Northgate steps up a gear in Spain

VAN rental group Northgate took another big bet on the expanding Spanish market today with the £95m acquisition of a rival to nearly double the size of its Iberian operations.

Northgate, one of the stellar stock performers in London over the past 12 and 24 months, said it is acquiring Record Rent, a £55m-a-year turnover business to go alongside its existing Fualsa business, which last year had sales of £73m.

Northgate is paying for Record Rent in two tranches with the last £57m expected to be paid next May after finalisation of the group's accounts.

But Northgate warned the weaker market in the sale of second-hand motors in the UK could hold back profit growth this year.

Reporting strong results for the year to 30 April, with underlying pre-tax profits up 24% at £55m on sales £100m larger at £458m and a dividend up 13% at 20p, chairman Martin Ballinger said the business should still progress despite 'the softer residual market and perceived weakness in the UK economy'.