Redde Northgate Share Discussion Threads

[babbler] 04/9/2020 10:23

https://news.sky.com/story/540-jobs-lost-after-nationwide-accident-repair-services-goes-into-administration-12063271Doesn't mention REDD... Groan.

[flyfisher] 04/9/2020 09:43

Yes, but they have refused the dross as they are only taking on 77 sites, also an opportune time to seek rent reviews.
Looks a good deal at less than asset value, and a positive trading update as well.

[fenners66] 04/9/2020 07:32

Last accounts submitted 2017 ?
Lost £602k but after writing off £9.5m in amortisation.

So this was in a poor state pre-covid ?

[fenners66] 04/9/2020 07:27

So Nationwide was in administration, is this an example of a CV related opportunist bargain - or was Nationwide already struggling badly pre-covid ?

[skinny] 04/9/2020 07:02

.



Acquisition of certain businesses and certain assets of Nationwide Accident
Repair Services

Significantly increasing our strategic and operational capability

Redde Northgate plc (LSE:REDD), the integrated mobility solutions and
automotive services provider, today announces the acquisition, by a wholly
owned subsidiary, of certain businesses and certain assets of Nationwide
Accident Repair Services ("Nationwide") by way of a purchase from
administrators, for an initial cash consideration of up to GBP11m, plus a
deferred consideration of up to GBP5m conditional on retention of certain trade
business on satisfactory terms.

The Group also provides a brief update on trading ahead of the preliminary
announcement scheduled for 16 September 2020.

Trading

Since our pre-close trading update of 19 May 2020, and as restrictions relating
to Covid-19 have eased, the Group has seen sequential monthly improvements in
trading, such that the level of support packages provided to customers has now
reduced to a minimal level, vehicles on hire have increased in all countries,
accident and incident volumes have started to increase as traffic volumes pick
up, and vehicle disposal channels have re-opened, with recent significant
improvement in residual values compared to the prior year. Further, excellent
progress has continued to be made in integrating Redde and Northgate since the
merger.

Given the improving trading environment and the continued close management of
liquidity, cash inflows have been strong and the headroom on our bank
facilities has increased from GBP234m at the end of April 2020 to GBP291m at the
end of August 2020.

Acquisition

Nationwide is the UK's largest wholly owned repair network and the largest
independent accident repair company in Europe. It is a strategic partner to
many UK insurers, with whom, in several cases, Redde Northgate has existing
relationships. Of the current 102 bodyshop sites, we will take up to 77 sites,
providing the Group with national geographic coverage. Of these sites, there
are a small number of freehold properties, and the remaining leasehold
properties will be occupied under licence granted by the administrators and we
will make a determination in due course whether to take leases on these sites
based on whether we achieve satisfactory lease terms. The acquisition will see
approximately GBP17m[1] of gross assets, including a fleet of mobile repair vans
to service customers in their location, as well as approximately 2,300 of
Nationwide staff, transfer to the purchasing subsidiary.

The acquisition is expected to be earnings enhancing in the first full year of
ownership as well as delivering a post-tax return on invested capital
comfortably in excess of the Group's weighted average cost of capital.

The acquisition, which will be funded from existing facilities, further
reinforces the strength of Redde Northgate's proposition, extending the Group's
existing capabilities in Service, Maintenance and Repair services. Before this
transaction, in the UK, Redde Northgate did not have in-house capability for
repairs, but has long considered building capability in the UK as the Group
already successfully runs repair centres in Spain. This transaction offers the
Group the opportunity to deliver on that goal quickly, with a strong team, well
located sites and an existing flow of business, utilising surplus repair
capacity with its own volumes.

Commenting on the acquisition, Martin Ward, CEO of Redde Northgate, said

"At the time of the Redde Northgate merger, we set out our vision to become the
leading integrated mobility solutions provider. This acquisition, our first
post-merger, is in line with that vision and significantly increases our
strategic and operational capability to support a wider number of business
partners requiring automotive repairs. We expect this acquisition will open up
new markets to the Group, and in combination with an established pipeline of
repair work from existing Group companies, such as FMG, it is well placed to
maximise future opportunities.

We welcome those Nationwide colleagues who will be joining the Redde Northgate
Group and we look forward to creating new value and service offerings for all
our stakeholders."

