Redde Northgate Share Discussion Threads

[rmillaree] 05/7/2023 09:57

Debt up, cash generation down...

Huh - what on earth are you expecting here ?


Revenue has gone up from £1.25 bill to £1.5 bill
they had net capital expenditure on new vans of £278 mill - half of which is growth capex.
Bearing in mind they earn their crust by having more vehicles - them having more vehicles available to hire should be an obvious plus point not a negative (unless you take viewpoint they are expanding at the wrong time)

Proof of the pudding is plant book value is up £171 mill - thast materially more increase than increase in debt.

I have no idea why you are surprised the extra investment in vehicles (and company acquisitions) would add to debt medium term. Note debt is half the value of the plant - so presuming they can sell vehicles at anything like book value the debt is a non issue. If work does dry up they simply sell their vehicles. Ie debt simply tracks the size of the sales and fleet - albeit investment will normally be front loaded - ie you buy a van then start earning from it !

[johndoe23] 05/7/2023 09:32

Debt up, cash generation down...

[rmillaree] 05/7/2023 09:16

Nothing not to like here - the only real issue is they have ben in such a sweetspot ref demand and supply - i can only think the market doesnt believe they would do nearly as well if supply exceds demand. That is a slight woryy if van production ramps up so manufacturers need to sell them dirt cheap - could they still command great margins. Nowt we can do about that posibility and i am 100% satisfied with how the board run teh company - they seem to be doing enough to me to make the ups and downs of van prices and supply demand les of an issue - ie providing long term value added service hopefully for more of their customers.

[deanowls] 05/7/2023 09:07

Madness. Can’t believe understand that myself.

[ttny2004] 05/7/2023 07:59

Agree. Me too!Be interesting to see what the share price does as seems too cheap.

[deanowls] 05/7/2023 07:40

A PE of around 7, cracking divi and tangible assetts of 3.28.

Way under valued.

[rcturner2] 05/7/2023 07:35

Superb set of results, even exceeds what I was expecting.

[deanowls] 04/7/2023 09:34

Results tomorrow

[rcturner2] 13/6/2023 16:38

I would say so, it is covered more than 2 times.

The PE is about 7, so not expensive.

[netcurtains] 13/6/2023 11:49

I like the look of the dividend.
I like the NAV
I like the cash
So I bought this too.

Is the 5.85% dividend yield reasonably safe?

[disc0dave45] 18/5/2023 15:53

Can't find how much they paid but from FridgeXpress accounts their net book value was £14.8m at 31st March 2023.

[disc0dave45] 18/5/2023 15:18

deanYeah I appreciate that, and as you say asset backed, circa £1.1bn from memory.

[approach3] 18/5/2023 13:32

Do's anyone know how much was paid for FridgeXpress.

[deanowls] 18/5/2023 12:56

I’d expect it to Dave, unless they sweat assets more they need to buy more cars, all about the margin difference and these guys know how to do that.

All asset backed as well.

[disc0dave45] 18/5/2023 09:48

Looks okay, just net debt has increased quite a bit.

[swiss paul] 18/5/2023 09:04

Pre-close Trading Update

Strong FY23 performance across the Group

Acquisition of specialist refrigeration vehicle provider, FridgeXpress



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 2023, ahead of the announcement of full year results scheduled for Wednesday 5 July 2023. Redde Northgate also announces the acquisition ofFridgeXpress (UK) Limited("FridgeXpress"), a leading provider of specialist refrigerated vehicles to a broad range of commercial customers in the UK.



Group trading

Trading across the Group remains strong 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 19 April 2023.

Based on unaudited results, underlying revenues (excluding vehicle sales) are c. 22% higher than FY22 and total Group revenues (including vehicle sales) are also c. 22% higher than the prior year.

Whilst cost inflation has been felt across the Group, it continues to be carefully managed and margins have been in line with expectations. The business operates with significant headroom on its committed facilities with net debt at the year-end of £694m.



Acquisition of FridgeXpress

Redde Northgate plc also announces that it has completed the acquisition of FridgeXpress, a leading provider of specialist refrigerated vehicles to a broad range of commercial customers in the UK. Founded in 2008 and based in Rugby, the business provides over 600 chilled and freezer vans and trailers to more than 100 customers nationwide, principally in the pharmaceutical and food sectors.

The acquisition is expected to be earnings enhancing in its first full year of ownership and will broaden Northgate Vehicle Hire's range of specialist LCVs in the UK. It follows the July 2022 acquisition of traffic management specialist Blakedale, which has grown its fleet by over 30% in the past year.



Commenting on the acquisition and the performance of the Group, Martin Ward, CEO Redde Northgate said:

"With FridgeXpress, we continue our record of acquisitions offering significant potential for growing both customers and fleet. It has an impressive track record and an excellent reputation in its specialist sector and this acquisition extends our UK capabilities.

In respect of the unaudited results, we are very pleased to have maintained such a strong trading performance through FY23, whilst executing the strategy we set out to build a broad platform of integrated mobility services. Demand continues to be robust as we start FY24 and as we continue to make progress with our strategy the Group sees a number of exciting opportunities across the business to create long-term value for shareholders."





Notice of results

The Group is planning to announce its preliminary results on 5 July 2023 and publish its Annual Financial Report and Sustainability Report shortly thereafter.

[zho] 17/5/2023 15:30

Yes, tomorrow:

[disc0dave45] 16/5/2023 09:39

Possible pre close trading update this week?

[zho] 14/5/2023 15:59

Redde Northgate (REDD) – this commercial van hire and accident management service provider has a lot of operational reasons why its rating is low but many of those reasons are also the seeds for what might make this a far more attractive business at some point. However, the changes that would be needed are substantial and their impact is likely to be long-dated; stocks tend not to re-rate on things that could or should happen but that are not in train. The seeds for change are present but do still need to be planted. However, if one is willing to take a 3-5 year time horizon, more meaningful capital gains are possible and there is the cushion of a well-funded 6 per cent yield while you wait. 

[zho] 23/4/2023 12:26

Very good value, says Paul Scott, although such businesses never seem to achieve high ratings.

from 21:25

[zho] 19/4/2023 16:56

Before today’s update analysts at Numis had a 500p price target on the stock while Barclays had a 556p target, so we would expect both firms to crank up their valuations along with their April 2024 and April 2025 earnings forecasts.

[rcturner2] 19/4/2023 16:29

Tough market at the moment with the inflation news and interest rate outlook.

[johndoe23] 19/4/2023 13:58

No position but was expecting more of a rise today, possibly?

[skinny] 19/4/2023 09:38

A pleasant surprise this morning!