FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2021
Trading performance
In the year ended 31 March 2021, excluding the results of our emerging ZenAuto business, the Group delivered EBITDA of £61.5m, up £3.2m, or 5.4% on the previous year.
After incorporating ZenAuto, our statutory EBITDA was £58.1m (year ended 31 March 2020: £56.1m), an increase of £2.0m or 3.4%.
The key drivers of growth in the year were a result of our resilient business model: high levels of recurring income, diversified and robust income streams and counter-cyclical elements of our earnings. This included increases in residual value profits (after the tightening of the used vehicle market, beginning during the first lockdown) and the flex of the fleet within our Corporate division into extended terms, as customers chose to prolong their lease agreements rather than renew.
An additional positive factor was the contribution of the former Cartwright businesses that now form our Commercial Vehicles Fleet Services and Commercial Vehicles Rentals businesses. Zenith incorporated these businesses on the acquisition of the fleet services and rental operations of the Cartwright Group in September 2020. We were particularly pleased by the performance of these businesses during the period after acquisition, and to welcome approximately 280 new colleagues to the group as a result of the acquisition.
ZenAuto, our consumer brand, has continued to increase its fleet numbers and develop its business resources strongly during the year. With continued investment in our people, IT and marketing, ZenAuto contributed a loss of £3.4m to EBITDA (£2.2m loss in previous year), which was in line with our expectations as we invest to increase the scale and capacity of the business.
Operational highlights
2020 was unlike any other year in living memory. The global pandemic brought with it many unprecedented challenges, and we continue to experience the impact of COVID-19 as we enter the second half of 2021. Against this backdrop, we are proud of how the Zenith team navigated the hurdles presented by the pandemic and how they continued to deliver for our customers throughout and, in doing so, delivered such a strong performance for the company.
Highlights included:
- Our strong track record of investment in technology and people ensured that, by March 2020, we were able to adapt to homeworking very quickly, two full weeks before the Government instigated its first national lockdown
- We were able to continue to offer the very high levels of customer service and support that we are known for. That we were able to do so at a time when our customers themselves were going through such upheaval and uncertainty is testament to the dedication, patience and resilience of the Zenith team
- We grew our funded and managed fleet to approximately 150,000 vehicles, across all asset types, including cars, vans, trucks and trailers
- We continued to invest and innovate, with ZenAuto being a particular area of focus for us as our digital, direct-to-consumer offer goes from strength to strength
- We invested in our people: with 11 apprentices joining us during the year. We also signed up to the Kickstart scheme to offer opportunities to 16-24 year olds from our local community to build their careers in the automotive industry
- In September 2020 we completed the acquisition of the fleet services, rental and finance operations of the Cartwright Group from administrators. The deal secured Zenith’s position as the UK’s largest HGV and specialist fleet operator, with 50,000 vehicles and one of the largest trailer rental fleets in the country
- We made substantial progress during the year on our commitment to help the UK speed up its transition towards electric transport. Zenith’s own company car fleet will be EV-only by 2025 and we have targeted 2030 as the year when all of our funded car fleet will be zero emission
- Within the company itself, Zenith’s greenhouse emissions fell by 48% during the year to 305 tonnes of CO2e and, through carbon offsetting, we have also been recognised by Carbon Footprint as being a carbon neutral business this year too.
Outlook
The past year has possibly been the most challenging environment since the creation of Zenith, not just for trading conditions, but for the impact on our employees, customers and partners. However, we are confident that our business model, our range of services and demand for vehicle mobility in general will be central to everybody’s lives in future as restrictions imposed by the UK Government are lifted and the UK economy continues to recover from the effects of COVID-19 and the resulting lockdowns.
Our view is that the fundamental growth drivers of the market remain highly positive. We are increasingly able to differentiate our service proposition, helping us secure prominent new business and the Directors are confident that this will continue. We are stable and well organised to capture market share across both corporate and consumer markets. We have some of the best-connected technology available and a highly experienced, agile, engaged team that is committed to continuing Zenith’s future success.
Our annual report and accounts for the year ended 31 March 2021 can be found here.