Redde Northgate Share Discussion Threads

[fenners66] 06/7/2022 10:07

Rental - re debt - are you and I reading the same set of accounts ?

[rental] 06/7/2022 10:05

Well I think we Doing a lot lot better than we are letting on here, it’s pretty obvious why, so they can continue and renew another share buy back program so as to pick the shares up at a cheap rate,

The question is why the buybacks and holding the price back still before letting on how good things really are at Redd,

I’m very confident if things stay how they are Redd could have it’s debt to zero in 30 months.

[fenners66] 06/7/2022 08:39

This bit was telling, and I am glad it's included

" The overall cost of borrowings at 30 April 2022 is 1.9% (2021: 2.0%).

The margin charged on bank debt is dependent upon the Group's net debt to EBITDA ratio, ranging from a minimum of 1.45% to a maximum of 3.25%. The net debt to EBITDA ratio at 30 April 2022 corresponded to a margin of 1.95% (2021: 1.85%). "


Essentially they are admitting , that which I have been arguing about elsewhere, that borrowing to do buybacks actually reduces earnings , here because , 1 its more borrowing , 2 it costs a higher rate on all borrowings.

So whilst there is a technical chance (all other things being equal - no guarantee) that EPS rises because of declining shares, there is the certainty of reduction in earnings through lower profit - more interest cost and no doubt more refinancing costs in the future.

Stop the pointless buybacks and concentrate on growing profit and cash rather that reducing shares !

[fenners66] 06/7/2022 08:31

I did get down to cash flow and free cash flow.

I have to say that explaining away the cash flow as "steady state" if you ignore "growth capex" is BS.

A rental company that buys cars to rent and calls them capex is kidding no one.

May be following accounting standards , but essentially rental cars are stock and replacing stock is what
they have to do not treat it as ignorable "growth capex".

[fenners66] 06/7/2022 08:28

Just reading through the results, ongoing....

One thing that struck me , was how difficult it is to find a reasonable definition of "underlying earnings"

There needs to be a clear reasoned explanation much earlier in the report.

[zho] 06/7/2022 07:49

I've only just noticed today' results.

Eps of 41.3p well up from last year's 26.6p (good), but way below the consensus of 48.7p given on REDD's web pages (bad).

Edit: Although "Underlying EPS was 50.8p (2021: 31.0p), 63.9% higher than prior year with an average share count of 246.0m (2021: 246.1m). Statutory EPS was 41.3p (2021: 26.6p)."

[rental] 05/7/2022 06:21

I’ve edited a bit more rental info into my last post so will repost here also,

Expecting good results here,
My somewhat small van rental company 800 vans just completed its year and net profit was over double the yearly rental turnover, due to the vans going up in price rather than Normal price deprecation with Age,
I would expect 4 or 5 times normal yearly net profit at the very least here if they have managed to free up car and van stock to dispose off,

I would also expect a huge reduction on the borrowing, due to vehicle shortage and huge profits.

Future expectations, huge rental demand from customers due to continued vehicle shortage across the whole vehicle rental industry return higher rental rates (around 26 percent higher now to rent a van for Month), disposal prices beginning to lower since end of May 22 which peeked from September 21 to March 22

If rental demand does return to normal, then the hire company will be disposing of these vehicles at future vast profit, so win win to come, I would also say that if the company has continued to write down the vehicles at the normal level through this vehicle appreciating period then we have a event where the real net asset on the vehicles are prob 40 percent
higher than the vehicles write down figure shows on paper
at the very least,
This company will be sitting on a future gold mine now, having invested up to 3 percent in the old helphire company Myself a few years back I am very confident Avril is a pure genius in her position here and her other positions.

