Shareholders in Northgate, the biggest van rental operator in the UK and Spain, must look back ruefully at the £12 a share offer tabled two years ago - and subsequently withdrawn after the biggest investors held out for more. Since then, the shares have fallen more than 70 per cent.

They dropped a further 6 per cent yesterday after the company cautioned that current-year pre-tax profits will be roughly the same as the £83 million just reported for the 12 months to April 30. That outcome - which had already been largely anticipated by the shares - means Northgate will miss its target of producing its third consecutive year of double digit earnings growth.

But even maintaining profits at current levels would appear challenging at a time of slackening demand and falling residual values - the sums it secures for selling its vans second-hand.

If times gets really tough, Northgate has the option of reducing its fleet - as it did in the early 1990s recession - which both brings in cash and reduces capital expenditure. That is a comfort given the company’s £894 million debt burden.

However, even though Northgate’s shares appear anomalously cheap - they trade at four times forward earnings and yield 9 per cent - the risk that its profit expectations remain too high gives reason to believe the shares could fall further still. Sell.

Times Recommends

• Bank slashes rates by 1% to historic low
• House prices fall at fastest pace in 25 years
• Dragons’ Den judge exits Woolworths bid race