Redde Northgate Share Discussion Threads

[retailronnie] 10/8/2022 16:36

"It continues to see exciting opportunities to deploy capital organically and has a good M&A pipeline. Even after taking into consideration capital to fund organic growth, payment of dividends in line with the Company's dividend policy and acquisitions within the M&A pipeline, the Company has substantial headroom under its facilities and target leverage of 1-2x."

They sound pretty confident.

[zho] 10/8/2022 11:28

Stinking or stonking?

[deanowls] 10/8/2022 11:26

Actual asset backed NAV of 260p and a stinking dividend, buy backs, more efficiencies to come, new contracts starting, a car and can hire squeeze some generating more per car. What’s not to like.

[swiss paul] 10/8/2022 08:59

Not according to them they blame it on people not wanting to release them in sufficient size.
As an aside most organisation that I know who were doing buybacks have suspended them and are hoarding the cash - its a bit of a bumpy road ahead!

[purplepelmets] 10/8/2022 07:10

Buyback extended through june 2023 and another 30m squid
Bit of a relief tbh. I think REDD is about the only one out there buying REDD shares.

[rental] 28/7/2022 09:17

john, I meant not posting any more on certain repeat discussion,

weak holders taking small profits hopefully have now all jumped ship and we can start rising up again.

Used Van Prices are now rising again, there is a fear of the worse van shortage situation ever from October 22 onwards all through to very late next year (dec 23) if so, and I am very confident of this myself due to future new supply numbers on new vans, Van Rental Prices will rise further, and disposal prices will leg up again many times over next 12 Months, Could be another "depreciation free" 12 Months for all the rental and lease fleets.

[johnrxx99] 26/7/2022 06:51

Will this have an effect?

[johnrxx99] 25/7/2022 09:30

Rental - I thought you said you're not posting any more.

[rech] 22/7/2022 12:28

Hi rental, I'm rather amazed that the biz model survived the insurer backlash. The old FD, wasn't in any rush to find further employment. In his late dad's words, "he's not short of a bob or two"!
Just a token amount of REDD shares left, I'd sold the lot in my late mum's estate, but then more appeared (div auto reinvestment).

[rental] 22/7/2022 11:35

Hi rech, i held 2.9 percent of hhr for many years, done very well, but so wish i would have kept them, I spoke to the old FD many times and was a nice chap he supported the same football team as me.

[purplepelmets] 21/7/2022 19:46

Hellfire was the all time coolest name for a PLC. I remember working at a brokerage and we all fell about in uncontrollable laughter when the boss said it was one to push
Edit because how i read outloud the name, no disrespect to the comp

[rental] 20/7/2022 09:00

i like these steady daily rises, I think we will be at 1 billion market cap shortly

[riverman77] 19/7/2022 12:29

Car insurers all reporting huge increase in claims inflation and long delays in getting repairs done. Has to be good for the credit hire division (the old Redde).

[rental] 15/7/2022 14:28

This is certain to me as a long ride upwards now for my reasons above,
I’ve been in vehicle hire and vehicle sales for 35 years and been on Northgate's payrol 20 years ago.

[harris tweed] 15/7/2022 09:26

FWIW Shares magazine have REDD as a buy as this week's 'bright idea'. They conclude "Redde Northgate has it all: cheap valuation, 6.25% yield and growth".

[fenners66] 07/7/2022 17:57

So (and I was not being selective before they were just the first figures I found)

The UK arm

"Disposal profits of GBP44.8m (2021: GBP37.3m) increased 20% versus the prior year. The reduction in the number of vehicles sold was offset by the significant increases in sales values resulting in an 82% improvement in the average profit per unit (PPU) on disposals to GBP4,300 (2021: GBP2,360). "

on the UK fleet they are already recording £4.3k
I guess the question is why the Spanish fleet is so far behind ?

But why already flag this up with anticipated lower depreciation and lower disposal profits offsetting and not flagging more profit to follow ?

Perhaps they are forecasting a return to normal on disposal profits ?
They have extended the life of vehicles as they cannot get replacements - maybe they see this as holding back disposals until the new market / second hand market gets back to normal?

