INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
In a COVID-19 impacted trading period we are pleased to report revenue and operating profit were in line with our expectation for the six months ending 30 September 2020.
This shows the strength of our model with long term contracts helping to deliver results during a challenging period.
On 23 March 2020 the lockdown was imposed in the UK, banning all non-essential travel and closing all but essential businesses, including the closure of car showrooms and auction houses due to the COVID-19 pandemic.
This resulted in a significant reduction in the level of deliveries and maintenance activity taking place on vehicles in our fleet. Income relating to these activities was lower during this period.
Since the lifting of the lockdown we have seen high demand for used vehicles. The re-sale prices of used cars has generated income which has offset the shortfalls during lockdown.
Acquisition of Cartwright Group rental and finance operations
We acquired the fleet services, rental and finance operations of the HGV and trailer specialist Cartwright Group out of administration, safeguarding 259 jobs at the end of this trading period.
Our acquisition creates a HGV and specialist fleet with more than 50,000 vehicles and one of the largest HGV and specialist vehicle fleets, whether lease, rental or fleet management, in the UK.
Martin Jenkins chief executive of the HGV and specialist vehicles division and group strategy director at Zenith, said: “The Cartwright businesses have a very strong reputation in their sector and are a great fit with the customer-first culture at Zenith. Bringing these operations together is an important step in our strategic growth plans and supports our position as the leading provider of fleet services across all asset types in the UK.”
Other operational highlights
The total funded and managed fleet size has increased from 140,000 to 144,000 vehicles in the six months leading to 30 September 2020.
Momentum has been strong in ZenAuto, our consumer leasing business. This is an important part of our growth strategy.
We have seen a fall in the activity of our short-term rental business as customers have cut back on their requirements.
Our customer retention statistics continue to be exceptionally good and we have not seen any material delinquencies or defaults on our leasebook.
Outlook
Over the next six months we expect to continue to trade in line with our plan. There are uncertainties we are operating under including the impact of Brexit and COVID-19 which are difficult to assess the likely impact on availability of vehicles and used car prices.
The move to electric creates exciting opportunities for us. In the short-term the current tax regime makes owning and running an electric vehicle through a corporate salary sacrifice scheme a cost-effective way to transition to electric.
Commenting on the results, Tim Buchan, group chief executive, said:
“It’s been a tough period. I anticipate we will grow the operating profit and the fleet year on year and build out more capabilities with Cartwright, to make the group the most diverse and comprehensive auto mobility provider in the UK.”