(Alliance News) - Redde Northgate PLC on Tuesday reported a higher profit for the first half of its financial year thanks to revenue contribution from Redde PLC after a February merger.
The company was created through the merger of light commercial hire business Northgate PLC and incident and accident management, legal and other mobility-related services firm Redde. This all-share merger completed in February.
For the six months ended October 31, its pretax profit was GBP25.9 million, up 4.4% from GBP24.8 million the year before as revenue climbed 55% to GBP556.0 million from GBP357.8 million.
The company noted that: "Revenue from the Northgate businesses was GBP376.5m million, 5.2% higher than H1 2020, and comprised hire revenues which were 6.2% lower due to the impact of both off-hires and customer support packages during the first lockdowns and vehicle sales revenues which were 38% higher due to higher volumes (mainly from reducing stock impacted by April lockdown) and strong market pricing in the UK."
Excluding vehicle sales, revenue was up 61%, an increase attributable to Redde, which is included in revenue following the merger on February 21.
The statutory pretax profit figure is stated after GBP9.6 million of amortisation of acquisition intangibles and GBP5.4 million of exceptional administrative expenses, GBP2.6 million relating to restructuring. This compares to only GBP2.2 million of exceptional administrative expenses the year before and GBP6,000 of amortisation on acquired intangible assets.
Underlying pretax profit, which excludes these as well as items such as brand royalty charges, rose much more sharply to GBP40.6 million from GBP27.6 million.
Redde Northgate declared an interim dividend of 2.3 pence per share, down from 6.3p the year before.
Chief Executive Martin Ward said: "We can clearly see the impact of Covid-19 in this set of results, particularly in Redde where accident volumes were depressed in the first quarter. However, these have significant potential to increase when road traffic volumes and incidents revert back closer to historic norms. Meanwhile, the buoyancy in used vehicle markets, particularly in the UK, has led to higher disposal profits, and the Northgate businesses have also both benefitted from an increase in VOH since year-end such that VOH is now above pre-Covid levels.
"Recent regional lockdowns and the second national lockdown in the UK have highlighted the need for agility and we continue to keep cost and cash controls in place in order to monitor and manage the business closely. We currently do not expect the impact of these new lockdowns to be as severe as the original national lockdowns in April and May. We are confident on performance in FY2021 and our views on FY2022 will be determined by the exit run rate we see at the end of FY2021."
Shares in Redde Northgate were up 2.2% at 252.48p in London on Tuesday morning.
By Anna Farley; annafarley@alliancenews.com
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