The only downsides the vehicle rental industry is seeing right now is rising interest rates, but the lower total borrowing the rental company needs should be offsetting this 2 fold, so should not be a downside,
Another potential downside is vehicle reliability and wait times for vehicle warranty repairs at main dealers, the new adblue engine era should be more reliable than they actually are, main dealer staff shortages exist with like up to 6 week wait times for repairs, but again I think Redde has it’s own mechanics that are authorise to carry out warrenty repairs on their own vehicles backed up by the vehicle manufacturers. So not all bad for Redde

Improvements required, some of Redde sales centres are truly shocking retail areas, have a look yourself on Google maps,

It’s clear Redd needs to now go on the acquisition approach for its own high quality commercial vehicle sales
centres, it reported 2 years ago it was doing this, but I’m fully aware this is not happening as reported previously to share holders here. I have both myself, rental and high quality commercial sales centre and this is the way to go my own net profits jumped up 650 percent once the quality sales centre build was completed.

Whatever Redde do, they have made a whole heap of money this year and will do the same or more in the next 12 month period due to real vehicle values of their vehicles over vehicle written down values for their existing vehicle assets

[zho] 04/7/2022 11:28

You've reminded me to check on what we're expecting:

"Based on the current trends the Board now expects full year underlying profit before tax for the year ended 30 April 2022 to be in the region of £150m, comfortably ahead of consensus[1] of £133.9m. The Board expects disposal profits to account for c.33% of the full year underlying profit before tax compared to c.43% in the prior year."

That works out at eps of 48.7p assuming 20% corporation tax and 246.1m shares.

[rental] 04/7/2022 11:03

Expecting good results here,
My somewhat small van rental company 800 vans just completed its year and net profit was over double the yearly rental turnover, due to the vans going up in price rather than Normal price deprecation with Age,
I would expect 4 or 5 times normal yearly net profit at the very least here if they have managed to free up car and van stock to dispose off,

I would also expect a huge reduction on the borrowing, due to vehicle shortage and huge profits.

Future expectations, huge rental demand from customers due to continued vehicle shortage across the whole vehicle rental industry return higher rental rates (around 26 percent higher now to rent a van for Month), disposal prices beginning to lower since end of May 22 which peeked from September 21 to March 22

If rental demand does return to normal, then the hire company will be disposing of these vehicles at future vast profit, so win win to come, I would also say that if the company has continued to write down the vehicles at the normal level through this vehicle appreciating period then we have a net asset on the vehicles are prob 40 percent higher than the vehicles write down figure at the very least,
This company will be sitting on a future gold mine now, having invested up to 3 percent in the old helphire company Myself a few years back Ii am very confident Avril is a pure genius in her position here and her other positions.

[bc4] 18/5/2022 09:00

A bit slow at first but picking up nicely now

[skinny] 18/5/2022 07:10

.




Strong FY2022 performance across the Group

Redde Northgate (LSE:REDD), the leading integrated mobility solutions platform providing services across the vehicle lifecycle, today announces its pre-close trading update for the year ended 30 April 2022, ahead of its results for the full year scheduled for Wednesday 6 July 2022.

Group trading

The Group has continued to trade well across the business and performance for the full year is expected to be in line with the upgraded expectations set out in the Group's trading update on 15 March 2022.

Based on unaudited results, underlying revenues (excluding vehicle sales) were approximately 24% higher than FY2021 and total Group revenues (including vehicle sales) were approximately 12% higher than the prior year.

As has been widely reported, global new vehicle supply has slowed and, consequently, demand for used vehicle sales has remained strong, which has positively impacted residual values. We expect new vehicle supply to continue to be tight over FY2023 due to ongoing macro events, with some moderation of used vehicle pricing.

We have focused on the effective management of both the supply of new vehicles to the business and the number of vehicles disposed, which has resulted in average Vehicles on Hire ('VOH') growing around 8% year on year. Redde volumes continue to be around 90% of pre-Covid levels, although we are seeing longer hire lengths due to the impact of macro challenges in supply chains for parts in the wider vehicle service, maintenance and repair process.

Whilst cost inflation has been felt across the Group, it continues to be carefully managed and margins have been in line with expectations. Underlying cashflow generation remains strong and the business operates with significant headroom on its committed facilities following the refinancing in November 2021.

