Diversification continued to be at the forefront of Redde' s (REDD) strategy in the year to June, as it aims to reduce its reliance on traditional sources of insurance market revenue. The acquisition of claims management specialist FMG not only added £61m in revenue, but also expanded the accident services provider's range of services. This included new contracts managing fault repairs on insurer's behalf.
With an increasing number of cars on the road it is no wonder Redde's core hire and repair business continued to grow at pace. Excluding FMG, repairs were up almost three-quarters, while higher-margin credit hires grew by 14 per cent. Management has increased focus on credit hires, where Redde provides the victim of a road accident with a replacement vehicle and repairs, recouping the bill from the guilty party's insurer. This helped push up overall like-for-like sales by more than a quarter.
Personal injury legal services provider NewLaw continued to pursue partnerships with insurers and trade associations via Alternative Business Structures, which allow non-lawyers to invest in legal firms. The most recent partnership with the Royal College of Nursing commenced in April.
Analysts at house broker N+1 Singer expect adjusted pre-tax profits of £37.2m for the 12 months ending June 2017, giving EPS of 9.9p (from £34.7m and 9.3p in 2016).
REDDE (REDD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 205.25p | MARKET VALUE: | £602m | |
| TOUCH: | 203-205.25p | 12-MONTH HIGH: | 215p | LOW: 137p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 55p* | NET DEBT: | 3% | |
| Year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 224 | -6.3 | -1.8 | nil |
| 2013 | 205 | 32.4 | 55.6 | 1.65 |
| 2014 | 197 | 10.5 | 6.8 | 6.85 |
| 2015 | 249 | 24.3 | 9.0 | 8.25 |
| 2016 | 379 | 31.3 | 8.7 | 9.65 |
| % change | +52 | +29 | -3 | +17 |
Ex-div: 6 Oct Payment: 3 Nov *Includes intangible assets of £107m, or 37p a share | ||||