[rental] 07/7/2022 16:58

I’m not posting any more after this post

Firstly Trust Me Redde get it, avril is as sharp as you will ever find,
Vehicles purchased in 2020 2021 and early 2022 on old 2021 deals are going to be worth around £10k over the write down figure, fact
Mine our and others I know who own rental company’s, there’s are too. Fact,

The accounts will not show this full stop, that’s normal.
When we apply for large credit we now show the lender the written down values and also add the trade/retail value of the vehicle to show the massive un accountable net worth we are sitting on, it does not show on the accounts until we have disposed of the asset

Please if you don’t believe me maybe write to redd or speak to another vehicle rental Company owner,

My question is why are they not letting us know on the RNS, to me I think something will be going on in the background maybe a MBO or another merger with probably constellation group (another Avril Company), please Google them, they have bca, Webuyanycar cinch marshals recently and many more.

Im telling you now there is a gold mine here of Net Asset correctly not shown on the accounts.

1 year old vans were selling for say £13995 plus vat
In June 2020 (2k over right down average at June 20), the same vans Now sell one year old at £21995 plus vat for example.
These 1 year old 21 Reg vehicles were purchased at the same price we were paying in 2020.

So I will 100 percent stick with my 1 billion of vehicle worth over write down value on 110000 vehicles thanks
And confrim Redde have done nothing wrong with the accounts, the vehicles just didn’t deprecated like there were correctly written down too each month, they appreciated in value instead, which never ever happens normally as we know. As new vans arrive used vans will be sold, cars have risen even more than vans.

That’s it im out

[fenners66] 07/7/2022 10:14

rental - you say I don't get it.

But since I am quoting from the accounts , you mean you are saying Redde don't get it !

Really?

They are being explicit with the disposal profits , such as with Spain :-

"A total of 6,100 vehicles were sold in Northgate Spain during the year, 47.4% lower than prior year reflecting the restricted market supply of new vehicles in the year.

Disposal profits of GBP5.3m (2021: GBP2.9m) increased 79.8% including a GBP4.0m headwind relating to previous depreciation rate changes. The reduction in the number of vehicles sold was offset by the significant increases in sales values resulting in a more than threefold improvement in the average profit per unit (PPU) on disposals to GBP870 (2021: GBP 254)"

That is what is indicated for future returns in the previous quote.

Even 110,000 vehicles at £870 each is only £96m so your idea of a £bn is way over the company's own figures.

[rental] 07/7/2022 09:38

Nope you still don’t get it,

The impact on todays profit today is still there, like 10 fold normal profit

The vehicles have not deprecated at all in last 18 months, but redd have been writing them down still at normal levels up and to may22,
Therefore because the vehicle real worth have actually gone up there are maybe worth £10k each over todays write down figure,

They should have halted writing down vehicles last July 21 but they didn’t,
Which means the massive accounts profit is to come and now, and over the next 2 and 3 years on disposals

What redd are Saying is Rental turnover without the diposoals took into consideration will show as higher profit now as the write down is less.

It’s all win win whatever,
And Redd are sitting on a goldmine of profit to release as they sell vehicles after the rental life.

Watch the share price rise when investors start asking the question
“””; how much are the vehicles worth today over the written down value”””
Maybe 1 billiion than the written down value on 100000 vehicles, which all could this extra profit could be released over the next 18 months with ease,

Just look at the accounts of someone like Scot Group who have been selling their ex rentals at 6 to 12 months old.

[fenners66] 07/7/2022 00:39

rental - I understood what you were saying , but

the notes already explain the future impact and as best as they understand it , it is not what you are expecting....

" Residual values have increased significantly over the previous two financial years due to the disruption of new vehicle supply which has increased demand for used vehicles. Up to this point, no changes have been made to depreciation rates on existing fleet vehicles as the extent and longevity of this buoyancy in residual values has been uncertain. However, it has continued for longer than anticipated and uncertainty remains over how long it will take for supply of new and used vehicles to return to a more normal level.

