Redde Northgate (LON:REDD), the leading integrated mobility solutions platform providing services across the vehicle lifecycle, has announced its results for the full year ended 30 April 2023.
| Full Year results | Reported | Underlying1 | ||||
| 12 months ended 30 April | FY 2023 | FY 2022 | Change | FY 2023 | FY 2022 | Change |
| £m | £m | % | £m | £m | % | |
| Revenue | 1,489.7 | 1,243.6 | 19.8% | 1,336.9 | 1,093.6 | 22.2% |
| EBIT | 202.0 | 150.8 | 34.0% | 189.2 | 167.9 | 12.7% |
| Profit before Tax | 178.7 | 132.7 | 34.7% | 165.9 | 151.3 | 9.7% |
| Earnings per Share | 60.3p | 41.3p | 46.2% | 55.6p | 50.8p | 9.5% |
| 1 excludes vehicle sales revenue, exceptional items, amortisation of acquired intangible assets and adjustments to underlying depreciation. See GAAP reconciliation. | ||||||
| Other measures | FY 2023 | FY 2022 | Change | |||
| £m | £m | £m | ||||
| Net debt | 694.4 | 582.5 | 111.9 | |||
| Steady state cash generation | 191.5 | 216.4 | (24.9) | |||
| Free cash flow | 4.5 | 19.8 | (15.3) | |||
| ROCE | 14.1% | 13.9% | +0.2ppt | |||
| Dividend per Share | 24.0p | 21.0p | 3.0p | |||
Martin Ward, CEO of Redde Northgate, commented:
“This is an excellent set of results and we are proud of what the Group and all our colleagues have achieved this year, delivering record revenue and profits and strong levels of cash generation. Our integrated mobility platform has helped to drive growth and offers significant efficiencies for ourselves and customers. Vehicle supply is improving but remains below the high levels of customer demand; our financial strength provides an ability to react quickly to supply opportunities as they arise.
Our acquisitions of two specialist vehicle providers since the start of FY2023 have taken us into new areas and broadened our UK rental customer base and we continue to review other exciting growth opportunities. The Group fleet is over 130,000 vehicles and multi-year insurer contracts are now at full run-rate. Together with our strong pipeline of new business including an additional large leasing company multi-service contract due to go live in the autumn, we are confident in continuing to deliver further stakeholder value.”
Key financial highlights
· Group revenue growth of c.20%; with growth in Redde activity from existing and new contracts, alongside a managed increase in average hire rates; revenues ex-vehicle sales up 22%
· Reported PBT of £178.7m; benefitted from £46.5m depreciation adjustment, offset by NewLaw impairment of £13.5m reflecting strategy prioritisation; no impact on underlying results or cash
· Underlying PBT up over 9% to £165.9m due to strong operational performance and volume growth, partially offset by higher interest costs
· Steady state cash generation strong at £191.5m; free cashflow reflects investments in fleet and working capital to support new multi-year contracts, and investment in Blakedale
· Healthy balance sheet, over £290m of facility headroom; bank facility extended out to 2026; 1.5x leverage at midpoint of stated target 1-2x range; FY23: 62% fixed, including private placement at 1.3%
· ROCE improved by 0.2ppt to 14.1%; reflecting focus on maintaining strong cost control, disposal profits and disciplined capital allocation
· Shareholder returns: 10.0% increase in final dividend to 16.5p bringing full year dividend to 24.0p, reflecting Board’s confidence in the outlook; £60m share buyback completed in December acquiring 7% of ordinary share capital
Business highlights
· Group fleet up 3% to over 130,000 vehicles, driven by growth in Spain and replacement vehicles for insurance contracts; LCV scarcity continuing, supporting residual values
· Two large insurance contracts went live in H1, high demand for FMG RS repair solutions and three notable corporate contracts for Spanish repairs
· Strong pipeline of new business reflecting growing appeal of the platform; new leasing company multi-service outsourcing contract signed post-year end and scheduled go-live in Q2
· Continued progress in value-added services, now over 10,000 telematics units (up 10%); cross platform – Northgate UK&I accident management services customer revenues up 150%
· Divisional rental margins maintained in line or above mid-term range through careful pricing actions to manage cost inflation
· Launch of bundled e-LCV vehicle and charging solutions to help fleet transitions; Iberdrola partnership for Spanish EV-charging product partnership; development of UK solar/battery charging products
· Acquisitions of Blakedale (July 22) and FridgeXpress (May 23) delivering on strategic goals: Blakedale customers up 28% and fleet up over 30% since acquisition
Outlook
We continue to enjoy robust demand as we start FY2024 and our recent signing of a further multi-service outsourcing contract for Redde reflects our healthy new business pipeline. With exciting opportunities across the platform, we expect to continue to make strategic progress; together with good momentum in the business we are confident and are well-placed to continue to create long-term value for shareholders.
