The markets where we operate are undergoing significant structural changes, not least the continuing shift from vehicle ownership to rental. We are well placed to capitalise on this and other changes, ensuring we tailor our comprehensive product offering to each particular market’s needs.
The markets where we operate are undergoing significant structural changes, not least the continuing shift from vehicle ownership to rental. We are well placed to capitalise on this and other changes.
LCVs are hired principally by enterprises for commercial transport roles on a variety of terms including flexible rental or minimum term rentals, primarily as a means of securing transportation without incurring the capital cost of vehicle ownership or longer term lease obligations.
Many participants in the LCV hire market also engage in substantial sales in the secondary market of their fleets as a means of releasing capital for fleet renewal and as a revenue stream in its own right, as does Northgate through its Van Monster brand.
Northgate is evolving its fleet solutions to offer customers a comprehensive range of additional services alongside their vehicle hire, including fleet management and telematics.
Fleet telematics and fleet management relates to the monitoring and tracking of a fleet of commercial vehicles, typically to optimise their use.
Northgate is progressively aligning its fleet policy with changing market demands, to be at the forefront of electric and zero emission penetration into the market.
Northgate continues to work with OEMs to ensure it has as full an allocation as possible of these vehicle types for customers.
In the UK, in 2017 accident management companies handled an estimated Q. I billion in claims with approximately 40% of those relating to commercial vehicles, amounting to a total claims value of £830 million.
Redde's fleet and incident management business focuses on growing its customer base, including the on-boarding of insurer and large commercial brokers for the provision of third party claims intervention services, reducing the cost of claims for its customers.
Redde assists its customers with legal services covering personal injury services as well as employers' liability, wills and probate, family law, clinical negligence and public liability legal advice.
The UK Government has announced reforms of RTA soft tissue injury compensation levels that are scheduled to come into effect in April 2020. In response, Redde has invested in IT systems to provide a customer portal that will integrate with the proposed Ministry of Justice portals and provide efficiencies to deal with low-value claims after the reforms take effect.
While non-RTA cases, including Redde's employers' liability and medical negligence practice, take longer to settle than RTA claims and require greater cash investment as they progress, they are not affected by the RTA soft tissue injury compensation regulations
Credit hire providers supply replacement vehicle hire and repair services primarily to non-fault customers who have been involved in traffic accidents, normally at no direct cost to the individual, by seeking compensation from the at-fault party's insurers. The size of the credit hire market is estimated to be approximately £680 million, of which approximately 22% (approximately £150 million) is serving end business customers.
The UK crash repair market is a key indicator for the overall accident management market, with a report prepared by Trend Tracker in January 2019 suggesting expected growth of over 14% over the next five years to 2023 following growth of 28.5% over the five years to December 2018.
All of our markets have been affected by the COVID-19 pandemic and the unprecedented actions taken by Governments and businesses to contain the virus. While this adversely affected trading in March and April 2020 and into FY2021, in our view will not change the long term attractiveness of our markets.
Throughout the pandemic we have continued to deliver for customers that needed us, particularly those providing essential services. The Northgate rental fleet was directly involved in delivering essential services during the pandemic, as well as indirectly supporting the wider supply chain. We worked in key sectors including pharmaceuticals, human healthcare such as blood delivery, housing and local councils, and large scale retail distribution. The Redde businesses also continued to support key parts of the UK economy.
The markets our businesses operate in are experiencing a number of trending dynamics, which include:
– Shifts by businesses and customers from owning to renting vehicles;
– Convergence of mobility solutions;
– Increasing use of services and support to differentiate customer propositions relative to competitors;
– Interacting and providing customers with a broader end-to-end experience.
We believe we are well placed to benefit from these trends, which will help inform the strategic review of operations.