For further information contact:

Buchanan

David Rydell/Jamie Hooper/Tilly Abraham [phone]
5000

Notes to Editors:

Redde Northgate plc is a leading integrated mobility solutions platform formed
in February 2020 following the all-share Merger of light commercial hire
business Northgate plc and Redde plc, the provider of incident and accident
management, legal and other mobility-related services.

The Group provides mobility solutions and automotive services to a wide range
of businesses and customers spanning the vehicle life cycle across vehicle
supply, service, maintenance, repair, recovery, accident and incident
management and disposal through sale or salvage.

With an extensive network and diversified fleet of over 110,000 owned vehicles
and over 400,000 managed vehicles in more than 100 branches across the UK,
Ireland and Spain, the Group aims to utilise its scale, reach and comprehensive
suite of integrated services to offer a market-leading customer proposition and
drive enhanced returns for shareholders.

Further information regarding Redde Northgate plc can be found on the Company's
website:

www.reddenorthgate.co.uk

[1] Gross assets consist of properties, plant, machinery and stock. Value is an
estimate and unaudited at this stage.

END

[rental] 03/9/2020 21:41

Van prices still sky high
Basically impossible to buy anything at anywhere near cap prices, most are £2000 over cap on average so for example today many cap at 10200 plus vat 3 year old and selling for over £12000 plus vat at BCA

Premium cars are also a good 10 percent over cap, premium M cars 20 percent over cap guide prices which I’m guessing helphire side of redd run on their fleet.

[skinny] 01/9/2020 08:00

.

Redde Northgate plc (LSE:REDD), the integrated mobility solutions provider,
notes recent media speculation about its interest in Nationwide Accident Repair
Services.

The Company confirms it is in advanced discussions about a possible transaction
involving Nationwide Accident Repair Services. The Group believes the network
of body shops and customer base would be a good strategic addition to its
business.

There can be no certainty that a transaction will be entered into, nor the
terms of any such transaction. If a transaction does take place, it will be
funded through the Group's own cash resources. A further announcement will be
made when appropriate.

The individual responsible for releasing this announcement is Nick Tilley,
Company Secretary.

[rental] 23/8/2020 11:59

used van prices still well over 25 percent higher than normal

rental prices beginning to rise due to van shortage and increased demand around 16 percent on new business.

difficult to try a raise rates on existing business in these times.

[lestat102] 13/8/2020 11:34

Yes but very comforting to have the market cap more than covered by net tangibles. This has to be way too cheap..

[riverman77] 12/8/2020 22:10

Technically they probably could, but would never actually happen as there would be no business left! However they could certainly sell a good chunk to reduce debt and boost earnings/book value.

[lestat102] 12/8/2020 14:51

Could this company sell their entire fleet and return £2 odd to shareholders. Am I reading this right? ( if so the business is in for free ? )

[riverman77] 11/8/2020 10:57

Thanks for the info. Let's hope they've sold some of their stock to take advantage, given this is trading at substantial discount to book value it would certainly make sense.

[rental] 11/8/2020 02:50

Hi river, I know van monster well
I wrote the business plans many many years ago.
Unfortunately the van monster centres are very tired, I wouldn’t buy from one.

I have had no connection with any part of redd for 18 years
Apart from a major holding in HHR years back too.


The van shortage is due to a number of situations

One, amazon and the likes demand, more people going self employed with rented or purchased Van. Also company’s needing to rent as nothing forsale new. And of course government grants and cheap easy loans.

Two lack of new vehicles in the market,
For example enterprise cancelled all the vehicles with an unnamed manufacturer, and then the vans got snapped up by other buyers so for example enterprise has like 1 percent of these normal numbers forsale to the trade, the disposal lists are bare.

Another example, British Gas/hitachi don’t have any used vans coming up for disposal
As they either can’t or are not buying new. (I don’t know the exact reason)

Certain people snapped up all the new vehicles Available in the UK around April 20th time.

Manufacturers of vans are well behind, one missing part due to covid destroys a production line. It will get worse as suppliers to the manufacturers start to go bust due to delays,
Also the UK is a little tiny part of production, if the factory are not producing enough for Europe they made not even bother with Right Hand Drive UK with Brexit Unknown’s

3, the price of new vans due to Brexit,
Week pound and covid, and euro 6.2 new engines. New van prices are now up
£1800 average over cancelled order prices

[master rsi] 10/8/2020 08:32

Paying a lot of premium 188.30p for a large buy 26K, and it was just short of £50.000.
spread 184.8 v 185.70p

08:28:37 188.33p 26,410 49.74k

[master rsi] 10/8/2020 08:23

The shares are wanted on the order book. alreeady from the start, the order book is very strong on the bid side 28 v 18 orders

[riverman77] 09/8/2020 18:37

Based on very quick research, the shortage seems to be due to fleets holding on to their vehicles for longer than usual, causing a big drop in supply.

