Shares in van hire and legal services group Redde Northgate (REDD) accelerated to the top of the FTSE 250, gaining 7% to 425p after its interim results beat management expectations due to stronger than anticipated trading.
FULL SPEED AHEAD
Turnover for the six months to October jumped 21.9% to £522.9 million excluding vehicle sales thanks to a significant rise in revenues at Redde, reflecting an increased volume of accidents and claims which the firm said are back to 90% of 2019 levels.
Redde’s revenues climbed 39.2% to £251.9 million, while revenues in the Northgate van hire business across the UK, Ireland and Spain rose 11.7% to £278.5 million helped by a strong rental market and higher utilisation.
The firm also revealed Northgate had won significant new contracts with supermarket giant Tesco (TSCO) and insurance firm Admiral (ADM) plus another unnamed insurer with lifetime revenues of over £200 million.
EV ROLLOUT
There was also progress on two more fronts, moving customers onto contracts - which provides secure long-term revenues - and rolling out electric vehicles.
The number of electric and hybrid vehicles has risen 187% to account for around 2% of the total fleet, and the firm has signed a deal with an EV manufacturer for 5,000 new light commercial vehicles over four years.
In July the firm acquired Charged EV, which installs domestic and commercial electric vehicle charging points, and over of its workshop technicians are already fully trained on electric vehicle maintenance.
POSITIVE OUTLOOK
Chief executive Martin Ward said he was ‘pleased to have delivered a strong first half performance driven by high demand for our products and services and underlying margin gains’, while strategically the firm had made ‘significant progress leveraging the capabilities of our integrated mobility platform to secure multi-year contract wins, which will increase our market share.’
With the recovery in volumes at Redde and contract wins at Northgate, Ward said he expects underlying pre-tax earnings for the full year to be ‘at least in line with the consensus’ of around £120 million.
