Zigup Share Discussion Threads

[alotto] 04/12/2024 10:10

With the average interest cost of 3.5% it makes more sense to trouble the shares yielding over 7%.
I find it hard to compare figures between equivalent periods.
There is softness in the insurance claim business, it isn't clear why that is. Shares still look cheap, 50% undervalued as a minimum.

[fenners66] 04/12/2024 09:47

This is one of those examples of "adjusted figures " trying to show that the previous years results were benefitting from an exceptional uplift on sales of cars and a return to normality.

I can't remember - will look it up later , but surely it was - if they adjusted out the good news previously.

However their adjusted figures do not match up to the previous year's so the disappointment.

What that market reaction does tell us - the buyback has no long lasting effect if the business is not growing.
Sure EPS and to an extent DPS have benefitted from fewer shares - but the market is judging the business performance and actual profits - NOT the metric per share.

Overall the numbers are ok - prospective yield is likely in excess of 7.5% at this price and this adds a source of dividend diversity from the usual pensions/investments/insurance usual suspects.

I just hope they stop splashing money on their own shares and invest in growing the business or reducing the debt - so they actually increase profit , not some metric.

[swiss paul] 04/12/2024 09:11

Yup - lets see how they manouvre this to ensure their options are in the money.I dontb remember seeing any RNS or news about this?
Exceptional cost of £2.8m arising from management of response to cyber incident in May 2024 principally impacting our legal business, NewLaw (see page 12)

Anyone recall that?

[alotto] 04/12/2024 08:43

£80 millions for H1 is not bad considering the market cap.
But results could have been more exciting.

[skinny] 04/12/2024 07:28

Key financial highlights

· Underlying revenue strong, up 5.6% with growth in both Vehicle hire (+4.7%) and Claims and Services (+6.3%); total revenue decreased by 0.8% due to lower vehicle sales revenue

· Underlying PBT of £82.0m (H1 2024: £99.1m) mainly due to lower disposal and Claims and Services profits; in addition, Reported PBT of £56.2m (H1 2024: £97.4m) includes non-cash depreciation adjustment of £13.9m cost (H1 2024: £7.6m credit) (see page 14)

· Vehicle hire revenue: Spain up over 8% supported by VOH growth of 7.4%, UK&I up 1.7% benefitting from careful pricing actions, while rental VOH down 4.6% reflecting higher defleets in H2 2024

· Resilient rental margins for both vehicle rental businesses; Spain at 19.3% (H1 2024: 20.8%) and UK&I at 15.7% (H1 2024: 16.3%) reflecting strong demand and efficiencies supporting high utilisation rates

· Disposal profits reduced to £25.8m (H1 2024: £34.7m) as expected, from lower sales volumes totalling 17,200 (H1 2024: 18,800) as well as impact from expected normalising of LCV residual values

· Claims & Services underlying EBIT of £17.6m (H1 2024: £26.3m); reduced volumes in replacement vehicles and legal services and impact of a cyber incident, in part offset by growth in bodyshop and fleet management

· Strong balance sheet with leverage unchanged at 1.6x on prior year, supported by fleet assets of £1.43bn (H1 2024: £1.23bn) and over £347m of facility headroom after £160m additional loan note financing

· Shareholder returns: 6.0% increase in interim dividend to 8.8p; £30m share buyback programme concluded in June 2024 with £5.3m returned within the period

· Exceptional cost of £2.8m arising from management of response to cyber incident in May 2024 principally impacting our legal business, NewLaw (see page 12)

[alotto] 04/12/2024 07:23

FY results a bit 'meh'

[alotto] 18/11/2024 10:37

Zho good, until there is any hard indication of any profit warning, I won't worry. Sometimes the market decides to gift patient investors.
Zigup is cheap, if the December update is consistent with the previous, I'll keep adding

[zho] 18/11/2024 10:12

He doesn't. He's saying ZIG looks "crazily" cheap .... unless there is bad news in the pipline.

[zho] 18/11/2024 09:59

FM Iain Staples +ve on ZIG, from 42:10

Too cheap on a PE of 7 and 7% yield unless they're going to warn on profits, says Paul Hill

[alotto] 07/11/2024 08:01

Many fleet operators are now facing significant tax increases unless they take immediate action to revise their vehicle policies. The reforms particularly target vehicles that fall outside the Government's preferred pure electric model for company cars.
Thanks Rachel

[strollingmolby] 02/11/2024 10:43

That's a good point, fenners. In this Spanish Capital Markets Day presentation just over a month ago, you can see the distribution of rental locations on p.18 - not particularly clustered around those areas most affected around Valencia and Seville, so hopefully they have capacity to move vehicles to those areas once the local road network opens up again.



Interesting to note that Northgate/Zigup has 65k vehicles in its fleet in Spain (51% of the Group's total, contributing 35% of Group EBIT.

[fenners66] 02/11/2024 09:52

Looking at the thousands of cars wrecked or damaged in Valencia, the rental car market in Spain is going to be in strong demand.
Whilst Redde may have some damaged vehicles - moving around those they have got , I would expect to get very high rental rates for now.

[alotto] 01/11/2024 16:44

Good point, the insurance should cover cost from damage.

[alotto] 01/11/2024 09:46

More chances to load up

[largeronald] 01/11/2024 08:48

Can see quite a pattern emerging here - the market goes down, the share price here goes down, the market goes up, the share price here goes, er...

[deanowls] 22/10/2024 09:47

Agreed on the risk however it is offset by the fact all their competitors carry the same risk. The larger they are they can reprice consistently to changing factors. Extend the life of the vehicle, currently they are looking to reduce the average age I believe. Also falling interest rates and car companies having more stock should be good for them.

[alotto] 22/10/2024 09:45

I remember people calling the fleet stranded asset as the EVs would take a toll on redde. However we seem far from reachin a point where EVs will be the preferred vehicles and actually the market for used combustion engines should thrive in the short mid term, which is where the residual asset value lies at the moment wlfor zigup. People may prefer to go for a used diesel or petrol before moving to EV.

[fenners66] 22/10/2024 09:35

Hertz ditched what was it, 9000 unwanted EV's in the US?

there may have been a dip in the used car market (at last) after that massive overvaluation in 2020-21-22 but that would have been factored into depreciation already to a great extent.

Does anyone remember someone I think called "Rental" posting on here about 18m ago ?
Arguing that Redde were sat on a £billion of undervaluation of vehicles and would not accept they had that wrong.

So not revaluing upwards leaves them without having to devalue ?

[pugugly] 22/10/2024 09:12

deanowles - Agreed but (imo) significant risk of cars/vans not achieving expected resale value - Maybe I am too cautious but precedents from car rental companies eg: Hertz devalued fleet due to a slump in the used car market,

[deanowls] 22/10/2024 09:00

It’s asset backed Pug, how else would they have so many cars and vans (over 100k), TNAV is a large part of the company here despite being on a low PE rating.

[pugugly] 22/10/2024 08:49

Check out level of debt - Seems a bit high (imo)

[alotto] 22/10/2024 08:47

400 would be too cheap for an acquisition

[largeronald] 22/10/2024 08:37

Feels like this is being walked down to around 310 so an offer can come in to take it private at 400. But wtfdik.

[alotto] 22/10/2024 08:06

I'll add on payday. I wish I had more money