Media

Announcement of Interim Results

6 December 2023

Strong underlying results with good momentum and pipeline

Redde Northgate (LSE:REDD), the leading integrated mobility solutions platform providing services across the vehicle lifecycle, is pleased to announce its results for the half-year ended 31 October 2023 (the ‘period’).

Martin Ward, CEO of Redde Northgate, commented:

This has been a strong trading period for the business and continues the progress we have seen since the launch of our integrated services platform.

Growth from new contract wins continues to support revenue and earnings momentum in the near term. With a strong prospect pipeline, and a large proportion of our revenues underpinned by multi-year service contracts, we see the quality of earnings being a standout feature of the business.

Cash generation has been good, allowing us to invest in developing our fleet assets, and supporting our expansion plans, with 9 new site openings in progress. Our borrowings leverage remains in the middle of our target range and the business has a strong balance sheet to support value generating opportunities.

With visibility of earnings underpinned, the Board is confident on the outlook for H2 and now expects to be delivering earnings modestly ahead of market consensus on a full year basis.

Key financial highlights

• Total revenue growth up 30.9%; underlying revenue up 16.9% with strong claims and services revenue growth (up 25.7%) supported by increased volumes from recent contracts and higher fleet disposal activity
• Vehicle hire revenue rose 6.7%; Spain up over 10% supported by VOH growth of 4.3%, UK&I up 4.4% with growth in ancillary products; plus careful pricing actions in both businesses
• Disposal profits of £34.7m (H1 2023: £24.7m), from higher fleet sales volumes totalling 18,800; continued LCV residual value strength, replacement car fleet now sold through Van Monster channels
• Stable margins for both vehicle rental and accident claims and repair businesses, Spain remains above mid-teens long term expected range, at 20.8% (H1 2023: 20.4%)
• Reported PBT of £97.4m (H1 2023: £101.9m) including depreciation adjustment of £7.6m (H1 2023: £28.2m); underlying PBT up 18.3% to £99.1m due to strong operational performance and disposal profits, partially offset by higher interest costs
• EBITDA grew 10.7% to £220.0m (H1 2023: £198.8m) due to strong operational performance; uses of cash included £103m of replacement capex, of which c.£25m of additional capex in order to address fleet ageing
• Strong balance sheet with stable 1.6x leverage (H1 2023: 1.6x), supported by fleet assets of £1.23bn (H1 2023: £1.09bn) and over £236m of facility headroom
• Shareholder returns: 10.7% increase in interim dividend to 8.3p; £30m share buyback programme running since August, £10m spend by end-November

H1 business highlights

• Group fleet remains at c.130,000 vehicles, 1% lower than April 2023; with 3% growth in Spain where supply availability is good offsetting ongoing UK&I supply challenges, but pockets of availability appearing
• Lex Autolease multi-service contract live in September and performing above expectations; further multi-year contract extensions agreed, including specialist customer segment for insurance partner
• Specialist vehicles: FridgeXpress (acquired May 23) integration progressing, bringing additional customer opportunities; Blakedale (acquired July 22) strongly growing both customer base and revenues
• Increasing capacity through investment in 7 new facilities opened or nearing completion: 2 new Spanish branches/ 1 workshop, 2 new FMG RS facilities (Bristol/ N London), 2 new Northgate branches (Inverness/ N London)
• Supporting net zero transition: Spain awarded £1.2m EU grant supporting EV purchases; UK&I largest EV fleet order to date for 100 vehicles; 89 UK locations now have EV charging points

Outlook

Redde Northgate continues to deliver on its strategic goals and is enjoying strong demand as well as platform momentum and a healthy pipeline which gives the board confidence in the Group’s prospects. With the continued momentum in the business we now expect earnings for the full year to be modestly ahead of market consensus.

Analyst Briefing and Investor Meet presentation

A hybrid presentation for sell-side analysts and institutional investors will be held at 9.30am today, 6 December 20243 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.

The Company will also provide a presentation via the Investor Meet Company platform on Monday 11 December 2023 at 1:30pm for institutional and retail investors. 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.

View the full Preliminary Results here.