and
fleet, whilst achieving our traditional utilisation levels.



We remain confident of achieving these objectives and hence Northgate's
continued profitable growth.






FINANCIAL REVIEW



Sales and Operating Profit



Sales increased by 20% to £261.8m (2000:£218.3m) and operating profit
increased by over 12% to £42.6m (2000:  £37.9m).  This reflected the increase
in revenue from rental operations of 16%, together with a 31% increase in
revenues from vehicle sales, largely as a result of a higher number of
vehicles for disposal.



Revenue from hire companies increased across the network with growth in both
new and more mature sites.  At the end of the year 18 sites had been open less
than 2 years: the full benefit of these sites will flow through in subsequent
years.



Operating margins at 16.3% compared to the previous year of 17.4%.  This
reflects the cost of continued investment in new locations and a greater
proportion of turnover from vehicle sales than the previous year. These
vehicle sales are at a significantly lower margin than the hire operation.



Interest



The net interest cost was £15.5m, an increase of 14% over 2000.    This
reflects both the increase in average borrowings, largely due to fleet growth,
and the underlying increase in UK base rates over the corresponding period.



We continue to manage our exposure to interest rates: our policy is to have in
place financial instruments covering a proportion of our borrowings over the
longer term.



Interest cover was unchanged at 2.8 times.



Pre-tax profit



Profit before tax increased by over 11% to £27.1m (2000: £24.3m)



Taxation and FRS 19



We anticipate that the adoption of FRS 19, 'Accounting for tax', in the next
financial year will have no adverse impact as the company policy has always
resulted in full provision.



The tax charge of 30.6% comprises tax payable on ordinary activities.



Fixed Assets and FRS 15



In the year ended April 2000 a new accounting policy was adopted following the
introduction of FRS 15.  Manufacturers' volume related bonuses, previously
credited to profits on receipt, were spread over the life of the asset to
which they related.  This policy change resulted in a deferred income credit
last year of £49.4m in the balance sheet, to be released to profit over the
life of the vehicle rental fleet.



Following discussions with the Financial Reporting Review Panel, to comply
with FRS 15, these bonuses are now to be regarded as a reduction in the cost
of acquiring vehicles, rather than as deferred income.  Accordingly, the
deferred income account of £54.2m, which would have been shown separately as a
credit under Accruals and deferred income, has been deducted from the cost of
the vehicle hire fleet in fixed assets.  The effect will be to reduce the
depreciation charge over the life of the current vehicle fleet.  The effect of
the volume related bonus for the year ended 30 April 2001 of £48.8m is now
deducted from operating costs, through depreciation, rather than added to
turnover as would have been the case under the previous policy. The
comparative figures for the year ended 30 April 2000 have been amended
accordingly. This treatment has no effect on operating profits, although the
operating margin increases because of the change in turnover reported.



These adjustments affect turnover and the amount at which the vehicles are
carried but have no impact on profit, EPS, net assets, cash flows, gearing or
shareholders' funds.



Earnings per share


The calculated earnings per share were 31.0p, an increase of 11% on the 2000
figure of 27.9p.



Dividend


The Directors recommend a final dividend of 9.6p per share (2000: 9.07p),
making a total for the year of 14p (2000:  13.25p) - an increase of 6%.  It
will be paid on 14 September 2001 to shareholders on the register at 13 July
2001.  The dividend is 2.2 times covered (2000: 2.1).





Cash flow and funding



Gross cash generation continues to be strong with EBITDA for the year £118.8m,
up by 14% from 2000.   Capital investment was £172.6m, being £166.8m in the
vehicle hire fleet and £5.8m in non-vehicle expenditure on property and other
equipment, largely relating to the expansion of the depot network.



Our net borrowings increased marginally to £214.7m at 30 April 2001, with
average borrowing increasing by 8% year on year.



The finance facilities currently available to the group are in excess of  £
400m and are a mixture of hire purchase funding, revolving loans and
overdraft, secured primarily over the value of the vehicle hire fleet.  More
than 63% of our borrowings are longer than one year



The vehicle hire fleet consists mainly of light commercial vehicles which are
readily saleable, predominantly through our own vehicle sales company.  The
liquidity of the hire fleet and the management of interest exposure adequately
support the level of gearing at 174%, which remains low compared to the
industry norm.  Gearing has in fact reduced from last year's figure of 189%,
demonstrating our ability to achieve these growth levels without increasing
gearing.  This confirms the strong cash flows in the business.



Return on capital



Our Strategy for Growth is based upon expanding our depot network to around
100 locations.   The continued investment in new sites reduces margins in the
short term whilst these businesses are maturing.



Despite this our return on capital remains a healthy 12.8%.







                                NORTHGATE PLC


             PRELIMINARY RESULTS FOR THE YEAR ENDED 30 APRIL 2001



GROUP PROFIT ANNOUNCEMENT FOR THE 12 MONTHS ENDED 30 APRIL 2001


                                          2001                             2000
                                          £000                             £000
                                                                 (reclassified)

TURNOVER                               261,801                          218,286


OPERATING PROFIT                        42,569                           37,942


INTEREST PAYABLE - NET                (15,459)                         (13,617)


PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION                         27,110                           24,325

Taxation - UK                            8,306                            7,429

PROFIT FOR THE FINANCIAL YEAR           18,804                           16,896




                                NORTHGATE PLC

                             PRELIMINARY RESULTS



GROUP PROFIT ANNOUNCEMENT FOR THE 12 MONTHS ENDED 30 APRIL 2001 (continued)




                                                     2001                  2000
                                                     £000                  £000
                                                                 (reclassified)

PROFIT FOR THE FINANCIAL YEAR                      18,804                16,896

DIVIDENDS

Preference paid                                        25                    25
Interim paid                                        2,680                 2,528
Final proposed                                      5,812                 5,486

