1st Dec 2021 09:40
(Alliance News) - Redde Northgate PLC on Wednesday hiked its interim dividend following a performance that was ahead of company expectations, with sharp increases in profit and revenue.
Shares in Redde Northgate were up 6.2% at 419.50 pence on Wednesday morning in London.
For the six months ended October 31, the Darlington, England-based commercial vehicle hire group posted a pretax profit of GBP71.7 million, more than doubled from GBP25.9 million the year before.
Redde Northgate's profit performance was helped by a 48% increase in profit from the disposal of vehicles to GBP27.0 million, with restriction in vehicle supply supporting high residual values, more than offsetting a 34% drop in the volumes of sold vehicles at 10,100.
Total group revenue grew 10% year-on-year to GBP612.9 million from GBP556.0 million. The Redde business was lifted by a rise in volumes of vehicle accidents and incidents, reaching 90% of pre-virus levels.
The Redde segment - which deals in incident and accident management services - posted a 39% rise in revenue to GBP251.9 million.
Meanwhile, revenue from the Northgate UK & Ireland business increased 3.5% to GBP232.7 million, and from Northgate Spain by 0.3% to GBP135.8 million, due to strong growth in vehicle hires.
However, vehicle sales dropped 29% year-on-year, reflecting the post-lockdown sale of a large number of vehicles in the prior period, and reduced volumes available due to supply restrictions.
Excluding vehicle sales, revenue rose 22% year-on-year to GBP552.9 million from GBP429.0 million.
Redde Northgate declared an interim dividend of 6.0 pence per share, up 77% from 3.4p in the same period a year before.
Looking ahead, Redde Northgate said its increasingly large contract wins have demonstrated a strong platform for further growth, and has driven continued momentum across the business.
As a result, Redde Northgate expects underlying pretax profit for the financial year ending April 30 to be line with consensus, which is at GBP119.4 million, marking a nearly doubled result from GBP59.0 the year before.
"We are pleased to have delivered a strong H1 performance driven by high demand for our products and services and underlying margin gains," said Chief Executive Officer Martin Ward.
"Strategically, we have made significant progress leveraging the capabilities of our integrated mobility platform to secure multi-year contract wins which will increase our market share. Our combined product and services offering is unique and unrivalled in terms of scale and infrastructure capabilities."
By Dayo Laniyan; [email protected]
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