From its indebted, tumultuous former life as Helphire, accident services provider Redde (REDD) has come a long way. Three years ago a £60m fundraising round gave the company money for strategic investments, including developing a personal injury legal services business. And with more cars than ever on the road, the core business is flourishing: turnover was boosted by a 6 per cent increase in hire cases and vehicle repairs doubled compared with the same period last year.
There has been an increased focus on higher-margin credit hires, where Redde provides the victim of a road accident with a replacement vehicle and repairs, recouping the money from the guilty party's insurer. These were up 9 per cent, compared with a 17 per cent reduction in the lower-margin direct hires. This also helped to increase operating margins in the accident management business from 7.1 per cent to 9.7 per cent.
The group benefited from £15m of revenue from claims management specialist FMG, which was acquired in October. Redde's legal services business NewLaw also agreed new partnerships in the period.
Analysts at N+1 Singer have upgraded their forecasts for full-year revenue and pre-tax profits. But due to the addition of non-cash deferred tax they continue to expect EPS of 9p for the year to June 2016, up from 7.9p in FY2015.
| REDDE (RDD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 192p | MARKET VALUE: | £563m | |
| TOUCH: | 192.0p-192.5p | 12-MONTH HIGH / LOW: | 215p | 92p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 55p* | NET DEBT: | 5.6% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 122 | 11.0 | 4.14 | 4.0 |
| 2015 | 165 | 16.0 | 4.49 | 4.5 |
| % change | +35 | +45 | +8 | +13 |
Ex-div: 3 Mar Payment: 24 Mar *Includes intangible assets of £109m, or 37p a share | ||||
