Last week the company announced the acquisition of Record Rent A Car in Spain, one of the country’s leading rental providers, in a £95 million deal.
Record operates 18,000 vehicles and has 16 depots, with more than 2,300 corporate clients using its services.
Northgate already owns Fualsa, another leading rental firm, which it has expanded significantly in the past few years to operate 19,000 vehicles through its network of 15 locations.
Following the successful expansion into Spain from its main base of operations in the UK, where it operates more than 60,000 vehicles and 100 locations, there is further potential for massive growth.
Phil Moorhouse, managing director UK rental, said: ‘The light commercial vehicle parc in Spain is about three million units, yet just 1% of the market is rental, compared to 10% in the UK and 30% in the USA.
‘There is a huge amount of EU investment going into Spain, which will increase demand for rental there. We are already the number one rental company there.’
But he added that the company was already looking to Eastern Europe as a new area for expansion as it developed its new three-year plan.
Moorhouse said: ‘Currently 80% of our business comes from the UK, but I can see expanding European business making that about 65% in the next couple of years. ‘We will grow in Spain, but we are also looking at Eastern Europe.’
Northgate’s annual results, revealed this month, showed its current approach to business is working, with turnover up 28.9% to £458.3 million, while pre-tax profits were up 23.8% at £55.6 million.
Martin Ballinger, Northgate’s chairman, said: ‘The company is currently updating its strategy for growth and we will be building on Northgate’s past success to ensure that we continue to deliver progress through 2006 to 2009 and beyond.’
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