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.
![Tim Buchan, Zenith chief executive officer](https://uploadsstorage.blob.core.windows.net/prod/2024/07/report_tim_380x410.jpg)
"This has been an exceptionally challenging year for the automotive sector, with much uncertainty about the ban on ICE vehicles, including the five-year delay to the 2030 deadline.
I’m proud of the way we are responding to the challenges, finding ways to mitigate the risks and impact on our business. Extending leases within our existing Battery Electric Vehicle (BEV) fleet, launching new products to new markets and ensuring our fleet has a healthy balance of BEVs and ICE vehicles, all help to meet the needs of our customers while driving the success of our own business.
I’d like to take this opportunity to thank the Zenith team for another successful year. They drive this business forward, ensuring we add value to everything we do. Thank you also to our customers and partners for their ongoing support and confidence in Zenith.”
Tim Buchan, Zenith chief executive officer
[1] Excluding managed fleet and Commercial division vehicles
[2] Internal combustion engine. Includes hybrids
[3] Corporate and Consumer funded fleet only
[4] December 2023 average car order lead time
[5] Turnover for the year ended 31 March 2023 has been restated by £9.1m. Please see Zenith Annual Report 2024 for further details
[6] Excluding the adjustment relating to the reassessment of residual values on the funded fleet and exceptional items
[7] Corporate and Consumer funded fleet only
[8] The impairment of £51.4m comprises £16.2m from the reversal of the reassessment of RVs booked in FY23, and £35.1m of additional impairment following the sustained fall in used vehicle prices.
[9] Excluding cash held within Special Purpose Vehicles of £31.0m
[10] Exhibition Finance Plc, which funds the lease receivables and residual value
[11] £300m comprises £150m Committed and £150m Uncommitted amounts, with £50m reduction in unutilised portion of FFL (Forge Funding Ltd) facility. The conversion of the Uncommitted portion to Committed is subject to both the lenders’ and Zenith’s agreement.