Northgate May Cut 200 Jobs to Cope With Slow Economic Recovery

Northgate Plc (NTG), the biggest provider of leased vans in Spain and the U.K., plans to cut 200 jobs this year as it reorganizes its business to cope with a subdued economic recovery.

“We are planning on the basis there will be less activity in the U.K.,” Chief Executive Officer Bob Contreras said in an interview. “I don’t think we have seen the true impact of public-sector spending cuts come through yet.”

The U.K. is starting the biggest squeeze on state spending since World War II to curb the public deficit. Spain is imposing the toughest austerity measures in three decades to convince investors it can avoid a European Union bailout.

Northgate’s net income in the year ended April 30 rose 20 percent to 29.4 million pounds ($47 million), or 21.7 pence a share, from 24.4 million pounds, or 22.8 pence, a year earlier. While revenue declined 4.7 percent to 537.3 million pounds, costs fell faster.

The shares rose as much as 3.3 percent in London trading, the most in eight weeks, and were up 8.8 pence, or 2.8 percent, at 318.6 pence at 9:10 a.m.

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net.

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