Redde close to recapturing five year high on positive outlook

Revenues of £379.2m were generated in the year ended 30 June, rising 52.5% in comparison to last year thanks in part to £61.2m of revenue from incident management specialist FMG, which Redde bought last October.

Excluding sales from FMG, like-for-like sales grew 27.9% due to a 14.3% improvement in credit hires and a 71.1% rise in the number of car repairs.

Group adjusted profit before tax increased by 52.4% to £34.6m, with adjusted operating margin was unchanged at 8.8%.

Excluding FMG, adjusted operating margins improved to 9.2% due to an increase in sales changes in the type of business handled, supply chain improvements and costs control.

Adjusted earnings per share increased to 9.64p from 8.40p in 2015.

The FMG acquisition is in line with the company’s strategy to focus on sustainable, profitable and cash generative businesses. The AIM-listed company said FMG had diversified the group's sources of revenue and had the potential to grow its vehicle accident management service more to both business and insurance customers.

Chief executive Martin Ward, said: "We have seen good levels of like-for-like growth and the performance of FMG, acquired in October 2015, has been solid. The new period has started well and together with the pipeline of opportunities the board remains confident on the prospects of the group."

The outlook was positive as volumes are increasing through a combination of new business wins and existing customer growth, while Ward plans further improvements in operational and administrative efficiency.

A final dividend of 5.15p per share is subject to approval at the next board meeting in October.

Shares in Redde were up 3.25% to 206.75p at 1140 BST, not far from the 214p 12-month peak reached last December, which was the highest level since operating as Helphire back in 2010.