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Redde Northgate PLC on Wednesday said that it was confident of delivering full-year earnings ahead of consensus, after seeing revenue jump in the first half. For the six months ended October 31, the Darlington, England-based commercial vehicle hire firm reported pretax profit of £74.4 million, down 4.4% from £101.9 million a year prior. Revenue, meanwhile, rose 31% to £911.3 million from £696.3 million the previous year. Redde Northgate attributed this to strong claims and services revenue growth, supported by increased volumes from recent contracts and higher fleet disposal activity. The discrepancy came in part due to an increase in cost of sales, up to £685.3 million from £478.8 million year-on-year, and in administrative expenses, which rose to £113.5 million from £107.5 million. Redde Northgate also noted the impact of higher interest costs on pretax profit, which partially offset a ‘strong operational performance’ and disposal profits. Looking ahead, Redde now expects earnings for the full-year to be ‘modestly ahead’ of market consensus. ‘This has been a strong trading period for the business and continues the progress we have seen since the launch of our integrated services platform,’ said Chief Executive Officer Martin Ward. ‘Growth from new contract wins continues to support revenue and earnings momentum in the near term. With a strong prospect pipeline, and a large proportion of our revenues underpinned by multi-year service contracts, we see the quality of earnings being a standout feature of the business.’ The firm declared a dividend of 8.3 pence per share, up 11% from 7.5p a year prior. Redde Northgate shares were trading 6.0% higher at 381.00 pence each in London on Wednesday morning. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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