RNS Number:2059U
Northgate PLC
14 January 2004

                                                                 14 January 2004


                                 NORTHGATE PLC


                    INTERIM RESULTS FOR THE SIX MONTHS ENDED
                                31 OCTOBER 2003

Northgate plc ("Northgate", the "Group" or the "Company"), the UK's leading
specialist in light commercial vehicle hire, announces its interim results for
the half year ended 31 October 2003.

Highlights:

  * Turnover* increased by 16.8% to #186.5m (2002: #159.7m)

  * Pre-tax profit up by 19.0% to #22.4m (2002: #18.8m)

  * Earnings per share up by 17.8% to 25.1p (2002: 21.3p)

  * Dividend** increased to 7.0p (2002: 4.9p)

  * Fleet size of 45,700 vehicles in the UK and 13,500 vehicles in the Fualsa
    joint venture (Spain)

  * Fleet utilisation remains at 90%

  * Excellent pre-tax profit contribution from Fualsa joint venture


* Excluding the contribution from the Fualsa joint venture

** Reflecting realignment of interim and final dividends referred to in attached
statement


Michael Waring, Chairman, commented:

"I am pleased to report that we have made an excellent start on delivering our
three year Strategy for Growth outlined in our 2003 Report and Accounts
published in July 2003.

Despite challenging market conditions during the summer, we have again
demonstrated the robust nature of our business model by delivering increased
turnover, profits and earnings per share.

Our Spanish investment, Fualsa, continues to exceed our expectations and it is
highly probable that we will exercise our right to purchase a further 40% of the
equity in this business by 31 May 2004.

Our primary focus, as ever, remains the UK.  We continue to believe that the UK
market offers excellent potential for growth and we intend to invest further in
new locations to provide the structure to support our planned increase in the
total fleet size.

Overall, we are confident of the outcome for the full financial year."

Full statement and results attached.

For further information, please contact:

Northgate plc                                          01325 467558
Steve Smith, Chief Executive
Gerard Murray, Finance Director

Hogarth Partnership Limited                            020 7357 9477
Andrew Jaques
Tom Leatherbarrow

Notes to Editors:

Northgate plc rents light commercial vehicles and sells a range of fleet
products to businesses via a network of hire companies. Their NORFLEX product
gives businesses access to a flexible method to acquire as many commercial
vehicles as they require.

Further information regarding Northgate plc can be found on the Company's
website:

http://www.northgateplc.com


Introduction

As announced in our 2003 Report and Accounts published in July 2003, we have
embarked on a further Strategy for Growth with specific targets in place for the
three years ending April 2006.   The increase in earnings per share of 17.8% to
25.1p (2002-21.3p) for the period on which we are reporting represents an
excellent start.   Once again, our business model has demonstrated its robust
nature in dealing with the challenging market conditions that were experienced
during the summer and to which I specifically referred in my trading statement
at the time of our AGM in September 2003.   In addition credit is due to
management for taking prompt action through concerted marketing combined with
cost reductions, whilst at the same time ensuring that hire rates and our policy
of maintaining fleet utilisation were not compromised.

Results

Turnover (excluding the contribution from the Spanish joint venture, Fualsa)
increased by 16.8% to #186.5m (2002 - #159.7m).

Profit before tax increased by 19.0% to #22.4m (2002 - #18.8m) and before
goodwill amortisation by 17.2% to #22.5m (2002 - #19.2m).

Earnings per share increased by 17.8% to 25.1p (2002 - 21.3p).

The Group's UK businesses reported an operating margin of 15.0% (2002 - 15.9%).
This reduction in operating margin was solely driven by the turnover mix of the
Group.  Hire company turnover increased by 5.2% and turnover from the sale of
used vehicles by 51.5%.  Turnover from used vehicle sales generates the lowest
operating margin for the Group and consequently any increase in this turnover in
excess of the increase in hire turnover has the effect of reducing the Group's
overall operating margin.   The operating margin of the hire companies increased
to 20.7% (2002 - 19.8%).  We continually strive to increase our efficiencies and
would expect further margin improvement in our hire companies in the future.

