Shares of vehicle hire group Redde (LSE: REDD) were up nearly 4% at 62p in early trade, after revealing that full-year results are likely to exceed the upper end of market expectations.
The AIM-listed Redde said that debtor days (the average number of days it takes to receive payment from its customers) within the historical Helphire business were at a new record low, having been reduced to 122 days at 31 May 2014.
Including the NewLaw group of companies acquired for £40m in March, combined statutory debtor days fell to 112 days (based on the turnover of the combined group in the past year).
Further reductions are expected, increasing the likelihood that the group stays cash-positive, after the effects of protocol agreements with insurers begin to extend further through the business.
Speaking at the time of the merger, Redde’s chief executive Martin Ward, commented:
“Our strategy is to grow and develop our position in the insurance marketplace and to seek out opportunities to broaden our service offering. The acquisition of New Law in February this year is a major step to supporting our aims.”
New cash balances were approximately £37.9m compared to £1.1m at the half-year point in 2013.
