Zenith FY24 Annual Results

Zenith FY24 Annual Results

Funded fleet continues to grow, driven by corporate schemes, but profitability impacted by weakness in used car prices, in particular BEVs.

Zenith, the UK’s largest independent truck-to-car vehicle leasing and fleet management company, today published its annual financial results for the year ended 31 March 2024.

Fleet highlights:

• The total fleet was up 1% YoY to 170k vehicles.
• The overall funded fleet grew 2% YoY to 77k vehicles.
• The funded fleet in our Corporate division grew 8%, driven by growth in our corporate schemes, particularly salary sacrifice.
• As of 31 March 2024, the funded fleet across both our Corporate and Consumer divisions (60k vehicles) comprised 41%¹ (25k) battery electric vehicles (BEV) and 59% (35k) ICE² vehicles.
• The Corporate and Consumer order bank continued to normalise, reaching 6,921³ vehicles at the end of March 2024 and comprised of 44% (3k) BEV and 56% (4k) ICE vehicles. Order lead times remained at 124⁴ days.
• Deliveries were down 1% YoY, as reduced demand in the ZenAuto Consumer division offset higher volumes in the Corporate division.
• Termination volumes were up 30% YoY.
• Our BEV lease extension initiative has been positively received and FY25 vehicle cohorts continues to gather pace.

Financial highlights:

• Turnover: £788.4m up 16.1% YoY (FY23: £679.0m)⁵.
• Adjusted gross profit: £134.4m⁶ down 8.5% YoY (FY23: £147.0m).
• Average termination profit per vehicle down 40%⁷ YoY on current weakness in used vehicle prices, both for BEV and ICE vehicles.
• Adjusted operating expenses: £72.4m up 7.1% YoY (FY23: £67.6m) driven primarily by inflation and investment in our people.
• Adjusted EBITDA: £62.1m⁶ down 21.8% YoY (FY23: £79.4m).
• Impairment of £51.4m, reflecting the recent sustained fall in BEV used vehicle prices, and including a £16.2m reversal of the FY23 RV reassessment⁷.
• Liquidity of £119.0m at 31 March 2024, comprising of freely available cash of £54.0m, flat YoY, and a revolving credit facility of £65.0m that remained undrawn throughout the year.
• Upsized our EFP¹⁰ securitisation facility in July 2024 by up to £300m¹¹, including £150m commitment, with existing group of lenders.

Business highlights:

• The Corporate division grew the total fleet year-on-year with a number of new customers, including a full vehicle leasing solution for Briggs Equipment UK’s fleet, supporting both its light commercial vehicles (LCV) and passenger vehicles through company car and salary sacrifice schemes.
• Throughout the year, the Consumer division, responded to constrained retail demand by expanding its routes to market with a three-year extension of our outsourced White Label Solution with Santander and two new consumer origination channels – a Personal Contract Hire (PCH) partnership with a high street bank and a new Business Contract Hire offering for small to medium companies.
• The Commercial division grew its managed fleet by 19.4% YoY following several new contract wins and increased its Mobile Service Unit fleet to provide more flexible support for customers.
• Within our transformation programme, we have successfully rolled out our asset management platform to all our Commercial customers and are now completing the same for our Corporate salary sacrifice customers.