Source - SMW
Commercial vehicle rental group Redde Northgate posted a fall in annual profit, partly owing to one-off merger costs and pressure on revenue from the Covid-19 pandemic.

Pre-tax profit for the year through April slumped 78% to £13.5m, down from £60.4m on-year, and included exceptional cost of £42.3m related to merger expenses and an impairment on software assets.

Revenue rose 4% to £779.3m, but underlying pre-tax profit fell 3.5% to £59.0m

Redde Northgate declared a final dividend of 6.8p per share, down from 12.1p on-year, taking the total dividend for the year to 13.1p, down from 18.3p.

The company said trading was materially impacted in March and April by the pandemic.

In the first four months of the new financial year, however, it said performance indicators across the company had fully recovered or substantially improved.

Redde Northgate said it was comfortable with the consensus of forecasts for the current financial year, absent a deeper or more prolonged impact of Covid-19 than currently expected.

'The main priority following the merger of Northgate and Redde in February 2020, was to integrate the businesses, achieve our targeted synergies and capitalise on the new opportunities available to the combined group,' chief executive Martin Ward said.

'Despite the Covid-19 lockdown happening within weeks following the merger, we were able, in the months during lockdown, to execute the majority of our plans and deliver cost synergies and other savings well ahead of schedule and target.'

'Post the lifting of lockdown restrictions, we have seen a good level of run rate recovery in both Northgate UK&I and Northgate Spain, which has been better than expected, whilst in Redde there has been a more gradual pickup which has been slower than expected.'

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