VAN hire group Northgate is planning to make more acquisitions in Europe and the UK despite experiencing the toughest six months in its history.

The Darlington company said it was planning solid, organic growth in the UK market with more acquisitions to consolidate the fragmented van hire sector.

Northgate UK managing director Phil Moorhouse told The Northern Echo the company was looking at companies in France and Germany, as well as in new EU members in Eastern Europe.

"We have been looking at acquisitions for a while," he said.

"But we are pretty mean on the price. However, I think people's price expectations have changed a little, so we see that as an opportunity to be a bit more aggressive and look at acquisitions."

Northgate, which is the UK's largest van hire group, said the amount of money made on each vehicle had fallen in the past six months as competition forced it to lower hire rates and the sell-on market value of vehicles declined.

Despite that, pre-tax profits rose by 2.4 per cent in the first six months of its financial year, mainly due to its Spanish operations.

Northgate, which buys vehicles, rents them out and then sells them on, has a fleet of 52,400 vans, trucks and cars in the UK.

In the half year to October 31, group pre-tax profits were £28.3m, from revenues that rose 5.9 per cent to £176.9m.

Chief executive Steve Smith said Northgate's new fleet management operation would help companies who "own all their fleet and may find the prospect of rental too big a leap".

Mr Smith said that with only one in ten vans in the UK being a hire vehicle, there was still potential for growth - possibly by buying smaller rivals.

He said: "We have had what has probably been the toughest six months ever for us, but it has probably been as tough, or even tougher, for our competitors who are smaller than us.

"That may create an ability to consolidate the market."

Northgate has also expressed satisfaction with its expansion into Spain. The company bought 49 per cent of Record Rent in August and will own the firm outright later this year.

The Spanish market, in which it has 41,500 vehicles through Record Rent and its other business, Fualsa, is less mature than the UK and Northgate believes it could see organic fleet growth of 15 per cent each year for at least three years.

Mr Smith said the company was also beginning to research other markets.