Company ready for drive into eastern Europe

12:24pm Thursday 20th March 2008

VAN hire group Northgate has revealed it will move into new European territory in the coming months.

The Darlington-based company is in discussions with transport firms on the continent.

While a deal will not be made by the end of the financial year next month, it is "most probable"

Northgate will make an acquisition by the end of the calendar year. The plc - which employs 2,000 people, 400 of which are in the North-East - has thrived since moving into Spain through its purchase of Record Rent last year.

The move into new territory, likely to be in eastern Europe, will mark the latest phase in the rise of Northgate. The firm was founded 27 years ago in a house in Hurworth, near Darlington, by Alan Noble.

Speaking to The Northern Echo yesterday, Northgate chief executive Steve Smith said: "Any new acquisition we make won't be as large as the one we made in Spain, as that kind of opportunity doesn't exist. There is nothing else of that size available.

"However, we are looking at something that we can grow and build on, even if it has to be modest in size to start with.

"We've got a few targets and are in discussions with some companies at the minute, but we're not going to be rushing into anything, especially given the situation with the stock markets at the minute."

Releasing a statement to the Stock Exchange yesterday, Northgate revealed it remains on track to achieve its financial targets for the year, with strong progress being made in the UK and Spain.

Growth in its Spanish fleet, which stands at about 60,000 vehicles, is expected to be in the region of 12 per cent for the year.

It is also set to expand on its UK fleet - about 68,500 vehicles - after a decline in the post-Christmas period.

It was boosted late last year with the acquisition of Newarkbased self-drive hire group Hampsons for £9.8m.

In the statement, the company said: "Our markets in the UK and Spain remain satisfactory and our local intelligence does not give any suggestion of material change.

"We continue to make good progress."

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