Redde Northgate (ZIG) AI Stock Analysis

• Market Cap: £676.91M
• Dividend Yield: 8.66%
• Average Volume (3M): 495.11K
• Price to Earnings (P/E): 7.2
• Beta (1Y): 1.05
• Revenue Growth: 7.08%
• EPS Growth: -28.02%
• Country: UK
• Employees: 7,500
• Sector: Industrials
• Sector Strength: 66
• Industry: Rental & Leasing Services
• EPS (TTM): 0.42
• Shares Outstanding: 225,838,460
• 10 Day Avg. Volume: 546,224
• 30 Day Avg. Volume: 495,106
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.38
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 320.00p
• Price Target Upside: 5.44% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

The overall stock score of 67 reflects strong underlying financial performance with solid revenue growth and efficiency. However, increasing debt and negative free cash flow are concerns. The valuation is attractive with a low P/E ratio and high dividend yield, presenting a strong case for value investors. Technical indicators suggest a potential for stabilization, though caution is warranted due to bearish trends.

Positive Factors

Financial Performance

The results from Redde Northgate Plc are resilient and have de-risked expectations, which management say are unchanged.

Operational Efficiency

Rental margins in both Spain and UK & Ireland have held up well despite the return of vehicle supply.

Negative Factors

Cybersecurity Incident

The Claims & Services division experienced a cyber-security incident impacting EBITA by £4.2m and faced a weaker market in the higher margin Auxillis business.

Earnings Outlook

Consensus underlying PBT is sitting at £161m, down 11% yoy on falling LCV.

Redde Northgate Business Overview & Revenue Model

Company Description

Redde Northgate (ZIG) is a leading integrated mobility solutions provider operating in the UK and Spain. The company specializes in vehicle rental, vehicle fleet management, and accident management services. It serves a diverse range of industries, offering tailored solutions to meet the specific needs of businesses and individual customers.

How the Company Makes Money

Redde Northgate generates revenue through several key streams. The primary source is its vehicle rental services, where the company rents out a diverse fleet of vehicles to businesses and individual customers. This includes both short-term and long-term rentals. Another significant revenue stream is fleet management services, where Redde Northgate provides comprehensive management solutions for corporate vehicle fleets, including maintenance, servicing, and logistics support. Additionally, the company earns from accident management services, offering claim handling, vehicle replacement, and repair services to insurers and fleet operators. Strategic partnerships with insurance companies and businesses expand its service reach and client base, further contributing to its revenue.

Redde Northgate Financial Statement Overview

Summary

Redde Northgate demonstrates solid revenue growth and operational efficiency with stable margins. However, the increasing debt and negative free cash flow due to capital expenditures warrant cautious monitoring.

Income Statement

The company has shown consistent revenue growth over the years, with a notable increase from the previous year. Gross profit margins are stable, indicating effective cost management. However, the net profit margin has slightly decreased, which might be attributed to increased operational expenses. EBIT and EBITDA margins remain healthy, showcasing robust operational efficiency.

Balance Sheet

The balance sheet indicates a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. Return on equity is decent, although there's room for improvement. The equity ratio is relatively stable, reflecting a solid financial foundation. However, the increasing debt levels could pose a risk if not managed carefully.

Cash Flow

Operating cash flow shows a positive trend, indicating strong cash generation capabilities. However, the free cash flow has been negative, impacted by high capital expenditures. The operating cash flow to net income ratio is strong, yet the negative free cash flow suggests potential liquidity challenges if such trends continue.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.83B	1.49B	1.24B	1.11B	779.35M
	Gross Profit
414.33M	415.37M	326.43M	233.03M	154.72M
	EBIT
193.92M	213.01M	144.23M	68.75M	70.69M
	EBITDA
445.06M	396.09M	363.42M	291.38M	240.53M
	Net Income Common Stockholders
125.02M	139.24M	101.55M	65.57M	7.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.80M	14.12M	24.56M	11.17M	67.84M
	Total Assets
2.23B	2.11B	1.85B	1.72B	1.79B
	Total Debt
782.03M	708.56M	607.11M	541.51M	643.71M
	Net Debt
742.23M	694.43M	582.55M	530.34M	575.87M
	Total Liabilities
1.18B	1.11B	900.15M	807.06M	920.52M
	Stockholders Equity
1.04B	994.60M	946.76M	908.13M	871.57M
Cash Flow		Free Cash Flow
-192.90M	-49.97M	-50.77M	-59.84M	-134.23M
	Operating Cash Flow
378.41M	357.34M	295.91M	252.99M	239.54M
	Investing Cash Flow
-285.95M	-288.23M	-215.70M	-94.82M	-205.03M
	Financing Cash Flow
-110.20M	-72.99M	-71.41M	-167.85M	-17.77M

