Rental giant Northgate posted a 19% increase in half year underlying profit, despite challenging market conditions in the UK and Spain.
Underlying pre-tax profit rose to £32.3m for the six months ended 31 October 2011 from £27m the same time a year before. Underlying revenue rose to £375.7m from £367.9m previously.
The UK and Spain focused specialist in light commercial vehicle hire, which is undergoing significant restructuring in response to the tough economic conditions, said it continues to trade in line with company expectations.
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Chairman Bob Mackenzie commented, "Tough economic conditions continue to affect both the UK and Spanish markets. Effective fleet management has contributed to ongoing reductions in net debt and fleet size, and in turn a strengthening of the Group's capital structure."
Underlying operating margins in the UK increased to 24% in the period, compared to 23.2% in 2010. Vehicles on hire fell from 53,800 at 30 April 2011 to 51,600 at 31 October 2011.
Looking ahead Northgate said it would further consolidate its 12 UK business areas to seven regions and simplify and reduce the costs of internal administration and finance through centralisation.
Its Spanish business continues to operate in an extremely difficult and uncertain environment, with customers in the construction sector suffering the most. Northgate said it has continued to diversify its customer base and exposure to this sector.
Underlying net debt reduced by £48.3m to £481.6m during the period.
No dividend payment has been recommended.
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