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Redde Northgate PLC on Wednesday said it expects a jump in revenue for financial 2022, due to high demand for used vehicles.
The Darlington, England-based commercial vehicle hire firm said performance for the year ended April 30 is expected to be in line with its upgraded expectations.
In March, it guided for an underlying pretax profit around £150 million, ahead of company-compiled consensus from seven analysts at £133.9 million. It also would be more than double the £67.2 million recorded in financial 2021.
Redde Northgate said it expects underlying revenue to increase 24% year-on-year and total revenue to grow 12% compared to £879.7 million in financial 2021, based on its unaudited results.
The company said that the supply of new vehicles has slowed down throughout the year, resulting in increased demand for used vehicle sales. This also positively impacted their residual values, it said.
Redde Northgate said that its hire vehicle volumes are at around 90% of pre-Covid levels.
However, it noted longer hire lengths, due to challenges in supply chains for parts in the wider vehicle service, maintenance and repair process.
As a result of the robust performance in all areas of its business, Redde Northgate expects to see another year of ‘progress’ in financial 2023.
‘With significant further opportunity for growth, and building on the strong performance and momentum in the business, we look to the future with confidence,’ Chief Executive Martin Ward said.
Shares in Redde Northgate were up 3.8% at 382.00 pence on Wednesday morning in London.
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