Redde Northgate Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 303.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ZIG, the sentiment is Negative. The current price of 303.5 is below the 20-day moving average (MA) of 306.43, below the 50-day MA of 308.87, and below the 200-day MA of 349.21, indicating a bearish trend. The MACD of -1.72 indicates Positive momentum. The RSI at 44.49 is Neutral, neither overbought nor oversold. The STOCH value of 25.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:ZIG.

Redde Northgate Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRE	81 Outperform	£1.28B	9.96	9.47%	4.85%	7.24%	178.76%
INCH	76 Outperform	£2.72B	6.74	18.69%	5.12%	-19.08%	57.32%
ZIG	67 Neutral	£676.91M	7.25	9.09%	8.66%	7.08%	-28.02%
VTU	67 Neutral	£161.20M	8.75	5.36%	4.77%	7.94%	-25.81%
Sector *	62 Neutral	$8.06B	13.61	3.91%	3.11%	3.80%	-14.06%

Redde Northgate Corporate Events

Zigup Plc Announces Change in Major Holdings

Zigup Plc has announced a change in its major holdings, with Richard Griffiths and controlled holdings now owning a total of 5.13% of the voting rights. This change, resulting from an acquisition of voting rights, highlights an increase from the previous 4.74%, potentially impacting the company’s governance and shareholder dynamics.

ZIGUP PLC Appoints Rachel Coulson as New CFO

ZIGUP PLC announced the appointment of Rachel Coulson as the new Chief Financial Officer, succeeding Philip Vincent, who will leave the company in March 2025. Coulson, who will join by August 2025, brings substantial expertise in digital transformation and business growth, aligning with ZIGUP’s strategic pillars of Enable, Deliver, and Grow. Her appointment is expected to bolster ZIGUP’s position in the evolving mobility industry, driving international growth and enhancing the company’s integrated mobility platform.

ZIGUP plc Announces Share Acquisition by PDMR

ZIGUP plc has announced a transaction involving Mark Tasker-Wood, a person closely associated with the company’s Chief Strategy Officer, Katie Tasker-Wood. The transaction involved the acquisition of 3,199 ordinary shares at £3.10 each, totaling £9,916.90, conducted on the London Stock Exchange on January 21, 2025. This acquisition reflects internal confidence in the company’s future performance and may be seen as a positive signal to stakeholders.

ZIGUP plc Announces Director Share Transactions

ZIGUP plc announced that Harvey Stead, the Chief Operating Officer, exercised his vested options over ordinary shares under the company’s 2019 Executive Performance Share Plan. On January 17, 2025, he sold 8,164 shares at £3.13 each on the London Stock Exchange to cover tax and social security obligations arising from the vesting, while transferring the remaining shares to his nominee account, maintaining beneficial ownership. This transaction reflects the ongoing processes of share management and executive compensation within the company, aligning with market regulations and executive obligations.

ZIGUP Director Acquires Shares Signaling Positive Outlook

ZIGUP plc, in compliance with the Market Abuse Regulation, has announced a transaction involving one of its non-executive directors. John Pattullo, a non-executive director at ZIGUP, has acquired 10,000 ordinary shares of the company at a price of £2.955 each, amounting to a total transaction value of £29,550. This purchase was made on January 14, 2025, through the London Stock Exchange. The acquisition of shares by a director may reflect confidence in the company’s future prospects and can have implications for stakeholder perceptions and market positioning.