The Group's share of Fualsa's operating profit for the six months increased to
#2.2m as against #0.8m in the comparative period: the latter period, however,
represented only four months of trading following the Group's initial investment
in July 2002.  This strong performance has been achieved in part as a result of
fleet growth and the operational gearing benefit of higher volumes across a
relatively stable cost base.  This figure does include, however, non-recurring
profits estimated to be #0.57m (2002 #0.20m) on the disposal of vehicles
acquired prior to 1 January 2001 to which historically excessive depreciation
rates had been applied.  Depreciation rates complying with revised fiscal
legislation have been applied to vehicles purchased since 1 January 2001 and
have resulted in more sensible levels of profit per unit on disposal, similar to
those generated in the UK.

Fualsa's total debt at 31 October 2003 of Euro116m is ahead of expectations but the
increase arises almost entirely from funding the excellent fleet growth during
the period.

The Group's total gearing, which excludes Fualsa's debt, has reduced to 164.9%
(2002 - 189%) reflecting the cash generative characteristics of the Group's
operating model.  Interest cover is 3.8 times (2002 - 3.6 times).  If it were
assumed that the Group's option to acquire an additional 40% of Fualsa's share
capital had been exercised at the maximum consideration of Euro22.3m and paid in
cash on 31 October 2003, the resulting consolidated balance sheet of the Group
would have gearing of 223% on a pro-forma basis.

Dividend

The Company's dividend payments to shareholders have historically been proposed
broadly on the basis of 30% of the total being paid as an interim and 70% as a
final.  The Board has noted that a larger proportion of listed companies of a
comparative size have a dividend profile that is nearer to a 40% interim and a
60% final.  The dividend proposals for this year and subsequent years will aim
to move closer to this market practice.

The Board has therefore declared an interim dividend of 7.0p (2002 - 4.9p) per
share, payable on 13 February 2004 to shareholders on the register at the close
of business on 23 January 2004.

Operational Review

United Kingdom and Republic of Ireland

In the period from 1 May to 31 August 2003, as a result of weaker growth in the
economy and stronger competition, we reduced the fleet from 45,000 vehicles at
30 April 2003 to just over 44,000 at the end of August. This was done in order
to comply with our policy of achieving utilisation levels of 90%.  Since the
start of September 2003, however, through a combination of concerted marketing,
which has reconfirmed in the mind of many users the considerable benefits of our
hire product , Norflex, and an improved business climate, demand has returned to
more normal levels and fleet growth has resumed such that, at 31 October 2003,
the vehicle fleet had reached 45,700 vehicles.

In order to compensate for the lower than expected growth in the summer of 2003,
the Group's cost base was reviewed with the aim of securing savings through
operational efficiencies.  As part of this process, a decision was taken to
defer the opening of some new locations in the short term.

We remain confident in our ability to continue to grow the rental fleet and
expand the network in the UK and thereby achieve the targets set in our Strategy
for Growth.

Hire rates remained relatively stable over the period, reflecting the Group's
resistance to discounting rates in order to maintain fleet growth.

These factors have combined to produce the increase in the underlying operating
margin of hire companies to 20.7% (2002 - 19.8%).

Our depreciation policy, when combined with improved marketing and a stable
residual market, has led to a similar level of contribution per vehicle from our
vehicle sales activities as in the prior period but, on account of the
significant increase in vehicle units sold during this period, the overall
contribution from this division has increased compared to 2002.

Continental Europe

Fualsa, our joint venture in Spain, continues to perform strongly.

Since 1 May 2003, the fleet has grown by 12.5% to reach 13,500 vehicles at 31
October 2003. This represents growth of 25% on the comparative fleet size at 31
October 2002.   During the past twelve months, the network has been expanded to
eight hire sites with new locations in Malaga and Barcelona.  Additional
properties have now been acquired for new hire sites in Madrid (North) and
Santander.  Utilisation at 88.4% is close to the UK average.

The excellent performance of the Fualsa business and the considerable long-term
potential that exists highlight the quality of this investment.  It is highly
probable therefore, that the Group will exercise its option to purchase a
further 40% of the equity in Fualsa by 31 May 2004.  Based on the expected
result for Fualsa for the year to 31 December 2003, it is likely that the
consideration to be paid in exercising this option will reach the maximum
payable under the terms of the purchase contract of Euro22.3m.

