7 December 2022

This announcement contains inside information

REDDE NORTHGATE PLC

("Redde Northgate" or the "Group" or the "Company")

ANNOUNCEMENT OF RESULTS FOR THE HALF YEAR ENDED 31 OCTOBER 2022 Fleet growth and new contract wins supporting strong financial performance

Redde Northgate (LSE:REDD), the leading integrated mobility solutions platform providing services across the vehicle lifecycle, is pleased to announce its results for the half-year ended 31 October 2022.

Half Year results

Reported

Underlying1

6 months ended 31 October

H1 2023

H1 2022

Change

H1 2023

H1 2022

Change

£m

£m

%

£m

£m

%

Revenue

696.3

612.9

13.6%

627.6

522.9

20.0%

EBIT

111.6

80.1

39.3%

93.4

87.3

7.0%

Profit before Tax

101.9

71.7

42.1%

83.7

78.9

6.1%

Earnings per Share

34.4p

22.5p

52.3%

28.1p

26.1p

7.7%

1 excludes vehicle sales revenue, exceptional items, amortisation of acquired intangible assets and adjustments to underlying depreciation. See GAAP reconciliation.

Other measures

H1 2023

H1 2022

Change

£m

£m

%

Net debt

661.3

587.2

12.6%

Group net debt (excl. IFRS 16 leases)2

531.8

470.4

13.0%

Steady state cash generation

121.2

93.5

29.6%

Free cash flow

2.1

(7.6)

n/a

ROCE

13.5%

12.5%

1.0ppts

Dividend per Share

7.5p

6.0p

25.0%

2excludes leases that would not have been recognised on the balance sheet prior to adoption of IFRS 16.

Martin Ward, CEO of Redde Northgate, commented:

"With the Group fleet up 8% to over 130,000 vehicles and new multi-year contracts going live in the period, we have achieved meaningful growth across all our revenue streams. Our strategy of building an integrated platform is serving us well, with customers increasingly accessing a broadening product set to support their mobility needs. The Blakedale acquisition at the start of the period has integrated well, enjoying both customer and fleet growth since joining the Group.

We have successfully delivered on our margin targets and implemented pricing increases across the business to help mitigate cost inflation. While mindful of the macro-economic backdrop, with a diverse and high-quality customer base well represented in resilient sectors, we are positioned to capitalise on growth opportunities across the business, in particular when LCV supply strengthens."

1

Key financial highlights

  • Group revenue growth up 14%, reflecting strong traffic and accident management volumes, fleet growth, pricing increases, and continued robust residual values
  • Reported PBT of £101.9m up 42%; underlying PBT up 6% to £83.7m due to strong operational performance, partially offset by lower disposal profits and higher interest
  • Steady state cash generation improved 30% to £121.2m; free cashflow reflects investments in fleet, working capital for new insurance contracts, and the Blakedale acquisition
  • Strong balance sheet with over £300m of facility headroom and bank facility extended out one year to 2026; 1.6x leverage (H1 2022: 1.5x) well within our stated target 1-2x range
  • Shareholder returns: 25% increase in interim dividend to 7.5p; £60m share buyback programme running since March, £56m spend in total by end-November

Depreciation rate change

  • H1 reported PBT benefitted from £28m of depreciation adjustment, in line with expectations at full year; no impact on H1 underlying results; and no impact on cash

Business highlights

  • Group fleet up 8% to over 130,000, driven by strong growth in Spain and replacement vehicles for insurance contracts; LCV scarcity in Northgate UK&I ongoing, supporting residual values
  • Two large insurance contracts went live in period, each customer now taking full range of claims and repair services; activity to grow through next 12 months
  • Growing take-up of value-added services, including cross sell of accident management services, with Northgate UK&I customer fleet under management up 75%; good H2 pipeline for services
  • Launch of bundled e-LCV vehicle and charging solution to help fleet transitions; won 2 Spanish repair contracts, including from an existing large UK insurance customer
  • Recent acquisitions delivering on strategic goals: strong demand for FMG RS repair solutions; Blakedale proposition gaining traction with existing customers
  • Divisional margins maintained in line or above long-term target range through careful pricing actions to reflect cost inflation

Outlook

Demand for our services continues to be robust across geographies along with continuing strength in residual values. These factors underpin our confidence for the full year which is expected to be modestly above market expectations. While the Board is mindful of the ongoing macro-economic environment and current LCV supply, it remains confident that our integrated mobility solutions platform will continue to create sustainable shareholder value.

