(Alliance News) - Redde Northgate PLC's annual profit fell by more than two-thirds with the recent vehicle rental and services tie-up taking a hit from merger costs, the company said on Wednesday, though it did explain it secured integration savings ahead of schedule.
The company was created through the merger of peers Northgate PLC and Redde PLC which was completed in February.
Total revenue in the year to April 30 was up 4.5% to GBP779.3 million from GBP745.5 million, but pretax profit plunged 78% to GBP13.5 million from GBP60.4 million.
Total administrative expenses ballooned 35% to GBP129.0 million from GBP84.0 million. The company also posted GBP18.3 million in merger expenses. However, it reached GBP10.2 million of integration savings on an annualised run rate basis by the end of August, 18 months sooner than planned.
"Targets are increased to GBP12 million by the end of financial 2021 and GBP15 million by the end of financial 2022, an increase of 50% on the original target," Redde Northgate said.
"A further GBP3.8 million of permanent annualised cost savings have also been achieved to date, giving a total of GBP14.0 million of run rate savings to date."
The company's total payout was trimmed by 28% to 13.1 pence per share from 18.3p.
"The main priority following the Merger of Northgate and Redde in February 2020, was to integrate the businesses, achieve our targeted synergies and capitalise on the new opportunities available to the combined group. Despite the Covid-19 lockdown happening within weeks following the merger, we were able, in the months during lockdown, to execute the majority of our plans and deliver cost synergies and other savings well ahead of schedule and target," Chief Executive Martin Ward said.
Shares in the company were 0.7% higher at 222.50p each in London on Wednesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Redde Northgate (REDD)