For this reason, there are a number of vehicles on our fleet where the depreciated book value is below or very close to the expected residual value at disposal. In line with the requirements of accounting standards, a decision has been made to reduce depreciation rates from 1 May 2022 on certain vehicles remaining on the fleet which were purchased before FY2021.

The impact on the statutory income statement over the remaining holding period of those vehicles is expected to be as follows:


GBPm FY2023 FY2024 FY2025 FY2026 FY2027 Total
Reduced depreciation 54.6 30.9 8.2 0.3 - 94.1
Reduced disposal
profits (7.8) (40.4) (38.0) (7.0) (0.9) (94.1)
Impact on statutory
EBIT 46.8 (9.4) (29.8) (6.7) (0.9) -
---------------------- ------- ------- ------- ------- ------- -------


The impact of the changing depreciation rates on this component of the fleet will re-phase statutory EBIT over the next 5 years but will have no impact on underlying results and no overall impact on statutory profit over the life of the fleet. The changes are non-cash items. "


So a boost in the next period but that reverses afterwards.

Also you will note that disposal profits

"Disposal profit 50.1 40.2 9.9 24.6%"

Up by 9.9m on last year , or £90m already accounted for , did nothing for debt

"Closing net debt 582.5 530.3 "


With some of that broken down as

Lease liabilities 52,524 32,375
Short term borrowings 21,007 12,159
Lease liabilities 111,755 96,093
Long term borrowing 421,822 400,885

So a bigger Disposal profit this year than next and debt rising at the same time.
They have effectively borrowed cash to pay for the buyback and more to come
So no.
debt will not be paid off
they are not as prudent as you.

[rental] 06/7/2022 20:52

Fenner66

You not getting what I’m saying above,

A Vehicle is written down to say £4000 on the accounts but it’s actually worth £14000 when sold and that’s its true value not shown in the accounts, you can’t appreciate vehicles in your accounts,
So when redd turns say 60000 thousand vehicle stock to new over next 24 months, an extra £600 million profit should
Be available over the normal asset release figure to reduce debt or buy shares.
Vehicles numbers will also drop as you just can’t get the vehicles and the old vehicles will be too tempting not to sell at high profit over write down. The fleet will shrink over the next 12 months, rental rates will go sky high; nothing now will stop rental prices rising further,
Some rentals company’s are just packing up and selling their vans, as they can’t get any more and the owners are retiring on huge vehicles profits.

So the net book value is not actually
Correct, this is completely normal for a rental company but the gap use to be £1000 or £2000 a van, it’s now more like £10000 to £12000 over written down value for every van

My own vehicles are worth at least £8 million over the net book value and we have stopped writing our vehicles down as there is no point any further as the gap is huge.now.,

Every time a vehicle is disposed off we making £10000 to £12000 a time profit it use to me like £1000 to £2500 per van

We have massive profit to come here at Redde, 100 Percent, it’s the same with every rental
Company I know.

A bit of natural fleet size shrinkage due to vehicle shortage and massive future disposal Profit per vehicle shoutout
Put us to zero debt within 30 Months
I will be at zero debt myself In 4 months from
Now, every rental company is going the same way due to what we hold in vehicle stock and the price they risen by, redde should he no exception, no one could mess up what has happened not even the worse run rental company.

[zho] 06/7/2022 16:15

Car market strains support Redde Northgate's margins

Tight supply supports profitability of rentals business

[fenners66] 06/7/2022 12:02

zho - going back to your edit of "underlying EPS"

this:-

"Amortisation on acquired intangible assets of GBP19,778,000 (2021: GBP19,513,000) is not classified as an exceptional item as it is recurring. However, it is excluded from underlying results in order to provide a better comparison of results between periods as the Group grows through a combination of organic and in-organic growth"

There may be growth in the underlying - but the justification of it in the first place is more BS

There appears to be about 7.5 more years worth of amortisation to come so yes it certainly is recurring and that 50p figure for underlying EPS is not going to be accessible any time soon!