11 Mar 2019
Contract lost, 8-9% earnings impact in outer years
Redde has lost a large insurer contract. This has no impact on FY19e earnings, but prompts an 8-9% reduction in outer years. Working capital will be released as a result. The reduction in earnings increases the payout ratio but our dividend forecasts remain covered and we leave them unchanged. The dividend is flat yoy in FY19e, before resuming growth. The valuation is at a new low since optimisation began in 2012 – with an 8.0x FY20e PER with a 1.1x covered 11.7% dividend yield.
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Contract lost, 8-9% earnings impact in outer years
Redde Northgate PLC (21W:FRA) | 0 0 0.0% | Mkt Cap: 498.3m
- Published:
11 Mar 2019 -
Author:
Andrew Watson -
Pages:
3
Redde has lost a large insurer contract. This has no impact on FY19e earnings, but prompts an 8-9% reduction in outer years. Working capital will be released as a result. The reduction in earnings increases the payout ratio but our dividend forecasts remain covered and we leave them unchanged. The dividend is flat yoy in FY19e, before resuming growth. The valuation is at a new low since optimisation began in 2012 – with an 8.0x FY20e PER with a 1.1x covered 11.7% dividend yield.