A VAN and car rental firm says a senior management reshuffle will ignite fresh growth after wavering industry demand and Government cuts marred its progress.

Northgate Vehicle Hire has seen annual profits dip after UK needs fell and its Spanish business held steady.

The Darlington-headquartered company said its UK division has been affected by Whitehall’s decision to pare back renewable energy installation tariffs and the construction sector’s malaise.

The operation has also felt the effects of turning away from weekend hires to concentrate on more lucrative business agreements.

However, Bob Contreras, chief executive, said he was pleased with Northgate’s performance in what he described as a mixed market environment, saying moves to bolster management will deliver renewed impetus.

That senior team now includes Eddie Aston, who has taken over as UK managing director, Ruth Spratt, who is the new UK sales director, and UK marketing director, Karen Whittingham.

He told The Northern Echo the changes would yield positive results, highlighting the effects of similar changes in Spain a number of years ago, where Northgate has more than 20 rental sites.

Mr Contreras: “We run a very disciplined business and if the world deteriorates, it is in a strong position and not fragile.

“We have a new senior team and they are just bedding in; they’ve had a good look at the business and there are a number of initiatives going on.

“We have brought in a very strong marketing team and the strategy is to get the brand further into the marketplace.

“Our team in Spain has been established for five years now and they are going from strength-to-strength.

“They have a strong presence in the local marketplace and the prospects are extremely good.”

Northgate, based in Darlington Building Society’s former home in the town, started life as Noble Self Drive in 1981, when Alan Noble set up business from his Darlington home.

It now has more than 75 branches across the UK, including depots in Darlington, which includes a workshop and van sales centre, Stockton, Blaydon, near Gateshead, and North Shields, North Tyneside.

According to its results, for the year to April 30, group underlying pre-tax profits stood at £82.9m, lower than the £85m recorded a year ago.

Mr Contreras said the number included a £3.7m hit from changes in vehicle depreciation rates and a £1.7m setback from the weakened Euro.

He also revealed the average number of UK vehicles on hire was down three per cent on a year ago, from 48,600 to 45,700, with Spain remaining constant at 35,700.

Referring to UK market issues, he added: “The renewable energy cuts (affected performance) because when all the tariffs were cut, it cost 1,000 vehicles.

“That was a key part of the business.”

Mr Contreras also told The Northern Echo he was pausing the company’s expansion plans as its UK changes came in, saying it was too early to gauge what effects may arise from the EU Referendum result.

However, he said the business remains confident.

He added: “We’ll pause expansion for a least a year until we get the momentum in sales.

“We have been stable since Christmas and although we started the new financial year with less vehicles on hire than expected, we expect hires to grow over the course of the year, subject to EU uncertainty.”