Interim Results

Northgate PLC 11 January 2001 Contacts: Steve Smith, Managing Director Phil Moorhouse, Finance Director Tel: 020 7831 3113 (on 11/1/01) Northgate plc Tel: 01325 467558 (thereafter) www.northgateplc.com Peter Otero Tel: 020 7831 3113 Financial Dynamics NORTHGATE PLC Interim Results Northgate plc, the UK's leading specialist in light commercial vehicle hire, announces its interim results for the six months ended 31st October 2000. - Operating Profit up 17% to £21.6m (1999: £18.4m) - Pre-tax profits increased by over 13% to £13.9m (1999: £12.2m) - Earnings per share up 13% to 15.9p (1999: 14.1p) - Interim dividend declared at 4.4p per share, up 5% on last year - Vehicle Fleet increased by 15% to 34,750 (1999: 30,100). - New hire companies opened in Coventry, Stoke, Exeter and Dublin in addition to new branch openings in Norwich and Gloucester. Total group network now numbers 48 locations nationwide. Chairman Michael Waring comments: 'The continuing move towards outsourcing and the development of the home shopping trade confirms our view that the potential for growth in the light commercial vehicle rental market is significant. We look forward to the ongoing expansion of our business and remain confident in its long-term prospects.' CHAIRMAN'S STATEMENT During the past six months we have made good progress towards achieving the targets we set for the Company in the 5-year strategy for growth outlined in our annual report in 1999. We remain on track to achieve our goal of doubling the size of Northgate's business by the year 2003. Results Turnover is up by 25% to £153.5m (1999: £123.1m), with operating profits rising by 17% to £21.6m (1999: £18.4m). Pre-tax profits have increased by over 13% to £13.9m (1999: £12.2m) and earnings per share by a like amount to 15.9 pps (1999:14.1 pps). EBITDA for the six months to 31st October has increased by 19% to £86.9m. Our deferred income reserve, which represents money already earned and received from manufacturers, is now in excess of £54m and will be released to profits over the remaining life of the vehicles to which it relates. Dividend The Board has decided to declare an interim dividend of 4.4p (1999: 4.18p) per share, an increase of 5%. This will be payable on 16th February 2001 to shareholders on the register at close of business on 26th January 2001. Operational review Since the last financial year-end we have opened new hire companies in Coventry, Stoke, Exeter and Dublin and new branches in Norwich and Gloucester. The group's network now extends to 48 locations. Properties currently under negotiation should allow us to achieve our target of 12/15 new locations in the current financial year. The opening of the new locations and the demand for our rental product, NORFLEX, both from existing and new customers, has resulted in the fleet rising to 34,750 vehicles at 31st October 2000. The fleet mix remains constant with light commercial vehicles (up to 3.5 tonnes) still representing around 80% of the fleet Our tight control of the fleet continues with utilisation averaging 90% across the whole fleet, including all new depot and branch openings. In my last statement, I referred to the opportunity we had identified to improve hire rates. Having made some progress in this regard, we are optimistic that we can build upon this in the future. The benefit of the hire rate improvement already achieved has been offset by a continuing soft residual market which, when taken together with the ongoing investment in new locations, has held back operating margins. All Employee Share Scheme Our new all employee share scheme, which was approved by shareholders at the AGM in September, has now been successfully launched with over 25% of our employees making contributions out of their pay towards buying shares in the Company. We are delighted by the level of commitment shown by our employees. Outlook The continuing move towards outsourcing and the development of the home shopping trade confirms our view that the potential for growth in the light commercial vehicle rental market is significant. We look forward to the ongoing expansion of our business and remain confident in its long-term prospects. CONSOLIDATED PROFIT AND LOSS ACCOUNT Six Six Twelve months to months to months to 31.10.00 31.10.99 30.4.00 Notes (Unaudited) (Unaudited) £000 £000 £000 Turnover 1 153,546 123,085 260,794 Operating profit 1 21,645 18,440 37,942 Interest payable, net (7,789) (6,244) (13,617) Profit on ordinary activities before 13,856 12,196 24,325 taxation Tax on profit on 2 (4,240) (3,682) (7,429) ordinary activities Profit attributable to 9,616 8,514 16,896 shareholders Dividends - non-equity (13) (12) (25) preference shares - equity ordinary shares (2,679) (2,534) (8,014) Profit transferred to 6,924 5,968 8,857 reserves Earnings per ordinary 3 15.9p 14.1p 27.9p share - basic Diluted earnings per 3 15.8p 14.0p 27.8p ordinary share Dividend per ordinary 4.40p 4.18p 13.25p share All current and prior year trading relates to continuing operations SUMMARY CONSOLIDATED BALANCE SHEET 31.10.00 31.10.99 30.4.00 (Unaudited) (Unaudited) £000 £000 £000 Fixed Assets Vehicles for hire 348,957 319,983 331,588 Other tangible assets and 13,525 10,301 12,559 investments 362,482 330,284 344,147 Current Assets Stocks 8,245 4,339 5,827 Debtors 52,666 60,015 54,290 Investments 15 15 10 Cash at bank and in hand 16,772 11,476 15,509 77,698 75,845 75,636 Creditors : amounts falling due 123,122 103,226 108,166 within one year Net current liabilities (45,424) (27,381) (32,530) Total assets less current 317,058 302,903 311,617 liabilities Creditors : amounts falling due after more than one year 136,307 138,174 142,828 Provisions for liabilities 6,626 7,718 6,626 and charges Accruals and deferred income 54,074 47,134 49,359 120,051 109,877 112,804 Capital and reserves 120,051 109,877 112,804 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Six Six Twelve months to months to months to 31.10.00 31.10.99 30.4.00 (Unaudited) (Unaudited) £000 £000 £000 Profit for the period 9,616 8,514 16,896 Dividends (2,692) (2,546) (8,039) 6,924 5,968 8,857 Issue of ordinary share capital (net of expenses) 323 54 92 Net increase in 7,247 6,022 8,949 shareholders' funds Opening shareholders' funds 112,804 103,855 103,855 Closing shareholders' funds 120,051 109,877 112,804 CONSOLIDATED CASH FLOW STATEMENT Six Six Twelve months to months to months to 31.10.00 31.10.99 30.4.00 (Unaudited) (Unaudited) £000 £000 £000 Net cash inflow from operating 81,237 60,390 144,914 activities Returns on investments and servicing (7,793) (5,676) (13,079) of finance Taxation 1,480 43 (6,309) Capital expenditure (14,181) (40,785) (59,223) Equity dividends paid (5,498) (5,092) (7,659) Management of liquid resources 76 23 (9) Financing (55,983) (27,424) (73,073) Decrease in cash for the period (662) (18,521) (14,438) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Decrease in cash for the period (662) (18,521) (14,438) Decrease/(increase) in borrowings 16,928 (6,178) (421) Capital element of vehicle related 48,294 33,655 73,586 hire purchase payments Cash (withdrawn from)/placed on (76) (23) 9 deposit Change in net debt resulting from 64,484 8,933 58,736 cash flows New hire purchase obligations (72,170) (45,519) (99,656) Movement in net debt for the period (7,686) (36,586) (40,920) Opening net debt (213,736) (172,816) (172,816) Closing net debt (221,422) (209,402) (213,736) RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTITVITIES Operating profit 21,645 18,440 37,942 Depreciation 60,485 51,566 109,179 Increase in working capital (5,608) (12,824) (7,645) Other items - - 5 Movement in deferred income reserve 4,715 3,208 5,433 Net cash inflow from operating 81,237 60,390 144,914 activities Unaudited Notes 1. Segmental Analysis Turnover and operating profit arise exclusively from vehicle hire. 2. Tax The charge for taxation for the six months to 31st October 2000 is based on the estimated effective rate for the year. 3. Earnings per ordinary share The calculation of basic earnings per ordinary share in respect of the six months to 31st October 2000 is based on the profit attributable to equity shareholders of £9,603,000 (31.10.99 - £8,502,000) (30.04.00 - £16,871,000) and the weighted average of 60,557,282 (31.10.99 - 60,364,329) (30.04.00 - 60,405,822) ordinary shares in issue (excluding those shares held by an employee trust in connection with the Goode Durrant Long Term Incentive Plan). Diluted earnings per ordinary share have been calculated on the basis of the earnings described above and assume that 222,000 shares remaining exercisable under the Goode Durrant Share Option Scheme had been fully exercised at the commencement of the relevant period, such that the weighted average number of shares is 60,801,236 (31.10.99 - 60,789,290) (30.04.00 - 60,721,888) (including those shares held by an employee trust in connection with the Goode Durrant Long Term Incentive Plan). 4. Basis of preparation The interim results have been prepared on the basis of the accounting policies set out in the last annual report and accounts. The figures for the year ended 30th April 2000 are extracted from the audited accounts for that year which have been delivered to the Registrar of Companies, and on which the auditors issued an unqualified report and which did not include a statement under section 237(2) or (3) of the Companies Act 1985.

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