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Redde Plc (REDD)

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Friday 08 March, 2019

Redde Plc

Contract Update

News Release

Redde plc

Issue Date: 08 March 2019

Contract Update

The Board of Redde (“Redde” or the “Group”) announces that, following an extensive period of contract tendering, the Company was informed today that it has not been successful in securing the renewal of a hire and repair contract with a large insurer. The existing contract runs through into the next financial year and there will be no impact on adjusted operating profits in the current financial year ending 30 June 2019.

Taking into account the loss of this contract, other contract wins and the effect of mitigating actions, the Board expects that the impact on existing consensus market expectations for the financial year ending 30 June 2020 would be a net reduction in sales of approximately £111.9m (representing 18.2 per cent. of consensus expectations) and a reduction in adjusted operating profits of approximately £4.7m (representing 8.7 per cent. of consensus expectations). The effect on working capital in the financial year ending 30 June 2020 is anticipated to be positive.

After 10 years of partnership, the Board is obviously disappointed not to have secured the renewal of this contract. However, as announced in the interim results on 27 February 2019, the pipeline of new business is nevertheless encouraging with a number of live prospects.

Commenting on the news Martin Ward, Chief Executive Officer, said:

“We are obviously disappointed not to have retained this contract. We will however concentrate our efforts on continuing to support our existing partners as well as winning new business to mitigate the effect on earnings in the next financial year.”

The information contained within the announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

For further information, contact:

   

Redde plc Tel: 01225 321134
Martin Ward, Chief Executive Officer
Stephen Oakley, Chief Financial Officer
Cenkos Securities plc (Nominated Adviser and Joint Broker) Tel: 020 7397 8900
Mark Connelly
Giles Balleny
Harry Hargreaves 
N+1 Singer Capital Markets Limited (Joint Broker) Tel: 0207 496 3000
Mark Taylor
Square1 Consulting Tel: 020 7929 5599
David Bick

Notes for editors

About Redde plc:

Founded in 1992 and working predominantly with insurance companies, insurance brokers and prestige motor dealerships, the Group provides a range of accident management and legal services. The Group also deals directly with large national fleets providing incident management and mobility continuity and the Group's activities also encompass a range of legal services designed to assist claimant parties in partnership with leading insurance companies, brokers and other bodies.

The Group is one of the market leaders in its fields of business; it delivers accident management solutions to motorists ensuring that they remain mobile until their own vehicles are repaired or until they are put in a position to obtain a replacement and it provides legal services ensuring that they are properly compensated for their injuries and losses. Legal services also include wills and probate, family law and employment law advice.

The name Redde is associated, in Latin, with the concept of restoration.


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