Van hire specialist Northgate has reported stable fleet utilisation over the last quarter, in its latest update to the stock market.

In the UK, vehicle utilisation for the three months to 18 September averaged 89%, in line with that experienced in the year ended 30 April 2012. In Northgate’s other market, Spain, utilisation has remained at 90%, also in line with the previous period.

Of course, Darlington-based Northgate isn’t immune to the severe recession in Spain nor to the weak demand being generated by the UK’s stagnant economy. To maintain consistently high utilisation levels, it is gradually trimming its fleet size (as I reported in September last year).

Northgate has reduced its UK fleet from 52,900 to 50,900 since the 30th April 2012, with vehicles on hire decreasingly in a similar fashion, from 46,400 at 30 April 2012 to 44,800 at 18 September 2012 — a decrease of 1,600 units compared to a fall of 2,400 in the same period last year.

Luckily, the recession-induced fall in new van registrations since 2008 means that the market for good quality used vans is strong, something that Northgate is able to capitalise on by selling its de-fleeted vans through its van sales division, Van Monster.

Outlook: Looking for retail opportunities

Northgate says that despite the “challenging economic conditions”, it continues to trade in line with its expectations and is managing to reduce net debt and gearing while focusing on optimising the efficiency of its operations.

Although it has historically focused on the business market, it is now moving into the retail market, offering daily van rental services to private renters as well as trade customers. Its main van hire website — Northgate Vehicle Hire — has been updated to offer personal use options and the company is pushing its retail hire offering at all 60 of its UK branches.