15 March 2022
This announcement
contains inside information
REDDE NORTHGATE
PLC
(“Redde Northgate” or the “Group” or
the “Company”)
Trading Update and
Launch of Share Buyback
Stronger than
expected performance with PBT ahead of consensus
Redde Northgate plc (LSE:REDD), the leading integrated mobility
solutions platform providing services across the vehicle lifecycle,
today announces a trading update for the year ended 30 April 2022, ahead of its results for the year
scheduled for July 2022.
Group trading
The Group continues to perform well and is trading ahead of
expectations, driven by a strong performance across the business.
Rental margin to the end of February was 15.8% in UK&I and
17.5% in Spain.
Further to the interim results announcement on 1 December 2021, the Group has continued to
de-fleet a lower number of vehicles due to rental demand and new
vehicle supply constraints with used vehicle market values staying
strong. Vehicle supply constraints are expected to continue
through FY 2023.
Redde volume recovery was hindered in December and January by
the Omicron and work-from-home restrictions. The Group has seen
good improvement since the beginning of February and volumes are
now running at circa 90% of pre-Covid levels.
Based on the current trends the Board now expects full year
underlying profit before tax for the year ended 30 April 2022 to be in the region of £150m,
comfortably ahead of consensus[1] of £133.9m. The Board expects
disposal profits to account for c.33% of the full year underlying
profit before tax compared to c.43% in the prior year.
Share buyback programme
The Group’s objective is to employ a disciplined approach
to investment, returns and capital efficiency to deliver
sustainable compounding growth. It continues to see exciting
opportunities to deploy capital organically and has a good M&A
pipeline. Even after taking into consideration capital to
fund organic growth, payment of dividends in line with the
Company’s dividend policy and acquisitions within the M&A
pipeline, the Company has substantial headroom under its facilities
and target leverage of 1-2x.
As a result, the Company announces that it will launch a share
buyback programme of the Company’s ordinary shares for up to a
maximum aggregate consideration of £30 million (the
Programme), commencing on the date of this
announcement. It is expected the Programme will be completed by
15 September 2022.
The Company has entered into an agreement with Numis pursuant to
which it is intended that Numis will purchase up to a maximum of 24
million ordinary shares in the Company on the Company’s behalf.
Under the Programme the repurchased shares will be held in
treasury.
Notes
The Programme is in accordance with the Company’s general
authority to purchase a maximum of 24,609,142 ordinary shares. Any
purchase of the Company’s ordinary shares contemplated by this
announcement will be carried out on the London Stock Exchange and
be executed in accordance with the Company’s general authority to
repurchase ordinary shares granted by its shareholders on
20 September 2021, Market Abuse
Regulation 596/2014 and the Commission Delegated Regulation (EU)
2016/1052 (both as incorporated into UK domestic law by the
European Union (Withdrawal) Act 2018), and Chapter 12 of the
Financial Conduct Authority’s Listing Rules.
The Group plans to announce a pre-close trading update for the
year ended 30 April 2022 in
May 2022, ahead of the publication of
its full year results scheduled for July
2022.
The person responsible for making this announcement on behalf of
the Company is Nick Tilley (Group
Company Secretary).
For further information contact:
Buchanan
David Rydell/Jamie Hooper/Tilly
Abraham
+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 seven 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 120,000 owned and leased vehicles,
supporting over 600,000 managed vehicles, with more than 170
workshop, body shop and rental locations across the UK,
Ireland and Spain and a specialist team of over 6,000
automotive services professionals.
Further information please visit the Company's website:
www.reddenorthgate.com
This announcement contains inside information as defined in
Article 7 of the retained EU law version of the Market Abuse
Regulation No 596/2014 ("UK MAR") and has been announced in
accordance with the Company's obligations under Article 17 of UK
MAR.
[1]Current Company compiled analyst consensus for FY 2022
underlying profit before tax is £133.9m, see
www.reddenorthgate.com