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Northgate full-year profits at top-end of expectations

Last updated: 11:35 26 Jun 2018 BST, First published: 10:49 26 Jun 2018 BST

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Philip Vincent will be on a basic annual salary of £330,000

Shares in van-hire firm Northgate PLC (LON:NTG) edged higher as the company unveiled profits that were above the mid-point of the range of analysts' estimates.

The company followed up its upbeat May trading update with a decent set of full-year results for the year to the end of April.

READ: Northgate shares rise as vehicle hire number beat expectations

Revenue from vehicle hire rose 3.3% to £471.2mln from £456.1mln the year before while vehicle sales brought in £250.5mln, up 9.1% from £211.3mln the year before.

Underlying earnings (Ebitda) rose 4.0% to £251.0mln from £241.3mln the previous year but underlying profit before tax fell by around a quarter to £57.0mln from £75.0mln. Analysts who follow the stock had predicted profit before tax of between £54mln and £58mln.

Net debt at the end of April had risen to £439.3mln from £309.9mln the year before, but that did not stop the board from proposing an unchanged final dividend of 11.6p, pushing the full-year dividend up to 17.7p, representing an increase of 0.4p on the previous year.

UK vehicles on hire (VOH) returned to growth, with organic year-end closing VOH 6.9% higher year-on-year, Northgate said. Meanwhile, an increase in VOH in Spain drove a 14.8% increase in rental revenue.

“Our self-help turnaround programme in the UK started to deliver tangible results, with more competitive pricing, commercial agility and competitive new propositions reversing the previous decline in VOH, which ended the year 6.9% higher on a like-for-like basis than at the same time last year. We have now acquired more than 3,400 vehicles following a competitor's entry into administration, reinforcing our momentum in the market,” said Kevin Bradshaw, the chief executive of Northgate.

The company also announced its new chief financial officer. The new bean-counter is Philip Vincent, who was previously regional finance director for brewing giant SABMiller’s Asia Pacific business.David Tilston, the current interim chief financial officer, will remain in the business for a short period to facilitate an effective handover to Vincent.

Vincent will be an executive director on an annual salary of £330,000 plus bonus, with a pension contribution of 18% of his annual salary.

Shares in Northgate were up 0.65 at 401.4p in mid-morning trade.

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