LONDON (ShareCast) - Shares in commercial vehicle hire group Northgate slid 7% on Tuesday morning despite preliminary results that came in ahead of market expectations.
Investor caution was due to currency headwinds and the future unwinding of vehicle depreciation charges over the next three years.

On revenues up 7% to £614.3m in the year to 30 April, underlying operating profit gained 35% on the previous year to £97.8m, helped by an £11.4m benefit from a change in vehicle depreciation rates and a £2.6m adverse effect from the weakening euro
Excluding the impact of the change in depreciation rates operating profits grew 19%, or 23% if excluding both depreciation and forex.

But the unwinding of depreciation rates will see a £5.9m operating profit hit in the new financial year, £10.3m in 2017 and £13m in 2018.

Profits before tax were 62% higher at £83.0m, with underlying basic earnings per share increased 45% to 51.0p and the dividend was raised by the same degree to 14.5p.

An increased focus on small and medium (SME) customers rather than national accounts, leading to lower mileage and fewer repairs, together with the increasing proportion of sales through retail outlets (31% in the UK and 16% in Spain) has helped improve residual values and capture more profits on disposal.

Utilisation rates in the UK and Spain were essentially flat at 88% and 91% but tight cost control has meant that maintenance costs have risen by only 2% versus fleet growth of 8%.


Shares in Motive Television plunged on Tuesday after the digital television technology group reported an increase in losses for 2014.

Full-year revenues declined 2.4% to £1.14m and losses before tax jumped to £12.5m from £3m the year before.

The company said sale levels were flat as it focused on developing activity, while costs increased as distribution channels and manufacturing resources were established.

Digital revenues also fell 19% to £645,871 and losses rose 42% to £1.3m as costs rose in preparation for the commercial launch of new products.

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