Northgate posts small drop in first half profit but lifts dividend

For the half year to the end of October, underlying pre-tax profit slipped to £45.9m from £47.8m in the same period last year, on revenue of £313.1m from £305m.

The company pointed to a £2.4m adverse impact from the change in vehicle depreciation rates and a £1.9m adverse effect from the weakening euro.

At constant currency, profit would have been £1.9m higher.

The company, which specialises in light commercial vehicle hire, raised its interim dividend to 5.1p from 4.3p last year.

Northgate said it was trading in line with its expectations overall, despite a mixed backdrop in the first six months of the year, with some weakness in UK vehicles on hire offset by a strong performance in Spain.

Chief executive Bob Contreras said: “Our Spanish business continues to execute its market strategy well; leading to improved profitability and returns. We anticipate this continuing against the backdrop of an improving Spanish economy.

“There are opportunities for growth in the countries in which we operate and the group remains well positioned to deliver attractive returns to shareholders. There is no change in our expectations for the full year.”