[riverman77] 09/8/2020 18:26

I believe REDD owns Van Monster which sells their vehicles. What is actually causing this huge demand for used vans - is it just the increase in online shopping or is there something else driving it?

[rental] 09/8/2020 17:57

Redd should now be buying a few van dealerships to market their disposals rather than be dependent on Bca and Manheim

[rental] 09/8/2020 17:55

There is only one type of winner in this van shortage, and that’s people that already own them, rental company’s and lease company’s,
Prices are sky high, dealers are desperate for stock,
Some dealers that normally stock 100 used vans for sale are down to 1 or 2 vans, the situation is crazy and has never happened before in my lifetime. Some prices are up 100 percent now from cap normal
Pricing

Rental rates will now start to rise as no one can get new vans, and we are already enjoying huge disposal prices at unbelievable high prices,


hxxps://www.motortrader.com/motor-trader-news/automotive-news/dealers-frustrated-high-van-values-auction-07-08-2020

[riverman77] 07/8/2020 16:30

Good interview, and nice to hear someone positive on REDD which has been such an unpopular stock for so long. He obviously highly rates the new management team and thinks they can turn this around. The demand for used vans right now is another big plus. The Redde-Northgate combination should also bring better diversification of revenues and good synergies (Richard mentioned shared depot, maintenance and sales costs).

[master rsi] 07/8/2020 16:06

re -Richard Leonard

That is a very bullish interview on REDD not only short term but also longer term he reckons.

[approach3] 07/8/2020 13:07

Excellent listen Tomps. Lets hope Richard Leonard is right.

[tomps2] 07/8/2020 11:11

piworld interview with Richard Leonard covers REDD at 42:52.

[rental] 05/8/2020 22:07

hxxps://www.am-online.com/news/market-insight/2020/07/23/used-lcv-values-rose-by-208-in-q2-reports-aston-barclay

Soaring demand for vans after COVID-19 triggered a home delivery shopping culture across the UK triggered a 20.8% rise in used values during Q2, according to Aston Barclay.

The independent remarketing specialist, which continues to operate wholly online in response to the pandemic’s impact on its auction houses, said the average price of a used light commercial vehicle (LCV) had risen to a new all-time record of £5,949.

“We don’t know when the prices will stabilise, although moving into July prices have cooled slightly as supply has started to improve,” said Geoff Flood, Aston Barclay’s national LCV manager.

Geoff Flood, Aston Barclay’s national LCV manager“However, there is likely to be a shortage of stock during the summer as OEMs get production levels back to normal before fleets kickstart their replacement programmes.”

The PSA Group was one manufacturer that appeared to identify high demand for LCVs as a key priority in the post-lockdown trading environment, prioritising the return to operations for its Luton factory over that of Astra-producing Ellesmere Port last month.

Aston Barclay reported this week that more dealers chased fewer available used LCVs in the market during Q2, particularly when franchised dealers opened for business on June 1 – triggering a dramatic rise in competition for stock.

It said that between 330 and 360 online buyers were logged on for each sale with all types of vans and chassis cabs finding homes.

Even a £3,000 van with £2,000 of damage sold above book, Aston Barclay said.

The only vehicles that have struggled are nine-seat minibuses as they do not work currently for operators based on current social distancing rules.

A statement issued by the remarketing provider said that it had continued to sell used vans online during the lockdown as sectors like home delivery experienced a peak in demand.

Those dealers who saw stock depleted during lockdown were then faced with buying replacement stock for more than their original retail sale which has caused challenges on cashflow and stocking strategy, it said.

Double-cab pick-up prices also rose in Q2 by 4.2% (£312) on the back of a marked fall in average age and mileage to 60 months and 65,000 miles.

Just last week Aston Barclay reported that the strong re-start to post-lockdown trading had also seen used car values rise to record levels for a Q2 auction sales period – with older cars and diesel vehicles leading the way.

It reported that stock between 55 and 78 months had generated a 20.6% (£1,318) rise in values during the period to £7,708.