The exercise of this option will obligate the Company to acquire the remaining
20% of Fualsa's share capital prior to 31 May 2006.  The amount payable for this
remaining 20% is dependent on the average profits after tax for calendar years
2004 and 2005: however, the maximum consideration payable is Euro14.9m.

Northgate Vehicle Solutions Limited

As outlined in the Operational Review in our last annual report, we continue to
develop a number of complementary non-rental products both to produce a
contribution to profitability and to differentiate us from our competitors.  We
are particularly pleased to report that this division has recently installed its
1,000th telematics product, Vehicle Insight, just over a year since its initial
launch.

Current Trading and Outlook

Trading for the Group since the end of the period has been good and the Board is
confident of the outcome for the full financial year.

The continued focus on UK growth opportunities and the prospect of an increased
contribution from Fualsa as a subsidiary undertaking give the Board the
confidence to reaffirm the objective announced in July 2003, of seeking to
achieve double-digit annual earnings growth in the period to 30 April 2006
through the successful implementation of our Strategy for Growth.

Michael Waring
Chairman



Consolidated Profit and Loss Account
for the six months ended 31 October 2003
                                                                    Six months        Six months              Year
                                                                   to 31.10.03       to 31.10.02        to 30.4.03
                                                                   (Unaudited)       (Unaudited)         (Audited)
                                                      Notes               #000              #000              #000
Turnover
Continuing operations                                     1            186,532           159,712           337,875
Joint venture                                                           11,848             5,074            14,514
Turnover : Group and share of joint venture                            198,380           164,786           352,389

Less : share of joint venture's turnover                              (11,848)           (5,074)          (14,514)

Group turnover                                                         186,532           159,712           337,875


Cost of sales                                                        (137,819)         (114,932)         (250,213)

Gross profit                                                            48,713            44,780            87,662

Administrative expenses
 - general administrative expenses                                    (20,645)          (19,015)          (38,999)
 - goodwill amortisation                                                  (38)             (343)             (384)
Total administrative expenses                                         (20,683)          (19,358)          (39,383)

Group operating profit - continuing operations            1             28,030            25,422            48,279

Share of joint venture's operating profit                 6              2,228               833             2,817
Amortisation of goodwill on joint venture investment      6              (118)              (78)             (197)

                                                                        30,140            26,177            50,899

Profit on disposal of property                                               -                 -               736
                                                                           

Income from fixed asset investments                                        202                 -               231

Interest payable, net     - group                                      (7,307)           (7,046)          (14,415)
                          - joint venture                 6              (641)             (312)             (848)

Profit on ordinary activities
before taxation                                                         22,394            18,819            36,603

Tax on profit on ordinary activities - group              2            (6,668)           (5,764)          (11,004)
                                     - joint venture      6              (446)             (130)             (493)

Profit for the financial period                                         15,280            12,925            25,106
Dividends - non equity preference shares                                  (13)              (13)              (25)
                 - equity ordinary shares                              (4,233)           (2,965)           (9,711)

Profit transferred to reserves                                          11,034             9,947            15,370


Earnings per Ordinary share - basic                       3              25.1p             21.3p             41.4p

Diluted earnings per Ordinary share                       3              25.0p             21.2p             41.2p

Dividends per Ordinary share                                             7.00p             4.90p             16.0p



Consolidated Balance Sheet
31 October 2003
                                                                       31.10.03          31.10.02           30.4.03
                                                                    (Unaudited)       (Unaudited)         (Audited)
                                                       Notes               #000              #000              #000
Fixed assets
Intangible assets                                                         1,344             1,362             1,382
Tangible assets
  Vehicles for hire                                                     374,325           360,728           366,976
  Other fixed assets                                                     23,271            20,650            21,574
Investments                                                                 775             1,071               409

                                                                        399,715           383,811           390,341


Investment in joint venture:
  Share of gross assets                                                  45,823            27,731            38,450
  Share of gross liabilities                                           (37,250)          (21,897)          (30,898)
  Goodwill on investment less amortisation                                4,411             4,597             4,529
                                                                         12,984            10,431            12,081

