2 March 2009
ASSET IMPAIRMENT UPDATE
Northgate plc ("Northgate", the "Company" or the "Group"), the UK and Spain's leading specialist in light commercial vehicle hire, provides an update to its Interim Management Statement issued on 25 February 2009.
As indicated in the Interim Management Statement, the Board has been conducting a review of the Group's businesses. This review has now been completed and the Board has concluded that the values of those businesses, in both the UK and Spain, are impaired and can therefore confirm the amount of the impairment.
The result of this review is a non-recurring write-off of goodwill of £54m relating to the acquisition of the two businesses in Spain, along with £32m of goodwill in relation to the UK hire business. In addition, other assets of the Group (mainly the vehicle fleet in the UK and Spain) will be written down by £67m, net of tax. After these adjustments the Group's pro forma net tangible assets at 31 January 2009 would have been approximately £181m, equivalent to 256p per share.
From 1 March 2009, we will increase our rates of depreciation for new vehicles purchased to approximately 20% per annum in both countries, an increase of 1.5% in the UK and 3% in Spain.
For further information, please contact:
Northgate plc 01325 467558
Steve Smith, Chief Executive
Bob Contreras, Finance Director
Hogarth Partnership Limited 020 7357 9477
Notes to Editors:
Northgate plc rents light commercial vehicles and sells a range of fleet products to businesses via a network of hire companies in the UK, Republic of Ireland and Spain. Its NORFLEX® product gives businesses access to a flexible method to acquire as many commercial vehicles as they need, without tying up capital or entering a fixed term contract.
Further information regarding Northgate plc can be found on the Company's website: