Northgate, the UK and Spain’s leading specialist in light commercial vehicle hire, today publishes its Interim Management Statement covering the period 1 November 2010 to 18 March 2011.
Vehicle utilisation in the four months to 28 February 2011 has averaged 91%, in line with the prior year period. The fleet size has increased since 31 October 2010 by 1,000 to 61,700 with 900 additional vehicles on hire compared to February 2010.
Hire revenue per rented vehicle has continued to improve, with an increase of c.3% since the beginning of the financial year.
The used vehicle market remains strong with residual values per vehicle at a similar level to the first half of the financial year.
The restructuring of the UK business continues to progress in line with our expectations, improving both operational efficiency and our commercial sales organisation. Additionally, we have successfully rolled out our new IT system across seven of the 11 UK regions covering 70% of the fleet. We anticipate completing the remaining four regions by the end of May 2011.
In Spain utilisation rates averaged over 91% in the four months to 28 February 2011, a 5% improvement on the same period last year. As planned, the fleet has decreased from 45,900 at 31 October 2010 to 43,400 at 28 February 2011.
Hire revenue per vehicle has remained constant for the four months to 28 February 2011.
The used vehicle market is stable in Spain allowing us to maintain utilisation at over 90% by disposing of excess stock. Residual values have remained at a similar level to the first half of the financial year.
We continue to make progress on debtor management. The bad debt charge for the ten months to 28 February 2011 was €3.3m, a €5.3m improvement compared to €8.6m for the same period last year.
The planned merger of the two brands in Spain, Fualsa and Record, was successfully implemented on 1 January 2011. Our Spanish business therefore trades under the Northgate brand, which has been well received by customers.
Despite macroeconomic conditions adversely affecting the UK and Spanish markets, overall we are trading slightly ahead of our plans. We are making good progress in the review of our financing facilities; the bank facilities maturing in September 2012. Our net debt continues to reduce with our focus on increasing the Group’s Return on Capital Employed through hire rate improvement and internal efficiencies.