2

Analyst Briefing

A hybrid presentation for sell-side analysts and institutional investors will be held at 9.30am today, 7 December 2022. If you are interested in attending, please email Buchanan on reddenorthgate@buchanan.uk.comto request the joining details. This presentation will also be made available via a link on the Company's website www.reddenorthgate.com.

For further information contact:

Ross Hawley, Head of Investor Relations

+44 (0) 204 566 7090

Buchanan

David Rydell/Jamie Hooper/Hannah Ratcliff/ Verity Parker

+44 (0) 207 466 5000

This announcement is made on behalf of Redde Northgate plc by James Kerton, Company Secretary of Redde Northgate plc.

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 the following 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 130,000 owned and leased vehicles, supporting over 600,000 managed vehicles, with around 175 branches across the UK, Ireland and Spain and a specialist team of over 6,700 employees.

Further information regarding Redde Northgate plc can be found on the Company's website www.reddenorthgate.com.

GAAP reconciliation and glossary of terms

Throughout this document we refer to underlying results and measures; the underlying measures allow management and other stakeholders to better compare the performance of the Group between the current and prior period without the effects of one-off or non-operational items. Underlying measures exclude intangible amortisation from acquisitions and certain one-off items such as those arising from restructuring activities and the tax impact thereon. Specifically, we refer to disposal profit(s). This is a non-GAAP measure used to describe the adjustment in depreciation charge made in the period for vehicles sold at an amount different to their net book value at the date of sale (net of attributable selling costs).

Adjustments have also been made to underlying results for depreciation rate changes made in the period in relation to an old cohort of vehicles impacted by the disruption in residual values over recent

3

periods which could not have been envisaged at the time those vehicles were purchased. Further explanation of this impact is included within the Financial Review.

A reconciliation of GAAP to non-GAAP underlying financial performance is outlined below. A further explanation of alternative performance measures and a glossary of terms used in this document are outlined below the Financial Review.

4

GAAP reconciliation tables

Income statement reconciliation

Six month period ending

Foot

31.10.2022

31.10.2022

31.10.2022

31.10.2021

31.10.2021

31.10.2021

(Unaudited)

note

Statutory

Adjustments

Underlying

Statutory

Adjustments

Underlying

(below)

2022

2022

2022

2021

2021

2021

£m

£m

£m

£m

£m

£m

Revenue

(a)

696.3

(68.7)

627.6

612.9

(90.0)

522.9

Cost of sales

(b + c)

(478.8)

40.5

(438.4)

(441.3)

90.0

(351.3)

Gross profit

217.5

(28.2)

189.2

171.7

-

171.7

Administrative expenses

(d)

(107.5)

10.1

(97.4)

(94.0)

7.5

(86.5)

Operating profit

110.0

(18.2)

91.8

77.7

7.5

85.2

Income from associates

1.6

-

1.6

2.1

-

2.1

Gain on bargain purchase

(e)

-

-

-

0.3

(0.3)

-

EBIT

111.6

(18.2)

93.4

80.1

7.2

87.3

Interest income

-

-

-

-

-

-

Finance costs

(9.7)

-

(9.7)

(8.4)

-

(8.4)

Profit before taxation

101.9

(18.2)

83.7

71.7

7.2

78.9

Taxation

(f)

(19.9)

3.2

(16.7)

(16.2)

1.5

(14.7)

Profit for the year

82.0

(15.0)

67.0

55.5

8.7

64.2

Shares for EPS calculation

238.7m

238.7m

246.1m

246.1m

Basic EPS

34.4p

28.1p

22.5p

26.1p

Foot

notes

Adjustments comprise:

Revenue: sale of vehicles

(a)

(68.7)

(90.0)

Cost of sales: revenue sale of vehicles

net down

(b)

68.7

90.0

Adjustments to underlying

depreciation (see Financial Review)

(c)

(28.2)

-

Gross profit

(28.2)

-

Exceptional items (Note 11)

-

(2.4)

Amortisation of acquired intangible

assets (Note 6)

10.1

9.9

Administrative expenses

(d)

10.1

7.5

Gain on bargain purchase

(e)

-

(0.3)

Adjustments to EBIT

(18.2)

7.2

Adjustments to PBT

(18.2)

7.2

Tax on exceptional items (Note 11)

-

0.5

Tax on brand royalty charges and

amortisation of acquired intangible

assets and tax rate change on

acquired intangible assets

3.2

1.0

Tax adjustments

(f)

3.2

1.5

Adjustments to profit

(15.0)

8.7

5

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Redde Northgate plc published this content on 07 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 December 2022 09:21:04 UTC.