26th Feb 2015 09:50
LONDON (Alliance News) - Shares in Redde PLC were trading higher Thursday after the automobile support services group said it more than doubled its profit in the first half of the year, on the back of strong revenue growth, prompting a near 20% increase in its interim dividend.
Redde shares were up 8.5% at 102.00 pence Thursday morning.
The company, which provides accident management and legal services, reported a pretax profit of GBP11.0 million for the six months to end-December 2014, more than double the GBP4.8 million profit it reported for the first half of the year before, as revenue increased 32% to GBP122.0 million, from GBP92.3 million. It said revenue was driven by 16.4% like-for-like growth in its accident management businesses, which includes 3.9% growth in the number of credit hire cases and a 7.9% increase in the volume of business transacted in credit repairs.
Its adjusted operating margin improved to 9.1% from 4.2%, boosted by higher sales changes in the mix of business handled, an improved supply chain and further cost savings.
Redde declared an interim dividend of 4.00 pence, a 19% increase on last year's three interim dividends which totalled 3.35 pence. The company said it expects to declare any final dividend with its full-year results.
"We have achieved strong growth and profitability in the first half. We have continued to see the strength of the business model and strategy deliver above market expectations...With a strong balance sheet and a good start already to the second half we expect to see further progress being made with our sustainable profit growth strategy," said Chief Executive Martin Ward in a statement.
Looking forward, Redde said the second half of the year has already started well.
"The combination of strategic acquisitions, as well as continuing to deliver organic growth and further improvements in operational efficiency from our new business model, gives the board great encouragement for the future," said Chairman Avril Palmer-Baunack in the statement.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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