Northgate on the road to expansion

VAN hire market leader Northgate is continuing to expand despite challenging market conditions, growing its regional sales team by 50 per cent and keeping its branch opening plan on track.

The Darlington-based firm, which has a UK fleet of 51,000 as well as operations in Spain and Ireland, reported a net reduction in hires of 1,400 units, but managed to increase its regional vehicle hire by 200 units in the six months to October 31 after recruiting 50 per cent more staff in its regional sales teams since May this year.

The headline figure saw a slump due to the firm’s national business, which oversees customers – often large firms –who rent a high number of vehicles in a single transaction, has fallen by 1,600, with five customers accounting for 1,100 of this drop.

Northgate said it had already identified opportunities with new potential national customers.

The improvements in the firm’s regional business are part of a series of improvement programmes being implemented by the company, focussing on skills, resources and support in the sales teams, which is also being rolled out throughout the national sales teams.

As well as opening four new branches by the end of the financial year, Northgate, which recently created 150 jobs in Darlington after consolidating its UK business in the region, has identified growth opportunities in its 62 UK branches. The firm reduced its fleet from 52,900 in April 30 to 51,000 in October, with vehicles purchases in the six months to October 31 totalling 9,600, compared to 10,100 in the same period the previous year.

The rental fleet’s average age dropped to 20.4 months at October 31 compared to 21.4 months six months earlier.

The firm said Spain continued to be a very difficult market to operate in, with vehicles on hire falling by 1,300, compared to a decline of 800 in the same period for the previous year, and 4,600 in the second half of the last financial year.

The firm said it had made continued efforts to deploy resources to Spain, resulting in an increase in new customers, but this had not completely offset the decline in existing customers.

The firm is to put into action a plan to increase capital returns in the Spanish operation, including price increases, improving vehicle maintenance, and a workshop efficiency programme.

Northgate started life in 1981, when Alan Noble set up Noble Self Drive from his Darlington home. It now employs about 2,000 staff, about 400 of them based in this region. Bob Mackenzie, chairman, said: “Current trading is broadly in line with the board’s expectations. The group’s market leading position, more efficient business model, strengthened balance sheet and ongoing investment in both our people and systems provides the board with confidence that the group continues to be well-placed to deliver significant returns to shareholders.”

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