Hitachi Capital Vehicle Solutions (HCVS)
reported a rise in turnover of 3.77% to £108.9m in the year to 31
March 2010.

The company’s non-consolidated results showed
profits after tax more than tripled to £8.1m in the year to 31
March 2010, up 324% from £1.9m in 2009. It put the rise in profit
after tax down to lower finance costs and higher operating profit,
and a significant recovery in the used car market, driven by a
shortage of stock.

James Worraker, head of finance at HCVS, said:
“It’s relatively straightforward. In 2008, the whole market saw a
drop in used vehicles which meant HCVS needed to make impairment
provisions for the future disposal of leases. That had a big impact
on results. But when we moved into 2009-10, profits improved back
to levels seen in previous years.”

The recovery in the used car market meant less
provisioning was required, providing a further boost to profit. The
rise in profit was also linked to the acquisition of
Aylestone-based Robinsons Garage, which provides cars to driving
instructors under contract hire agreements.

“In 2008, we only had three or four months’
contribution from the acquisition, but in 2009-10, we had the full
year benefit,” Worraker said

The company also reduced its head count and
implemented stricter cost controls.

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Worraker said: “We’re continuing to focus on
directing resources to provide excellent services to

Commercial vehicles were a source of growth with
additional business gained from Centrica, Apetito, Sainsbury’s and
Southern Water. The company will continue to focus on the
specialist commercial vehicle and corporate contract hire

Worraker added that business had also been written
with telecoms giant O2 and A&N Media, the consumer division of
Daily Mail & General Trust, in the last 12 months. Looking to
the future, he said government cutbacks in public sector spending
were likely to have an impact on business.

“The cutbacks will affect two sections of our
customers – obviously our customers in the public sector will be
directly affected and also those who supply the public sector. We
have to monitor that and be wary of it. It’s not that we think
there will be undue risk, but it may have an impact on growth,”
Worraker said.

New business volumes in 2009-10 fell to £109m, down
9.17 percent from £119m a year earlier. HCVS nevertheless continued
to win new business in the public sector with additional business
coming from the Environment Agency and the Audit Commission.

Worraker remained confident for the future, saying
that the company is well positioned to cope with future challenges
thanks to its continued access to funding from Hitachi Capital UK,
a strong customer base, and its “motivated and capable staff”.

HCVS provides vehicle management solutions for
company cars and commercial vehicles.