The vehicle hire firm said it had seen its fleet utilisation level fall from 90% to 88% in the four months to February 29, while vehicles on hire fell from 51,600 at October 31 to 47,700 on February 29. During the same period, Northgate’s fleet size decreased by 2,900 to 54,000.

A spokesman said: 'The reduction in vehicles on hire largely occurred towards the end of December and was due partly to the reduction in the level of our customers’ business activities as a direct consequence of the economic conditions.'

Northgate revealed that in the period it had around 1,000 vehicles returned from companies working in the utilities market.

As a result of the drop in vehicles on hire, Northgate sold 2,100 more vehicles than it normally would in the period, adding that ‘the used vehicle market continues to remain strong, with improved residuals compared to the same period in the previous financial year’.

Northgate also revealed that it has reduced its net debt from £530 million at April 30, 2011, t0 £415 on February 29, 2012. It has received a £12 million tax credit from HMRC after resolving discussions over an outstanding tax matter.

The spokesman added: 'The tough economic conditions continue to affect both our UK and Spanish markets, and we expect this to continue into the next financial year. As a result, the business is currently trading towards the lower end of the range of market expectations and management is taking a cautious view for 2013.'