The share price ofRedde (LSE: REDD) is currently up 7.2%, following publication of a trading update this morning in which the company says thatits trading profit for the six months to theend of 2014will be materially ahead of its previous expectations, and significantly ahead of the same period last year.
Redde which providesbespoke claims management, legal and specialist accident management services to the motor insurance sector says that thestrong start to the current financial year that it reported inSeptember and October has continuedinto December, allowing it to revise its expectations significantly upwards.
The company says that cash generation continues to be strong, with total cash balances standing at60.9m as of 30November 2014, compared with 58.3m at 30 June 2014, which,adjusting for the 9.8m final dividendpayment, represents anincrease of 21.3% (12.4m) over the five months.
Based on the groups performance to date, Reddes board says that it anticipates declaring an interim dividend of at least 3.5p per share, which would be an increase of 4.5% over last years total interims of 3.35p per share (which was paid in three installments).
Commenting on update, CEO Martin Ward, said:
The benefits of our strategy for growth, sustainable profits and cash arebeing demonstrated in our strong trading results. This goes to support asignificant dividend return to our shareholders. We see further opportunity togrow the business both organically and through M&A investment. Based on currenttrading we remain confident about our outlook.
More recent investors will be very happywith the 48% rise in Reddes sharesince this time last year by comparison the FTSE All-Share index has fallen almost 4%.
However, longer-term shareholders, from back in the companys previous existence as Helphire, arehurting badlyfrom a share price collapse of 84% over the past five years, during which time the FTSE All-Share has gained 25%.
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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
