Northgate posts drop in annual profit, appoints new CFO

Vehicle hire firm Northgate posted a drop in full-year pre-tax profit on Tuesday amid lower rental profit in the UK and Ireland, as it announced the appointment of a new chief financial officer.

In the year to 30 April, underlying pre-tax profit fell 24% to £57m, while underlying earnings before interest, taxes, depreciation and amortisation edged up 4% to £251m. As well as lower profit in the UK and Ireland, the company highlighted significantly lower levels of profit on disposal of used vehicles across the group and the impact from new vehicle and other cost inflation.

Overall revenue was up 5.1% in the year to £701.7m, with revenue from vehicle hire up 3.3% to £471.2m and revenue from vehicle sales 9.1% higher at £230.5m.

Northgate said its Spanish business continued its "excellent" performance, with rising vehicle on hire (VOH) and increased rental profits. In addition, it pointed to early signs of an improved performance in the UK, with the fourth quarter seeing growth in VOH to yield a year-end volume almost 7% ahead of the previous year.

"This improving trend together with some upward revisions in hire rates should help to deliver improved UK rental profit performance in 2019," the company said.

Northgate also announced the appointment of Philip Vincent as its new CFO with effect from 18 July. Interim CFO David Tilston will remain with the business for a short period of time to facilitate an effective handover.

Vincent was most recently regional finance director for Asia Pacific at SABMiller and had previously been director of group finance and control. Before that, he spent three years as CFO at BBC Worldwide, the main commercial arm of the BBC, following a range of senior financial roles there spanning over ten years.

Chief executive Kevin Bradshaw said: "Philip is a high calibre finance professional whose career to date makes him very well suited to support the execution of our strategy. I look forward to working closely with him to drive forward the transformation of our UK business, maintain our rapid growth in Spain and achieve our ambitious goals for Northgate."

At 1445 BST, the shares were up 3.1% to 411.40p.