SHARES in van rental company Northgate slumped 13.64 per cent yesterday after the firm warned that its trading for the year to the end of April was worse than market expectations.
The FTSE-listed firm said it had cut its fleet by 1,000 vehicles since the end of October as rental volumes fell.
Northgate blamed economic turmoil in Spain and difficult conditions in the UK for the drop in hiring.
The company, which began operations in 1981 and rents vans out to engineering, distribution and retail companies, said vehicles on hire in its core UK market had fallen to 44,200 units at the end of February. The group opened a new outlet in Luton last month and plans to open a further branch at Brent Cross, taking its UK network to 64 sites. Its UK vehicles were out for hire 88 per cent of the time, down from 89 per cent over the summer and in line with expectations.
“Net debt and gearing continue to fall, and we remain focused on asset management, cash generation and cost control whilst seeking to maximise profitable growth where the appropriate return exists,” the company said in an update yesterday. The group said it plans to return its British business to growth, though it did not specify a target date, and said the tough economic conditions will affect trading.