Total fixed assets                                                      412,699           394,242           402,422


Current assets
Stocks                                                                    9,666             9,155            10,328
Debtors                                                                  62,141            62,446            57,270
Cash at bank and in hand                                                 22,787            23,342            31,545

                                                                         94,594            94,943            99,143


Creditors: amounts falling due within one year                          181,940           172,644           185,758


Net current liabilities                                                (87,346)          (77,701)          (86,615)


Total assets less current liabilities                                   325,353           316,541           315,807
Creditors: amounts falling due after more than
  one year                                                              154,005           163,235           155,592
Provisions for liabilities and charges                                    7,005             6,292             7,005


                                                                        164,343           147,014           153,210


Capital and reserves
Called up share capital                                                   3,550             3,542             3,545
Share premium account                                                    45,854            45,491            45,635
Revaluation reserve                                                          23                23                23
Merger reserve                                                            4,721             4,721             4,721
Profit and loss account                                                 110,195            93,237            99,286


Shareholders' funds                                        5            164,343           147,014           153,210


Attributable to equity shareholders                                     163,843           146,514           152,710
Attributable to non-equity shareholders                                     500               500               500

                                                                        164,343           147,014           153,210



Consolidated Cash Flow Statement
for the six months ended 31 October 2003
                                                                   Six months         Six months               Year
                                                                  to 31.10.03        to 31.10.02         to 30.4.03
                                                                  (Unaudited)        (Unaudited)          (Audited)
                                                     Notes               #000               #000               #000

Cash inflow from operating activities                 4(i)             74,553             68,387            150,896

Returns on investments and servicing of finance                       (7,157)            (6,864)           (13,847)

Taxation                                                              (4,490)            (4,982)           (11,869)

Capital expenditure and financial investment
  Purchase of vehicles for hire                                     (113,725)          (106,261)          (216,858)
  Sale of vehicles for hire                                            58,280             39,911             95,341
  Other items, net                                                    (3,657)            (2,973)            (3,457)

Net cash outflow from capital expenditure
   and financial investment                                          (59,102)           (69,323)          (124,974)


Acquisitions                                                                -           (14,212)           (14,672)
                                                                            

Equity dividends paid                                                 (6,754)            (6,275)            (9,240)

Cash outflow before use of liquid resources
   and financing                                                      (2,950)           (33,269)           (23,706)

Management of liquid resources
 Cash withdrawn from (placed on) deposit                                   18                 62              (191)

Financing
  Issue of Ordinary shares (net of expenses)                              224                 20                167
  (Decrease) increase in borrowings                                     (804)              3,080            (7,226)
  Capital element of vehicle related hire purchase payments         (116,910)           (75,385)          (170,458)
  Cash inflow from new vehicle related hire purchase agreements       102,260             96,925            199,254


Net cash (outflow) inflow from financing                             (15,230)             24,640             21,737


Decrease in cash for the period                                      (18,162)            (8,567)            (2,160)




Reconciliation of Net Cash Flow to Movement in Net Debt

                                                                 Six months         Six months                Year
                                                                to 31.10.03        to 31.10.02          to 30.4.03
                                                                (Unaudited)        (Unaudited)           (Audited)
                                                                       #000               #000                #000

Decrease in cash for the period                                    (18,162)            (8,567)             (2,160)
Financing
  Decrease (increase) in borrowings                                     804            (3,080)               7,226
  Capital element of vehicle related hire purchase                  116,910             75,385             170,458
payments
  Cash inflow from new vehicle related hire purchase              (102,260)           (96,925)           (199,254)
agreements
  Cash (withdrawn from) placed on deposit                              (18)               (62)                 191

  Change in net debt resulting from cash flows                      (2,726)           (33,249)            (23,539)
  Hire purchase agreements acquired with subsidiary                       -           (11,547)            (11,547)
undertakings
  Foreign exchange differences                                           52                  -               (393)

Movement in net debt for the period                                 (2,674)           (44,796)            (35,479)

Opening net debt                                                  (268,378)          (232,899)           (232,899)

Closing net debt                                                  (271,052)          (277,695)           (268,378)



Statement of Total Recognised Gains and Losses
for the six months ended 31 October 2003

