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The PER is 8.4, the Price to Book is 0.8, and the yield should be around 3%; so the figures don't add up too badly here. For what they re worth, Barclays issued a note in August with a target price of 317, and Peel Hunt suggested in March that there was a 300 target, having reduced from 400. The primary business is van leasing, in the UK and Spain. Amongst the major Customers are RMG. Revenues are also made by van sales, and the company has also taken in an accident management firm and a chain of crash repair workshops in the last year or so, the latter out of bankruptcy and the former in the wake of poor trading. These businesses should be a good fit, and according to the last update in December things are going well. Amongst the assets acquired was an allegedly decent management team. The Chairman has in fact proved so effective in one former employment, the workers slashed the tyres on her BMW (google it!!)
The company has traded well since November, despite Covid restrictions. The boom in home shopping has pushed up the prices of on-line retailers and the owners of their warehousing, but so far little has been said of the middle men, that is the fleet of delivery drivers and vehicles. REDD are the great enablers in this field. On the dark side there is a lot of debt here, in fact 50% or so of the market cap, but that should remain manageable as interest rates remain low.
Overall I think we should see 300 here, and hopefully more. Synergies in management, the extending of van lease life to three years, and newer revenue streams should all help.
Sorry just one small point - Northgate is a rental company not leasing - very different.
Apologies. My error. To be exact the company "provides [an] integrated mobility solutions platform". ; )
ASF,
I am amazed at how little is posted here!
I joined REDD in October 2019 when it was a £1 then so I suppose I haven't posted either in 18 months.
I was doing OK and the merger was not my preferred choice at the time because of the slightly smaller slice of the cake that we received.
After some thought I decided that some of the BOD were performers and that there would be the benefits from economies of scale etc and therefore held. Quite glad I did as things are being rationalised and it is a business that generates cash revenue quite readily.
I am pleased to say that I am comfortably head above water and the business is gaining exposure and popularity after being somewhat overlooked for a long while.
So yes, I believe value here.
However, today
Interesting to see Richard Griffiths increase his stake here. Quite a prolific investor and founder of Evolution (Broking House). Now runs his family office out of Jersey and has certainly amassed a sizeable investment fortune over the last 25 years. Over 5% of the company now.
Sage, yes, people like RG give one some courage in one's convictions here.