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Redde Northgate delays decision on dividend as trading hit by coronavirus

Published: 08:58 19 May 2020 BST

Redde PLC -

Redde Northgate PLC (LON:REDD) said underlying revenue and profit margin has been hit by the effects of the coronavirus pandemic in March and April.

The board said they will make a decision on the dividend at the time of its preliminary results in September.

Following the merger of vehicle hire business Northgate with accident management specialist Redde on 21 February, the group said vehicle hire revenues were down 4% in March and April. 

The addition of Redde meant total group revenue was up 5% even though the reduced road use during lockdown has resulted in accident and incident volumes declining steeply.

Underlying group profit margin was lower in the same period, affected by the impact of reductions in trading volumes, flexible support schemes provided to customers and cost actions that have been implemented.

The impact of increased flexibility to customers on rental revenue is roughly £3-4mln per month, while a proportion of the Redde fleet of cars has been deployed to support an NHS and key worker replacement vehicle scheme launched by a long-standing insurer partner.

Some clients have not needed to retain vehicles, with 6% of vehicles returned to branches from lockdown up until the end of April in the UK and Ireland and 7% in Spain.

The group said available headroom has increased to £234mln from £200mln at the end of February.

Even if the lockdown continues for two more months to the end of July, with a slow easing of restrictions over the following three months, management said they do not anticipate having to secure any additional funding requirements for Covid-19 purposes.

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