Source: Sharecast
Berenberg said Zigup, formerly known as Redde Northgate, has built a fully integrated mobility platform, providing a comprehensive solution across the full vehicle lifecycle for customers in the UK & Ireland and Spain.
The German bank stated Zigup was at "a major cash-generation inflection point", with the firm targeting £200m by FY28. It noted that financial momentum was driven by its "nationwide, unique, integrated platform", which provides "a key strategic advantage" for capturing significant market share in a fragmented industry.
"Zigup is approaching an inflection point in cash generation, driven by EBITDA growth, normalising fleet replacement capex, and the exit from a heavy investment cycle, all converging to drive a step-change in potential FCF," said Berenberg.
"Combined with £20m of restructuring savings, the business is targeting cash generation of £200m by FY28. This opens up compelling capital allocation opportunities for further investment in growth or additional shareholder returns through buybacks, in addition to a favourable dividend yield (c6.7% in FY26E)."
Berenberg added that Zigup currently trades on a FY26 price-to-earnings ratio of 7.6x, or 9.5x enterprise value to EBIT. Its 550p price target also implies roughly 35% upside to its current share price.
Reporting by Iain Gilbert at Sharecast.com