                                                    8,517                 8,039

PROFIT TRANSFERRED TO RESERVES                     10,287                 8,857

EARNINGS PER ORDINARY SHARE - BASIC (see note)      31.0p                 27.9p

DILUTED EARNINGS PER ORDINARY SHARE  (see note)     30.9p                 27.8p

DIVIDENDS PER ORDINARY SHARE

Interim paid                                         4.4p                 4.18p
Final proposed                                       9.6p                 9.07p

TOTAL DIVIDEND FOR YEAR                             14.0p                13.25p


                                NORTHGATE PLC

                             PRELIMINARY RESULTS



SUMMARY CONSOLIDATED BALANCE SHEET 30 APRIL 2001




                                                     2001                  2000
                                                     £000                  £000
                                                                 (reclassified)

Fixed assets                                      318,353               294,788

Current assets                                     82,244                75,636

Creditors: amounts falling due within one year  (133,869)             (108,166)

Net current liabilities                          (51,625)              (32,530)

Total assets less current liabilities             266,728               262,258

Creditors : amounts falling due after more
than one year                                   (136,620)             (142,828)
 

Provisions for liabilities and charges            (6,681)               (6,626)


                                                  123,427               112,804


Called up share capital                             3,539                 3,532

Share premium account                              45,321                44,992

Reserves                                           74,567                64,280

Shareholders' funds                               123,427               112,804


Net borrowings                                  (214,675)             (213,736)





                                NORTHGATE PLC

                             PRELIMINARY RESULTS



RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE 12 MONTHS ENDED 30 APRIL 2001


                                                     2001                  2000
                                                     £000                  £000
                                                                 (reclassified)

PROFIT FOR THE FINANCIAL YEAR                      18,804                16,896
Dividends                                         (8,517)               (8,039)

                                                   10,287                 8,857

Issue of ordinary share capital (net of               336                    92
expenses)

NET INCREASE IN SHAREHOLDERS' FUNDS                10,623                 8,949

OPENING SHAREHOLDERS' FUNDS                       112,804               103,855


CLOSING SHAREHOLDERS' FUNDS                       123,427               112,804




                                NORTHGATE PLC

                             PRELIMINARY RESULTS



                       CONSOLIDATED CASHFLOW STATEMENT

                    FOR THE 12 MONTHS ENDED 30 APRIL 2001


                                                      2001                2000
                                             £000     £000      £000      £000

                                                                (reclassified)

CASH INFLOW FROM OPERATING                         117,388              96,973
ACTIVITIES

RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE                              (15,266)            (13,079)

TAXATION                                               695             (6,309)

CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT

Purchase of vehicles for hire            (21,610)           (65,000)
Sale of vehicles for hire                  72,384             58,805
Other items (net)                         (5,366)            (5,087)

NET CASH INFLOW/(OUTFLOW) FROM
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT                                          45,408            (11,282)

EQUITY DIVIDENDS PAID                              (8,166)             (7,659)

CASH INFLOW BEFORE USE OF LIQUID
RESOURCES AND FINANCING                            140,059              58,644

MANAGEMENT OF LIQUID RESOURCES

Cash withdrawn from/(placed on) deposit                 23                 (9)

FINANCING

Issue of ordinary shares (net of              336                 92
expenses)
(Decrease)/increase in borrowings        (18,052)                421
Capital element of vehicle related hire
purchase payments                       (103,745)           (73,586)


NET CASH OUTFLOW FROM FINANCING                  (121,461)            (73,073)

INCREASE/(DECREASE) IN CASH FOR THE YEAR            18,621            (14,438)




                                NORTHGATE PLC

                             PRELIMINARY RESULTS



RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET DEBT


                                                       2001                2000
                                                       £000                £000
                                                                  (reclassified)

INCREASE/(DECREASE) IN CASH FOR THE YEAR             18,621            (14,438)

FINANCING

Decrease/(increase) in borrowings                    26,968               (421)
Capital element of vehicle related hire purchase    103,745              73,586
payments
Cash (withdrawn from)/placed on deposit                (23)                   9
Change in net debt resulting from cashflows         149,311              58,736
New hire purchase obligations                     (150,250)            (99,656)

MOVEMENT IN NET DEBT FOR THE YEAR                     (939)            (40,920)

NET DEBT AT 1 MAY 2000                            (213,736)           (172,816)

NET DEBT AT 30 APRIL 2001                         (214,675)           (213,736)



NOTES



Earnings per ordinary share



The calculation of basic earnings per ordinary share in respect of the year to
30 April 2001 is based on the profit attributable to equity shareholders of £
18,779,000 (2000: £16,871,000) and the weighted average of 60,578,305 (2000:
60,405,822) ordinary shares in issue (excluding those shares held by an
employee trust in connection with the Goode Durrant Long Term Incentive Plan).



Diluted earnings per ordinary share have been calculated on the basis of
earnings described above and assume that 217,000 (2000: 358,000) shares
remaining exercisable under the Goode Durrant Share Option Scheme had been
fully exercised at the commencement of the relevant period, such that the
weighted average number of shares is 60,837,249 (2000: 60,721,888) (including
those shares held by the employee trust in connection with the Goode Durrant
Long Term Incentive Plan).



The results for the years to 30 April 2001 and 30 April 2000 and the balance
sheets at those dates are abridged.  Full accounts for these periods have been
prepared on which the Auditors of the company have made unqualified reports
and which did not include a statement under Section 237 (2) or (3) of the
Companies Act 1985. The Accounts for the year ended 30 April 2000 have been
delivered to the Registrar of Companies.



The Report and Accounts will be mailed to shareholders not later than 20 July
2001.

Michael Waring                  Chairman

Phil Moorhouse                 Finance Director