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By Esha Vaish
(Reuters) - Northgate Plc posted a 49 percent rise in first-half profit, helped by higher demand for the vehicles it rents out and lower maintenance costs.
Shares of the company, which leases out light commercial vehicles to engineering, distribution and retail companies in the UK and Spain, rose as much as 6.7 percent.
The stock was among the top percentage gainers on the FTSE-250 Midcap Index.
Northgate said new van rental sites opened in the UK over the past couple of years helped attract customers. The company opened 11 sites over the past two years, taking its total number of sites in the country to 73.
Northgate expects to open 17-20 more sites in the UK over the next two years, Chairman Bob MacKenzie told Reuters. The country accounts for more than two-thirds of the company's revenue.
Two of the new sites will be in London, while the remaining will be in the metropolitan districts of Manchester, Birmingham and larger towns around the UK, MacKenzie said.
Northgate said demand for its vans was rising ahead of Christmas as distribution companies were rushing to fulfil online orders for clothing, electronic items and other gifts.
"There's a requirement for vehicle delivery to support the internet growth," MacKenzie said.
Northgate's growth has been more sure-footed in the UK, where improving consumer confidence and record low interest rates are encouraging companies to raise their capital expenditure and rebuild inventories.
Total vehicle hire revenue from the UK rose 6.1 percent to 154 million pounds in the first half.
The company said its performance so far this year was slightly better than market consensus, but it did not provide any numbers.
"Forecast upgrades ahead of the Christmas shutdowns are something of a rarity for Northgate, which is a measure of management's confidence at this stage," N+1 Singer analyst James Tetley wrote in a note.
Numis Securities analysts raised their full-year forecast for pretax profit by 8 percent to 78.9 million pounds, after expenses related to software.
Northgate said underlying pretax profit rose to 47.8 million pounds in the six months ended Oct. 31 from 32 million pounds, a year earlier.
Revenue rose 5.6 percent to 305 million pounds.
The Darlington-based company's shares were up 4.7 percent at 510 pence at 1051 GMT on the London Stock Exchange.
(Editing by Robin Paxton and Kirti Pandey)