Redde Northgate PLC on Tuesday said it expects to beat consensus expectations for annual profit, due to a stronger-than-expected performance driven by rental demand and robust used vehicle market values.

Shares in the Darlington, England-based commercial vehicle hire firm were 5.6% higher at 399.83 pence on Tuesday in London, the best performer in the FTSE 250.

For the year ending April 30, underlying pretax profit is expected to be 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 has been trading ahead of expectations, with the rental margin to the end of February being 15.8% in the UK & Ireland and 17.5% in Spain.

Also, since December 1, the group has de-fleeted a lower number of vehicles due to rental demand and new vehicle supply constraints, while used vehicle market values have remained strong.

Redde’s volumes are now running at around 90% of pre-virus levels, after recovery was hindered in December and January by the Omicron variant and work-from-home restrictions.

Looking ahead, due to having substantial headroom under its facilities, Redde Northgate will launch a share buyback programme for up to £30 million, starting with immediate effect and is set to be completed by September 15.

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