                                                                  Six months         Six months               Year
                                                                 to 31.10.03        to 31.10.02         to 30.4.03
                                                                 (Unaudited)        (Unaudited)          (Audited)
                                                                        #000               #000               #000

Profit for the financial period                                       15,280             12,925             25,106
Foreign exchange differences                                           (125)                  -                626
                                                                      15,155             12,925             25,732


Unaudited Notes

1. Segmental Analysis

All trading activities relate to the business of vehicle hire.  The Group 
operates in all material respects in the United Kingdom and Republic of Ireland 
and turnover relates to customers in the United Kingdom and Republic of Ireland.  
The joint venture operates in all material respects in Spain.

2. Tax

The charge for taxation for the six months to 31 October 2003 is based on the 
estimated effective rate for the year.

3. Earnings per share

The calculation of basic earnings per Ordinary share in respect of the six 
months to 31 October 2003 is based on the profit attributable to equity 
shareholders of #15,267,000 (31 October 2002 - #12,912,000) (30 April 2003 - 
#25,081,000) and the weighted average of 60,809,093 (31 October 2002 - 
60,627,899) (30 April 2003 - 60,646,882) Ordinary shares in issue (excluding 
those shares held by an employee trust in connection with the Goode Durrant Long 
Term Incentive Plan and the All Employee Share Scheme).

Diluted earnings per Ordinary share have been calculated on the basis of 
earnings described above and assume that nil shares (31 October 2002 -154,500) 
(30 April 2003 - 102,000) 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 60,947,057 
(31 October 2002 - 60,911,999) (30 April 2003- 60,893,447) (including those 
shares held by an employee trust in connection with the Goode Durrant Long Term 
Incentive Plan and the All Employee Share Scheme).

4. Notes to the Consolidated Cash Flow Statement

(i) Reconciliation of operating profit to net cash inflow from operating 
    activities
                                                                                                                        
                                    Six months    Six months           Year
                                   to 31.10.03   to 31.10.02     to 30.4.03
                                    (Unaudited)   (Unaudited)      (Audited)

                                          #000          #000           #000

Group operating profit                  28,030        25,422         48,279
Depreciation                            48,706        48,732         99,691
Goodwill amortisation                       38           343            384
(Profit) loss on sale of 
equipment and other fixed assets            (1)          (50)             3
Decrease (increase) in stocks              659          (958)        (2,124)
Increase in debtors                     (4,773)       (5,685)        (1,557)
Increase in creditors                    1,894           583          6,220

Net cash inflow from operating 
activities                               74,553       68,387        150,896

5. Reconciliation of movements in shareholders' funds

                                                                Six months       Six months             Year
                                                               to 31.10.03      to 31.10.02       to 30.4.03
                                                               (Unaudited)      (Unaudited)        (Audited)
                                                                      #000             #000             #000

Profit for the financial period                                     15,280           12,925           25,106
Dividends                                                          (4,246)          (2,978)          (9,736)
                                                                    11,034            9,947           15,370
Issue of Ordinary share capital (net of                                224               20              167
expenses)
Foreign exchange differences                                         (125)                -              626
                                                                    11,133            9,967           16,163

Opening shareholders' funds                                        153,210          137,047          137,047

Closing shareholders' funds                                        164,343          147,014          153,210



6. Joint Venture
                                                                Six months       Six months             Year
                                                               to 31.10.03      to 31.10.02       to 30.4.03
                                                               (Unaudited)      (Unaudited)        (Audited)
                                                                      #000             #000             #000

Share of operating profit                                            2,228              833            2,817
Share of interest payable, net                                       (641)            (312)            (848)

Contribution to profit before taxation                               1,587              521            1,969

Share of tax on profit on ordinary activities                        (446)            (130)            (493)

Contribution to profit after tax                                     1,141              391            1,476

Amortisation of goodwill on joint venture                            (118)             (78)            (197)
investment

Contribution to profit for the financial period                      1,023              313            1,279


7. Basis of preparation

The results have been prepared on the basis of the accounting policies set out 
in the last annual report and accounts.

The results for the year to 30 April 2003 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.







                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

IR GUUBWGUPCPGW