Vehicle rental firm Redde Northgate scores record annual results
Redde Northgate boasts record results as FTSE 250 car rental business secures new business and revenue growth
- Redde Northgate’s turnover rose by about a fifth to a record £1.49 billion
- Trading was strongly driven by claims and services revenue was up 37%
- Despite the result, shares of the company were the biggest faller of the FTSE 250 Index
Redde Northgate has delivered a record annual performance thanks to new contracts and tremendous growth in its Spanish division.
Reported sales at the Darlington-based car rental company rose by about a fifth to £1.49 billion for the 12 months ended April, while total pre-tax profits rose 34.7 per cent to £178.7 million.
Growth was driven by claims claims and a 37 percent increase in services revenue as the company’s Redde business benefited from traffic volumes recovering close to pre-pandemic levels and the signing of multi-year deals with insurers.
Performance: Reported sales at the Darlington-based car rental company rose by about a fifth to a record £1.49 billion for the 12 months ended April
The company also won three notable corporate contracts for repairs in Spain, where a mix of strong economic growth, price increases and growing rental fleet pushed turnover in the division above £300 million.
The UK and Ireland business suffered from a shortage of new vehicles, mainly caused by a shortage of semiconductors.
However, sales still grew at a healthy 6.1 percent thanks to soaring demand for accident management services and products such as telematics – devices to monitor driving behavior.
Martin Ward, chief executive of Redde Northgate, said: ‘This is an excellent set of results, and we are proud of what the group and all our colleagues have achieved this year, with record sales and profits and a strong level of cash generation.’
Andy Murphy, director of Edison Group, said the performance “demonstrates a general recovery of European supply chains, which have been severely disrupted by the war in Ukraine, the pandemic and Brexit”.
He added that the company has benefited from a gradual improvement in the truck driver shortage, which has narrowed by about 40 percent in the UK since January.
Redde Northgate noted that strong demand continued into the new fiscal year, supported by the winning of an additional multi-service outsourcing contract.
As a result of this positive outlook, the company has recommended a 10 percent increase in final dividend to 16.5 pence per share, equivalent to an annual dividend of 24 pence.
But Rescued Northgate stock were the biggest fallers on the FTSE 250 Index, falling 7.7 percent to 349 pence by mid-afternoon on Wednesday.
Net debt increased by approximately £112 million due to share buybacks, rising principal lease payments as the group expanded its rental fleet, and adverse exchange rate movements.
Redde Northgate was created just before the start of the Covid-19 pandemic through a merger between accident management specialist Redde and van rental company Northgate.
The group provides ‘whole lifecycle’ services to car rental customers, including removal, repair and maintenance, legal representation and insurance mobility.
It employs more than 7,000 people to manage a fleet of more than 130,000 vehicles from more than 170 outlets in Spain and the British Isles.