12 May 2021
This announcement
contains price sensitive information
REDDE NORTHGATE
PLC
(“Redde Northgate” or the “Group” or
the “Company”)
Pre-close Trading
Update
Stronger than
expected performance with PBT ahead of consensus; entering new
financial year in a position of strength
Redde Northgate plc (LSE:REDD), the leading integrated mobility
solutions platform providing services across the vehicle lifecycle,
today announces a pre-close trading update for the year ended
30 April 2021, ahead of its results
for the year scheduled for 7 July
2021.
Group trading
Further to the interim results announcement on 8 December 2020, momentum has continued to build
across the Group in the second half of FY2021. Against the
backdrop of COVID-19, including the most recent lockdowns in the
UK, total closing VOH has grown 2% across the Group in the second
half, comprising 4% growth in UK&I, with Spain broadly flat. Closing VOH is now higher
than prior year by 13% in UK&I, 9% in Spain and 11% in the combined Group. The used
vehicle market has remained strong in LCVs (particularly in the UK)
delivering higher disposal profits than expected. Redde continued
to be impacted by reduced volumes through the period, but post the
easing of lockdown restrictions in early April, volume indicators
are now showing a significant pick up.
Based on unaudited results, underlying revenues (excluding
vehicle sales) were approximately 51% higher than the prior year,
and total Group revenues (including vehicle sales) were
approximately 43% higher than the prior year. The increase in
revenues year on year is primarily attributable to the inclusion of
Redde since the Merger on 21 February
2020, as well as LCV rental and sales growth.
As a consequence of the stronger than expected performance in
H2, the Board now expects underlying PBT for FY2021 to be
moderately above the top end of the current range of analyst
estimates[1] and not less than £92m.
Focus, Drive and
Broaden
The Group continues to make excellent progress on delivering its
strategic initiatives through the Focus, Drive and Broaden
framework. To date, it has achieved Merger integration savings of
£14.6m against the FY2022 target of £15m. Together with
additional permanent cost savings achieved of £4.2m, the total
annualised run rate is £18.8m, and is expected to be delivered at a
one-off cash cost of £2.5m against an original estimate of
£10m.
Cash flow and financing
The Group's financial position remains strong, with continuing
good cash flow generation in the period, closing the year with
substantial headroom under its debt facilities. From this position
of strength we have taken the opportunity post year-end to acquire
c2,000 vehicles from a Scottish vehicle rental business for
approximately £25m, bringing significant benefits from ongoing
customer relationships, which we would look to further strengthen
through our expanded Group offerings.
Outlook
With rental revenue and used LCV values supporting a strong
closing position to the financial year and Redde volumes showing a
strong rebound post lockdown restrictions easing in early April,
the Board is confident that the strategy it set out at the time of
the Merger will deliver the value it envisaged.
Commenting on the trading update, Martin
Ward, CEO Redde Northgate said:
“The second half of the year has delivered a strong set of
results. The demand for LCV rental and used LCV sales has seen an
uplift in H2 and sets the business up well going into our new
financial year. Traffic volumes and resultant mobility and repair
incidents continued to be suppressed throughout H2 but early
indications, post lockdown restrictions easing in early April, have
shown a strong bounce back as daily routines in mobility
resume.
“Our integration plans have almost delivered the revised targets
we set out on cost savings, well ahead of time, and well below the
one-time cash costs to implement. This has placed the business in a
strong position as we face into a number of opportunities to
deliver our unique integrated mobility platform proposition.
However, I recognise there is still much more to do to deliver the
full benefits of our strategy, and we remain focussed on our
strategic initiatives.
“I am particularly thankful to our people who have worked
tirelessly throughout the year to deliver exceptional service to
our customers. Many of our colleagues have taken up the SAYE share
scheme, launched this year, and it’s good to see they have the
opportunity to share in the future success of the business.
Our entry into the FTSE250 index in April was a milestone we
are all proud to have achieved.
“We enter FY2022 from a position of strength, and we look
forward to updating on progress as we continue to execute on our
strategy. ”
Notice of Results
The Group is planning to announce its preliminary results on
7 July 2021 and publish its Annual
Financial Report shortly thereafter.
For further information contact:
Buchanan
David Rydell/Jamie Hooper/Tilly
Abraham
+44 (0) 207 466 5000
Notes to Editors:
Redde Northgate is the leading integrated mobility solutions
platform providing services across the vehicle lifecycle. The
Company offers integrated mobility solutions to businesses, fleet
operators, insurers, OEMs and other customers across six key areas:
vehicle rental, vehicle disposal, vehicle ancillary services,
repairs, accident management and vehicle data.
The Company’s core purpose is to keep its customers mobile,
whether through meeting their regular mobility needs or by
servicing and supporting them when unforeseen events occur. With
its considerable scale and reach, Redde Northgate’s mission is to
offer a market-leading customer proposition and drive enhanced
returns for shareholders by creating value through sustainable
compounding growth. The Group aims to achieve this through
the delivery of its strategic framework of Focus, Drive and
Broaden.
Redde Northgate services its customers through a network and
diversified fleet of over 110,000 owned and leased vehicles,
supporting over 500,000 managed vehicles, with more than 170
workshop, body shop and rental locations across the UK,
Ireland and Spain and a specialist team of over 6,000
automotive services professionals.
Further information please visit the Company's website:
www.reddenorthgate.com
[1] Current range of analyst estimates for FY2021 underlying PBT
£83.3m to £88.0m