Commercial vehicle hire firm Northgate, which specialises in providing flexible medium- and long-term hire to business customers, is planning to open up to 20 new branches in the UK over the next three years.

Darlington-based Northgate said that based on industry-standard drive times, its existing 65-branch network covers around 60% of the UK. The firm said that it had identified a number of areas where coverage was poor, especially in London and the south of England.

Northgate now plans to open six to eight sites within the London area over the next 12 months. The firm estimates that the sites will take three years to reach maturity, and will eventually operate a fleet of approximately 500 vehicles per site.

UK turnaround?

Northgate has had a difficult time over the last few years, and the firm has been forced to shrink its UK van hire fleet in order to maintain utilisation rates, as demand has declined.

In its full-year results last week, Northgate said that its UK fleet had been cut from 52,900 to 49,900 over the last year, during which time fleet utilisation had dropped from 88%, from 89% in 2012.

The firm, which reported a pre-tax loss of £11.4m last year, due to restructuring charges, said that its immediate target was a return to 2012 utilisation levels, but emphasised that its underlying business remains profitable and is delivering returns above the company’s cost of capital.