Media

Announcement of Results for the Full Year Ended 30 April 2023

5 July 2023

Record financial performance driven by strong demand and major contracts

Redde Northgate (LSE:REDD), the leading integrated mobility solutions platform providing services across the vehicle lifecycle, is pleased to announce its results for the full year ended 30 April 2023.

Martin Ward, CEO of Redde Northgate, commented:

“This is an excellent set of results and we are proud of what the Group and all our colleagues have achieved this year, delivering record revenue and profits and strong levels of cash generation. Our integrated mobility platform has helped to drive growth and offers significant efficiencies for ourselves and customers. Vehicle supply is improving but remains below the high levels of customer demand; our financial strength provides an ability to react quickly to supply opportunities as they arise.

 Our acquisitions of two specialist vehicle providers since the start of FY2023 have taken us into new areas and broadened our UK rental customer base and we continue to review other exciting growth opportunities. The Group fleet is over 130,000 vehicles and multi-year insurer contracts are now at full run-rate. Together with our strong pipeline of new business including an additional large leasing company multi-service contract due to go live in the autumn, we are confident in continuing to deliver further stakeholder value.”

Key financial highlights

• Group revenue growth of c.20%; with growth in Redde activity from existing and new contracts, alongside a managed increase in average hire rates; revenues ex-vehicle sales up 22%
• Reported PBT of £178.7m; benefitted from £46.5m depreciation adjustment, offset by NewLaw impairment of £13.5m reflecting strategy prioritisation; no impact on underlying results or cash
• Underlying PBT up over 9% to £165.9m due to strong operational performance and volume growth, partially offset by higher interest costs
• Steady state cash generation strong at £191.5m; free cashflow reflects investments in fleet and working capital to support new multi-year contracts, and investment in Blakedale
• Healthy balance sheet, over £290m of facility headroom; bank facility extended out to 2026; 1.5x leverage at midpoint of stated target 1-2x range; FY23: 62% fixed, including private placement at 1.3%
• ROCE improved by 0.2ppt to 14.1%; reflecting focus on maintaining strong cost control, disposal profits and disciplined capital allocation
  Shareholder returns: 10.0% increase in final dividend to 16.5p bringing full year dividend to 24.0p, reflecting Board’s confidence in the outlook; £60m share buyback completed in December acquiring 7% of ordinary share capital 

Business highlights

• Group fleet up 3% to over 130,000 vehicles, driven by growth in Spain and replacement vehicles for insurance contracts; LCV scarcity continuing, supporting residual values
• Two large insurance contracts went live in H1, high demand for FMG RS repair solutions and three notable corporate contracts for Spanish repairs
• Strong pipeline of new business reflecting growing appeal of the platform; new leasing company multi-service outsourcing contract signed post-year end and scheduled go-live in Q2
• Continued progress in value-added services, now over 10,000 telematics units (up 10%); cross platform – Northgate UK&I accident management services customer revenues up 150%
• Divisional rental margins maintained in line or above mid-term range through careful pricing actions to manage cost inflation
• Launch of bundled e-LCV vehicle and charging solutions to help fleet transitions; Iberdrola partnership for Spanish EV-charging product partnership; development of UK solar/battery charging products 
• Acquisitions of Blakedale (July 22) and FridgeXpress (May 23) delivering on strategic goals: Blakedale customers up 28% and fleet up over 30% since acquisition

Outlook

We continue to enjoy robust demand as we start FY2024 and our recent signing of a further multi-service outsourcing contract for Redde reflects our healthy new business pipeline. With exciting opportunities across the platform, we expect to continue to make strategic progress; together with good momentum in the business we are confident and are well-placed to continue to create long-term value for shareholders.

Analyst Briefing

A hybrid presentation for sell-side analysts and institutional investors will be held at 9.30am today, 5 July 2023. If you are interested in attending, please email Buchanan on reddenorthgate@buchanan.uk.com to request the joining details. This presentation will also be made available via a link on the Company’s website www.reddenorthgate.com.

Presentation via Investor Meet Company

The Company will also provide a presentation via the Investor Meet Company platform on Thursday 13 July 2023 at 2.15pm. Click here to register: https://www.investormeetcompany.com/redde-northgate-plc/register-investor

For further information contact: 

Ross Hawley, Head of Investor Relations +44 (0) 204 566 7090

Buchanan

David Rydell/Jamie Hooper/Hannah Ratcliff/ Verity Parker +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 the following key areas: vehicle rental, vehicle data, accident management, vehicle repairs, fleet management, service and maintenance, vehicle ancillary services and vehicle sales.

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 130,000 owned and leased vehicles, supporting over 700,000 managed vehicles, with over 170 branches across the UK, Ireland and Spain and a specialist team of over 7,000 employees.

Further information regarding Redde Northgate plc can be found on the Company’s website www.reddenorthgate.com.

GAAP reconciliation and glossary of terms

Throughout this document we refer to underlying results and measures; the underlying measures allow management and other stakeholders to better compare the performance of the Group between the current and prior year without the effects of one-off or non-operational items. Underlying measures exclude intangible amortisation from acquisitions, certain adjustments to depreciation and certain one-off items such as those arising from restructuring activities and the tax impact thereon. Specifically, we refer to disposal profit(s). This is a non-GAAP measure used to describe the adjustment in depreciation charge made in the year for vehicles sold at an amount different to their net book value at the date of sale (net of attributable selling costs).

A reconciliation of GAAP (reported) to non-GAAP (underlying) measures is included below and at the end of the Finance Review with a glossary of terms used in this report…

View the full Preliminary Results here.