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NTG Redde Northgate Plc

250.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Redde Northgate Plc LSE:NTG London Ordinary Share GB00B41H7391 ORD 50P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 250.00 249.00 250.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Redde Northgate Plc Pre-close Trading Update

19/05/2020 7:00am

UK Regulatory


 
TIDMREDD 
 
19 May 2020 
 
                              REDDE NORTHGATE PLC 
 
              ("Redde Northgate" or the "Group" or the "Company") 
 
                           Pre-close Trading Update 
 
Redde Northgate plc (LSE:REDD), the integrated mobility solutions provider, 
today announces its pre-close trading update for the year ended 30 April 2020. 
 
Group trading 
 
As stated in our announcement of 24 March 2020, up until the end of February, 
trading for the Group was in line with market expectations for the financial 
year. However, as previously announced, there was an impact from Covid-19 on 
trading in March and April, and the Group has suspended all forward guidance 
until the impacts of Covid-19 on the business become clearer. 
 
Based on unaudited results, Redde Northgate can report that revenues from the 
Northgate business were 4% lower than the prior year, including the impact of 
Covid-19 in March and April.  Total Group revenues were 5% higher than the 
prior year, with the increase year on year attributable to Redde's performance, 
which is included in Group trading following completion of the merger on 21 
February 2020. 
 
Further, up until the end of February, underlying Group PBT margin was in line 
with Board expectations. However, in March and April underlying Group PBT 
margin was lower, affected by the aggregate impact of reductions in trading 
volumes, flexible support schemes provided to customers (detailed below) and 
cost actions implemented. 
 
Covid-19 update 
 
As announced on 24 March 2020, the Board took decisive actions to put measures 
in place to protect the welfare of our employees and to mitigate the financial 
impact of Covid-19 on the Group. 
 
In detail, these actions included implementing new guidelines and controls to 
enable employees to work with social distancing in branches and offices; 
furloughing employees across all areas of the business as necessary; limiting 
capital expenditure on new fleet purchasing for essential requirements only; 
using nearly new vehicles to stand in for new purchases where suitable; 
voluntary pay reductions across the Board, senior leadership team and managers; 
other cost control measures, including a freeze on recruitment and pay reviews, 
and limiting of all non-essential spend and capital expenditure projects. 
 
The Group also announced on 24 March, that it was providing flexibility to its 
rental customers to support them through these difficult times.  Our Covid-19 
package of support, assessed on an individual basis, has helped many customers 
retain rental vehicles during the current Covid-19 uncertainty on terms that 
meet their needs.   Whilst in place, the impact of this scheme on Group rental 
revenue is approximately GBP3-4m per month. 
 
Further, a proportion of the Redde fleet of cars has been deployed to support 
an NHS and key worker replacement vehicle scheme launched by a long-standing 
insurer partner. These support measures are our way of contributing to the 
national effort and of strengthening our bond with customers and business 
partners at a time when most needed, and we look forward to continuing to 
support them in the future. 
 
However, not all customers could justify continuing with all their rental 
vehicles and have naturally made some returns in these circumstances.   The 
impact of this was reduced as the Northgate businesses also provided a number 
of additional vehicles to support supermarkets, pharmaceutical companies and 
other essential businesses to deal with their increased demand. The net number 
of vehicles returned to branches from lockdown up until the end of April was 6% 
in UK&I and 7% in Spain.  These have been processed and largely held on the 
fleet pending a final decision as to whether any fleet is excess to future 
rental demand and should be disposed of.  The disposal market has mainly been 
closed during lockdown, which has reduced revenue from vehicle sales and 
disposal profits.  Disposal channels are starting to re-open as lockdown 
restrictions are eased. 
 
Within the Redde businesses, revenues also reduced, as lockdown resulted in 
accident and incident volumes declining steeply as a consequence of fewer 
vehicles on the roads and a reduction in road miles driven. Volumes of 
accidents and incidents have remained low during April, but we would expect 
these to increase as traffic volumes increase. 
 
Net debt and headroom 
 
Since the announcement on 24 March, the Group has generated further headroom to 
its bank facilities, as a result of the cash and cost measures put in place, 
increasing the available headroom from GBP200m at the end of February to GBP234m as 
at the end of April.  The Group continues to operate with considerable 
flexibility within its banking covenants. 
 
It is still too early to make any precise assessment as to the ongoing revenue, 
earnings and cash impacts Covid-19 will have on the Group. However, we have 
undertaken detailed modelling of various scenarios and are using a base case 
and downside set of assumptions to scenario plan outcomes which are evolving 
and updated regularly.  The current base case assumptions include lockdown 
continuing during May and a slow easing of restrictions over the following two 
months, then a gradual return to a more normalised trading environment by the 
end of the financial year, whilst the current downside assumptions include two 
more months of lockdown to end of July and a slow easing of restrictions over 
the following three months, then a gradual return to a more normalised trading 
environment over a longer period.  Based on the analysis of the base case and 
downside case scenarios, we do not anticipate having to secure any additional 
funding requirements for Covid-19 purposes. 
 
Integration 
 
As stated on 24 March, integration plans have started well. Despite Covid-19, 
excellent progress has been made in integrating the businesses, and we have had 
a very positive start to the delivery of the run rate cost synergy targets as 
per the Circular dated 12 December 2019, as well as identifying new synergies 
and cost savings.  The Group looks forward to providing an update on the run 
rate of savings in its preliminary results announcement. 
 
In delivering these synergy benefits, the organisational structure of the 
Company has been re-shaped to make it more effective as an enlarged business. A 
new Group management team has been appointed for the UK & Ireland business and 
the experienced Northgate Spain leadership team has been retained.  Support 
functions such as HR, IT, fleet and finance are now successfully combined 
across the Group in UK&I with enhanced representation on the management board. 
 
Results and dividend 
 
The Group is planning to announce its preliminary results on 16 September 2020 
and publish its Annual Financial Report shortly thereafter. The Group sees this 
delay from its normal reporting timetable as a prudent and practical measure 
which is in line with the Temporary Relief Statement announced by the FCA on 26 
March 2020, to allow sufficient preparation time following the disruption 
caused by Covid-19. 
 
The Board is aware of the importance of dividends to its shareholders and, 
after careful consideration of the factors impacting this decision, will 
provide a further update at the time of the preliminary announcement of 
results. 
 
Commenting on the trading update, Martin Ward, CEO Redde Northgate said: 
 
"I continue to be impressed by the effort of our colleagues who are committed 
to doing what is necessary, without fuss, in these difficult times. They have 
shown a sense of community and togetherness in supporting our customer and 
partner organisations with their mobility requirements during the extended 
lockdown period, with many making personal sacrifices to support the Group's 
efforts. 
 
Our liquidity position has grown over the last two months and the business 
model has proven to be resilient during these times. Inevitably, there is going 
to be an impact from Covid-19 on revenues and earnings and considerable 
uncertainty remains. However, it should not detract from the purpose that we 
have to build on our integrated mobility proposition as an enlarged group and 
drive opportunities wherever possible. For now, we are doing what is necessary 
to preserve cash, protect our financial position and to secure a long-term 
future for all our stakeholders." 
 
For further information contact: 
 
Buchanan 
 
David Rydell/Jamie Hooper/Tilly Abraham                        +44 (0) 207 466 
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 
 
 
 
END 
 

(END) Dow Jones Newswires

May 19, 2020 02:00 ET (06:00 GMT)

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