Strong Q3 performance for Zenith as company repays government's COVID furlough funding

21 / 03 / 22  |  In the Press

Zenith has delivered strong growth and profitability as it publishes its inaugural quarterly results since the successful issuance of its £475m green bond in January 2022.

During the third quarter (October 1st – December 31st 2021) Zenith’s total fleet size grew by 6,600 to 158,000. Turnover for the first nine months of the financial year was up £65.4m to £402.6m. EBITDA grew by £1.4m in Q3 to £17.9m, bringing total EBITDA for the first nine months to £57.2m, up £14.5m on the prior period.

While constraints to the supply of new vehicles continued, principally due to the ongoing shortage of semi conductors, Zenith has witnessed very strong demand with three consecutive quarters of record order take. Zenith’s diverse business mix enabled it to continue to trade successfully. Zenith’s order book for new cars in its Corporate division grew substantially, from 8,600 at the end of September, to 10,900 at December 31st 2021, then again to 12,100 at February 28th, 2022, more than double the figure at the same point in the prior year. Zenith’s consumer retail business, ZenAuto, has also grown its order book to more than 1,000 vehicles for the first time.

Over half of Zenith’s corporate order book is now for battery electric vehicles (BEVs) demonstrating continued strong demand from customers.

Zenith has also decided to repay to the UK Government the £0.9m it had received during the COVID pandemic to cover employee furlough payments. The money will be repaid over the next few weeks.

Commenting on the results, Tim Buchan, Chief Executive Officer, said:

“Our Q3 results demonstrate the ongoing strength and resilience of the Zenith Group. While the global slowdown in new car production has continued, the nature of our business mix means that we are able to offset this through generating value from our existing fleet of vehicles.

“I am encouraged to see that the high levels of demand for electric vehicles has shown no signs of fading and that, across our entire order book, more than half of orders are for BEVs.

“With Zenith’s performance having remained strong throughout the pandemic, and with the Group in such good financial condition, we were pleased to be able to return all of the furlough funding that we had received from the Government. We are grateful for this support during such a testing time for the country, and we feel that repaying the money is the right thing for Zenith to do as a responsible business.”

Divisional description:

Corporate

Zenith’s Corporate division offers fully outsourced company car and van schemes, vehicle funding solutions, salary sacrifice solutions and short-term rental vehicles, as well as a comprehensive suite of ancillary services and products. We focus on customers with larger fleets (generally more than 100 vehicles) for whom we are often the sole supplier and for whom service quality is an important differentiator.

Commercial

Zenith’s Commercial division offers fleet management services and funding solutions for light commercial vehicles, HGVs and specialist vehicles. We are the UK’s largest operator in large commercial vehicle management and trailer rental.

Consumer

Zenith’s Consumer division is comprised of two main businesses: ZenAuto and business process outsourcing. ZenAuto is the UK’s leading fully end-to-end, online new and used car leasing platform for consumers. Our business process outsourcing operation offers back-office services for the finance arms of leading automotive manufacturing and consumer finance businesses.