Redde Northgate PLC Board Changes & Covid-19 Business Update (2914H)
March 24 2020 - 3:00AM
UK Regulatory
TIDMREDD
RNS Number : 2914H
Redde Northgate PLC
24 March 2020
REDDE NORTHGATE PLC
("Redde Northgate" or the "Group" or the "Company")
Board Changes & Covid-19 Business Update
Board Changes
Redde Northgate (LSE: REDD) today announces that, following the
completion of the merger of Redde Plc and Northgate Plc on 21
February 2020, it is now consolidating the number of Board members
as outlined in the Circular dated 12 December 2019. Consequently,
Bill Spencer, Claire Miles and Fernando Cogollos will be leaving
the Board as Non-Executive Directors with immediate effect.
Mark Butcher will become the Audit Committee Chairman and John
Davies will take over the role of Remuneration Committee Chairman
with immediate effect. John Pattullo will continue as Senior
Independent Director, and Mark McCafferty and Stephen Oakley will
continue as Non-Executive Directors.
Avril Palmer-Baunack, Non-Executive Chairman of Redde Northgate
commented:
"I would like to thank Bill, Claire and Fernando for their
contribution to Northgate during their time on the Board, and
particularly for their support during the merger with Redde plc. We
wish them well for the future."
Covid-19 Business Update
Until the end of February, trading for the Group was in line
with market expectations for the year and good progress has been
made on the early stages of the integration. However, given the
rapidly evolving Government response in the UK and Europe, and the
impact this may have on our customers, it is too early to have any
certainty on how this may affect our financial performance for the
year ended 30 April 2020 and following financial year.
Consequently, the Group is suspending all forward guidance until
circumstances surrounding COVID-19 become clearer. Alongside our
focus on the health, safety and well-being of our staff, we are
taking steps to conserve cash to enable the Group to withstand a
prolonged downturn should global issues persist.
As at the end of February 2020 the Group had GBP200m of headroom
on its bank facilities, including those acquired from Redde. The
Group's banking covenants have sufficient headroom, the most
restrictive is the 3.0x interest cover ratio providing GBP40m of
EBIT headroom as at the end of February 2020. Cash recovery from
both Northgate customers and Redde insurers has continued without
significant disruption.
Whilst the balance sheet is strong, the Group has put in place a
number of measures to further conserve cash. The Group's most
significant area of spend is on new vehicles and we have put
procedures in place limiting this spend to essential purchases only
to meet immediate customer demand, and in the event of a sustained
period of crisis we have the ability to age the fleet further.
Following the merger, integration plans have started well with a
new Group Management team being appointed for the UK & Ireland
businesses and continuity of the Northgate Spain leadership team. A
number of integration plans are already underway including cost
control procedures to address areas of discretionary spend, fleet
and branch integration, removal of contractors and the assessment
of other synergy benefits. More detail on this will be provided in
due course.
Martin Ward, CEO Redde Northgate said:
"Our people are the cornerstone of everything we do, and firstly
I thank them for their efforts during these unsettling times.
Business performance to the end of February has been in line with
our expectations but we are now faced with uncertain challenges. We
are working with our rental customers to provide as much
flexibility as is possible and to ensure that we continue to
support them in these times.
We have maintained and extended operational capability and are
ready to continue servicing our customers to keep them mobile. The
matters that we can control on cost and cash are being managed
carefully. The headroom the Group has is significant and we will
continue to manage our resources carefully through the Coronavirus
crisis. We are taking all possible measures to ensure we can
deliver the best possible outcomes for all our stakeholders."
For further information contact:
Buchanan
David Rydell/Jamie Hooper/Tilly Abraham +44 (0) 207 466 5000
Notes to Editors:
Redde Northgate plc is a leading integrated mobility solutions
platform formed in February 2020 following the all-share merger of
light commercial hire business Northgate plc and Redde plc, the
provider of incident and accident management, legal and other
mobility-related services.
The Group provides mobility solutions and automotive services to
a wide range of businesses and customers spanning the vehicle life
cycle across vehicle supply, service, maintenance, repair,
recovery, accident and incident management and disposal through
sale or salvage.
With an extensive network and diversified fleet of over 110,000
owned vehicles and over 400,000 managed vehicles in more than 100
branches across the UK, Ireland and Spain, the Group aims to
utilise its scale, reach and comprehensive suite of integrated
services to offer a market-leading customer proposition and drive
enhanced returns for shareholders.
Further information regarding Redde Northgate plc can be found
on the Company's website:
www.reddenorthgate.co.uk
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END
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