Get a van, start earning: Commercial vehicle hire firm Redde Northgate sees shares leap 9.5% on boost to profits
- Redde Northgate saw revenue rise over 10% in the last six months
- Shares in the FTSE 250-listed group have jumped 9.5% today
Commercial vehicle hire firm Redde Northgate saw its revenue and profit rise in the six months to 31 October.
The group, which is based in Darlington, saw total revenue, including vehicle sales, grew 10.2 per cent to £612.9million, against £556million by the same point a year ago. Underlying pre-tax profit grew by 94.4 per cent over the period to £78.9million.
Formed via a merger in February, between vehicle hire firm Northgate and accident management specialist Redde, Redde Northgate offers services for commercial vehicle fleets – with 84 per cent of its vehicles small or medium vans.
Interim results: Commercial vehicle hire firm Redde Northgate saw its revenue and profit rise in the six months to 31 October
The Northgate arm allows businesses to hire vans and cars, while the Redde branch works with insurers, motor dealers and firms which own fleets of cars to provide hire, repair and legal services.
Redde Northgate shares jumped 9.5 per cent or 37.5p to 432.5p by 11am this morning. A year ago the firm’s share price was 251.50p.
The group declared an interim dividend of 6p a share, up from 3.4p a share in the prior year.
Martin Ward, chief executive of Redde Northgate, said: ‘We are pleased to have delivered a strong H1 performance driven by high demand for our products and services and underlying margin gains.’
He added: ‘Redde volumes have continued to grow having now reached approximately 90 per cent of pre Covid-19 levels which is in line with our expectations. Overall, there is good momentum in the business as we enter H2 and our key strategic areas of Focus, Drive and Broaden are delivering meaningful results.
‘Strategically, we have made significant progress leveraging the capabilities of our integrated mobility platform to secure multi-year contract wins which will increase our market share. Our combined product and services offering is unique and unrivalled in terms of scale and infrastructure capabilities.’
Looking ahead, the group said: ‘We expect underlying [profits before tax] to be at least in line with consensus for the full year.’
Redde Northgate has been under scrutiny amid speculation over a potential takeover.
Earlier this summer, there was speculation that TDR Capital – which together with the Issa brothers bought Asda, for £6.8billion – was interested in buying Redde Northgate.
The theory was TDR Capital might want to combine it with webuyanycar.com owner BCA Marketplace, which the private equity firm bought for £2billion in 2019.
However, TDR Capital insiders poured a large bucket of cold water on the rumours, claiming there is nothing in them whatsoever.
And a spokesman for Redde Northgate said it was ‘categorically untrue that the company is in any conversations with any party regarding a takeover of the business’.
This month, the group completed a refinancing of its debt arrangements.
It said today: ‘In November 2021, the Group completed a comprehensive refinancing of its debt arrangements, to optimise its debt portfolio and to support the next phase of the Group’s strategy.
‘The Group signed two new sources of debt, providing it with £792million of facilities, an increase of £104million on the previous position.’