Outlook

The ongoing macro challenges in the global automotive supply chains look set to continue in the short term, albeit expectations for a recovery next calendar year are growing. On this basis we expect to retain more of our van fleet this year and limit disposals in order to meet customer demand, and to grow our car fleet in line with our strategy.

With strong performance in all areas of the business and supplemented by previously announced new business wins, the Board expects to see another year of progress in FY2023.

Commenting on the trading update, Martin Ward, CEO Redde Northgate said:

" We have delivered a very strong trading result this financial year. The breadth of services and products offered through our mobility platform has extended our reach with existing and new Partners. We have continued to enhance our model, with multi-year service contracts providing ongoing repeatable revenues and earnings. With significant further opportunity for growth, and building on the strong performance and momentum in the business, we look to the future with confidence."

Notice of results

The Group is planning to announce its preliminary results on 6 July 2022 and publish its Annual Financial Report shortly thereafter. The Group's interim results for FY2023 is expected to be announced on 7 December 2022.

Presentations will also be made available via a link on the Company's website: www.reddenorthgate.com .

For further information contact:

Buchanan

David Rydell/Jamie Hooper/Hannah Ratcliff/ Verity Parker [phone]

[purplepelmets] 18/5/2022 07:08

Surprisingly upbeat TU this morning. Margins unaffected, nice going lads. Expecting this to get back above 400p in short order.

[bc4] 13/5/2022 08:50

No there will be a pre-close update in May

The Group plans to announce a pre-close trading update for the year ended 30
April 2022 in May 2022, ahead of the publication of its full year results
scheduled for July 2022.

[zho] 12/5/2022 14:37

>>Pre-close update soon 12/05/2021 last year>>

Pre-empted by the 15/3/22 TU I would have guessed. If so we'll have to wait until early July for results to end April.

[bc4] 11/5/2022 09:35

Pre-close update soon 12/05/2021 last year

[zho] 01/4/2022 13:39

It may well do but those figures have been changed within the last week.

[piwood] 01/4/2022 12:10

The REDD website states the information on this page was last updated on 10th January 2022.

[zho] 01/4/2022 11:55

The REDD website now shows consensus eps to 4/2022 increased from 38.6p to 48.6p, and to 4/2023 from 45.5p to 46.8p.

[skinny] 16/3/2022 16:07

Yes, quite amazing.

[deanowls] 16/3/2022 16:04

And the buyback seems to be working over a two day period!

[deanowls] 16/3/2022 14:41

Last accounts show 267p of tangible assets that I think are not in the price.

[zho] 16/3/2022 14:02

Barclays have increased their target price from 516p to 556p

[rmillaree] 16/3/2022 08:29

The problem was the ridiculous certainty of your comment thats its a bad idea buying back shares - my comment was really crass back at crass unfortunately in its tone in that regard.

I am well aware of the subtleties here as you are too.

Hey ho - you could be right here ref sharebuybacks - i guess shareprice in 24 months will be reasonable test in that regard.

Me i am more than comfortable with sharebuybacks at current price.

[fenners66] 15/3/2022 20:48

rmillaree
15 Mar '22 - 17:44 - 4597 of 4598

"I always think the easy solution if you dont think buybacks are good value - sell up and move on."

I always think that type of statement is crass.
After all its not binary - buy companies that do/don't do buybacks or vice-versa.

We buy shares in companies that we expect :-
1 they know how to run a business and grow it
2 its profitable and may pay a dividend
3 the shares are cheaper than you expect them to be later (though if they pay a high dividend the so what if they stagnate)
4 they have barriers to entry and can hold onto their business etc. etc.

They might do all that and buybacks - which I disagree with but that alone does not necessarily wreck the other elements.

Put it another way , ever voted for any party at an election?
Did you agree with Everything they did?
Can you give them your support and disagree with some bits?

However there are masses of buybacks that overpay - then as soon as the buyback , ie temporary contrived demand for the shares, ends , the share price slides.

[grahamburn] 15/3/2022 18:27

Well done, km18. UP-TO-DATE. You will know what is meant by that, even if others do not.