VAN hire group Northgate has created 200 North East jobs after cutting its debts and nearly doubling its annual profit.
The group, which operates fleets in the UK and Spain, has opened a second office at its County Durham base as part of the shake-up of the business, which is now almost complete.
Chief executive Bob Contreras said: “We have centralised administration and finance and opened a second office in Darlington.
“We have employed an extra 200 people in the North East this calendar year. It is a vote of confidence in the North East for us.” The Darlington-based group saw its share price leap by 16% to 207p yesterday after posting a jump in its bottom line to £46m from £26.5m a year ago despite seeing a 1.2% fall in revenues to £706.7m. Net debt fell by £158.6m to £371.3m and Northgate announced a full-year dividend of 3p per share.
Contreras said: “Most of the turnover reduction was in Spain, where there was a 10% reduction in the fleet. It recognises the fact we’re dominated not by top-line turnover but by profitability.
“Essentially we had a period of three or four years where debt reduced substantially. It’s a sign of confidence in the business going forward.
“In the four years since I’ve been here, debt has reduced by more than £500m.”
The reorganisation of Northgate into one brand is now substantially complete and the group is now poised for a fresh growth spurt, despite what Contreras called “turbulent” economic conditions.
“It’s now bedding in and we are building and rebranding as a national company in the UK,” he said.
“We were invisible to many small local businesses in the UK and Spain. I am always embarrassed when they have never heard of Northgate. We have one brand in Spain. In the UK, we had 20-plus brands and now we have one.
“We’ve had a number of senior management changes. The restructuring is complete and we are ready to grow.
“In both territories, it clearly will be difficult. In the UK, we see opportunities through improvements to our commercial offering.
“Over the next couple of years, there are geographical gaps we will be seeking to fill.”
And despite the double-dip recession, Contreras is confident the business is well poised for growth.
“From our perspective, whether we flip in and out of recession is not a driver,” he said. “I haven’t noticed in the UK things changing in the last couple of months. In the UK, there are opportunities to grow, in Spain, we hope to arrest decline in growth.”