Specialty finance (vehicles) company REDD (Redde) issued a pre-close trading statement, the gist of which is: results likely to exceed upper end of market expectations and net cash is up.
The company also announced the appointment of N+1 Singer as joint stockbroker. REDD (formerly HHR) had a £60m placing Dec 2013 “to fund strategic growth”. In Feb 2014 it announced an acquisition of New Law for £24.5m in cash and £10.5m in shares. They still have a lot of cash left, so REDD could be looking into another acquisition.
New Law had profit before tax of £7m, and net debt of £8.2m. So the total cost is about £43.2m (24.5+10.5+8.2) – which seems OK as an acquisition.
Looking on Stockopedia, REDD has a PE of 10.0, a PEG of 0.69, an EV/EBITDA of 3.79, a stock rank of 93, and is in the Screen of Screens. Is this going to turn out like shooting fish in a barrel?