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25 Jun 2019 | 08:11

Northgate profit rises 15% as vehicle rental margins improve in the UK, Spain

Vehicle hire group Northgate booked a 15% rise in full-year profit as it boosted sales and margins in both the UK and Spain.

Pre-tax profit for the year through April rose to £60.4m, up from £52.7m on-year.

Vehicle hire revenue rose 9.9% to £517.6m, though vehicle sales revenue fell 1.1% to £227.8m, bringing total revenue growth to 6.2%.

Rental margins rose to 12.4%, up from 11.1%.

The company declared a full-year dividend of 18.3p per share, up 3.4% on-year.

For the current financial year, Northgate forecast rental revenue growth in the low to mid single digit percentages, while rental margins were expected to expand by a further 50 basis points.

Capex was expected to rise by 15-20%.

'Through continued performance improvement in our core rental business and extending our penetration into complementary services to broaden the fleet solutions we provide, I am confident that our strategy will deliver our medium-term objectives of further profitable growth, strong cash generation and attractive returns for shareholders,' chief executive Kevin Bradshaw said.

'We are disappointed with the share price performance and remain focussed on addressing the undervaluation of the group.'

'The search for our new chairman is well advanced with an exceptionally strong shortlist.'

'The board and management look forward to working alongside a new chair appointment to maximise value for shareholders.'

At 8:11am: (LON:NTG) Northgate PLC share price was +13p at 335p

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