Northgate warns of profit slump
Shares in Northgate PLC plummeted on Wednesday as the van rental group released a severe profit warning, the Financial Times reports.
The shares fell 45.7 per cent after Northgate said it was being hit by both a fall in the number of rentals and a drop in vehicle values when it came to sell its fleet.
As a result, Northgate said it would take impairment charges in the financial year to the end of April totalling £146m. Of which £60m would cover the drop in residual values of its vehicles. Northgate also said that it would be selling about 5,000 of its 133,000 vehicles to help generate cash.
Even after these adjustments, the group said, pro forma net assets would have been £185m or 262p a share at the end of January.
Profits for the year to April would be “significantly lower” than market expectations, the company confirmed on Wednesday.
In December Northgate stated that it would be cutting 380 jobs, 10 per cent of its total headcount, although further cuts.
In a statement covering trading since the October half year end up to Tuesday this week, Northgate said trading conditions had continued to worsen, with second-hand values of its fleet falling further in both the UK and Spain.
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1 Comment
How the mighty have fallen, its about time for years Northgate have been over charging for damage, taking £1,000 for re-charges and not repairing the fleet.
Everytime I have changed supplier in come Northgate and buy them up, Ember, Arriva and Hampsons to name a few and they take a great company and make it worse.
Maybe its time for customers to see big is not best – far from it
John C
February 26, 2009, 6:57 pm.
