Partner Article

Northgate remains cautious

Vehicle rental group Northgate yesterday warned that further cost cutting is expected amid ongoing economic uncertainty.

The Darlington-based plc, which hires out fleets of company vehicles across Britain and Spain blamed the bleak outlook on the ‘uncertainty’ and ’difficulties ’of both market economies.

The firm cut its workforce back by 360 last year, while the number of vehicles were reduced by a further 1,000 since the start of November.

Paul Tallentire, Northgate’s deputy CEO, said: “Like most companies, this time last year was a very difficult market place and we set about implementing a new plan which was about operational efficiency and managing the business differently in the tough market we faced both here in the UK and Spain.”

The company is expecting to reduce its net debt from £706m in October last year to below £650m by April 30 2010. Meaning a reduction of £236m in the company debt over the past 12 months.

Mr Tallentire, said: “ We’ve implemented the internal policies that we said we would and therefore the business is operating at much better level.“

A company statement issued yesterday said: “ As expected, the macroeconomic conditions continue to adversely affect the Group’s markets; with the outlook for the UK remaining uncertain and Spain continuing to be very difficult.

Our focus therefore remains on hire rate improvement, efficient fleet management, further cost reductions and cash generation.“

This was posted in Bdaily's Members' News section by Ruth Mitchell .