Northgate Vehicle Hire’s parent firm Northgate plc reported what may be the first signs of its recovery today. In the firm’s most recent quarterly update, Northgate said that UK vehicles on hire had increased by 1,600 to 44,700, compared to 43,100 during the same period last year. This reverses a long-running trend that has seen the company reduce its fleet size in order to maintain stable utilisation and profitability as it has battled to reduce its debt pile.

Of the 1,600 additional vehicles on hire, 500 vehicles were based at new sites opened by the company, while the remainder were at existing sites, providing an encouraging indication of both organic growth and successful expansion.

The majority of Northgate’s business is with fleets and business customers — its vehicles don’t appear in our van hire price comparison results — and although Northgate’s vehicle hire business does serve retail customers directly, it’s not as well known as the major car rental brands, like Europcar.

Stable utilisation

The Darlington-based firm said that vehicle utilisation had averaged 88% during the last quarter, compared to 89% during the same period last year, but that utilisation returned to 89% in August, despite a modest increase in fleet size from 49,900 at 30 April 2013 to 50,600 currently. Underlying hire revenue per rented vehicle also edged higher, rising by 1% compared to the same period last year.

As you might expect, Northgate reported that used van sale prices remained strong during the last quarter, and were in-line with last  year’s prices.

Spanish growth

We’ve become conditioned to some modest signs of growth in the UK, but it was even more surprising to see that Northgate reported a similar set of results from recession-bound Spain. Although some of the gains were seasonal, Northgate said that utilisation rose to 92% in the period to 18 September 2013, compared to 90% for the same period last year. Northgate’s Spanish fleet also grew, from 35,100 at the end of April to its current level of 36,100.

Northgate plc operates the Norflex, Northgate Vehicle Hire and Van Monster businesses in the UK.