First half underlying earnings rise at vehicle leasing and fleet management company
Vehicle leasing and fleet management business, Zenith, has reported growth in underlying earnings, but says challenges remain in the battery electric vehicle (BEV) used car market.
Issuing a trading update for the six months to 30 September 2024, the Leeds-headquartered firm says its adjusted EBITDA, excluding residual value profits, was up 14.1% year-on-year.
Total vehicles under management remained flat at 169,00, while corporate-sponsored schemes grew 5.6%, driven by strong customer retention and new customer wins.
Battery electric vehicles make up 45% (26,719 vehicles) of the company’s corporate and consumer funded fleet and 47% of the 5,843 vehicles in the order bank.
Tim Buchan, chief executive officer, said: “We delivered good progress in the first half of FY25, and the strengthening of our underlying business enabled us to achieve 14.1% growth in adjusted EBITDA, excluding residual value profits.
“This progress included improving contract interest margins, extending the older BEV cohorts, new vehicle deliveries being set with lower residual values to reflect current market conditions, and rolling out our new technology.
“We continue to deliver on our long-term strategy, and while the economic environment remains challenging and weakened used car prices continue to impact our industry, there are tentative signs that used BEV and ICE vehicle pricing has stabilised recently.
“We were encouraged by the Government’s commitment to the electric vehicle transition in the Budget in October, providing long-term clarity on financial and other incentives for BEVs.”
Lower residual value profits continued to impact Zenith’s overall adjusted EBITDA, which declined by 31.7% to £23.7m.
Zenith says positive progress continues on Project Volt, which is the group’s lease extension programme to address the decline in used electric vehicle prices, with nearly 1,500 BEVs formally extended since the inception of the programme.
Following several new customer wins, the business’s total commercial fleet has seen an increase of 10.2% year-on-year to 53,230 vehicles, driven by growth in the managed fleet.
