UK and Spanish economies put block on dividends from Northgate

Northgate, the biggest van rental business in the UK and Spain, today said economic conditions in both countries meant it could not yet return to paying dividends.

"The board debated the dividend issue long and hard," said chairman Bob Mackenzie.

"On balance it decided it is not yet prudent to pay one.

"The company is facing difficult economic conditions in both the UK and Spain."

Northgate was hit by a massive profits slump and rights issue just over a year ago.

Today it said headline profits rose 33% to a better than expected £36.5 million.

Mackenzie said the UK fleet had been cut by 2000 to 60,900 vehicles and said he would not hesitate to cut it further if demand failed to pick up.