Zenith, the UK’s largest independent truck-to-car vehicle leasing and fleet management company, today published its financial results for the second quarter and first half of the 2024 financial year.

Financial performance:

• Total fleet up 0.9% YoY to 169,644 units, up 1.0% QoQ.
• Funded fleet up 8.1% YoY to 77,814 units, up 0.7% QoQ.
• Deliveries up 30% and termination volumes up 36%[1] in H1 FY24 YoY, as the fleet returns to a normal replacement cycle and the share of battery electric vehicles (BEVs) increases.
• Average termination profit per vehicle down 24.7% YTD YoY.
• Turnover: £386.0m up 21.1%YoY (H1 FY23: £318.7m).
• Gross profit: £70.6m[2] down 1.3% YoY (H1 FY23: £71.5m).
• Operating expenses: £36.6m up 12.7% YoY (H1 FY23: £32.5m) driven primarily by inflation.
• EBITDA: £34.0m[2] down 13.0% YoY (H1 FY23: £39.0m).
• LTM[3] EBITDA[2] £74.3m (LTM to 30 September 2022: £74.5m).
• Cash position at 30 September 2023: £63.5m[4], with an available, undrawn revolving credit facility of £65.0m, giving liquidity of £128.5m.
• £1.5bn of asset financing facilities, with total headroom of £284m.

Business performance:

• New car registrations continued to grow, rising 20% in the year to September 2023.
• Maintained a healthy order bank at 9,130[1] vehicles, down from 12,015 at the end of March 2023 as pressures continue to ease in the vehicle supply chain.
• Order lead times declined by 29% YoY to 147 days[5].
• Battery electric vehicle (BEV) fleet continued to grow, comprising 37% of the funded fleet and 41% of the order bank at 30 September 2023[4].
• The Corporate division achieved a number of new customer wins, reflecting the strong demand for its company-sponsored schemes and as corporates take advantage of the BIK[6] tax environment as they transition to BEVs on their journeys to net zero.
• The Consumer division remained profitable and is adapting to weaker direct-to-consumer demand in the challenging macro environment by building on its partnerships. Developments include extending the contract with our largest White Label Solutions partner, Santander Consumer Finance, until the end of 2026, and launching a new BEV PCH[7] partner scheme.
• The Commercial division continues to grow its fleet management portfolio through new customer wins[8] following a number of significant tender processes. Trailer utilisation has softened reflecting weaker consumer demand affecting the logistics and parcel volumes.

Leadership changes:

• Tim Buchan, as he approaches 60, has announced his intention to retire as Zenith’s CEO at the end of 2024, and transition to a non-executive director on the Group Holding Board alongside Bridgepoint. Tim will continue to lead as CEO until a successor is appointed.
• To enable the business to maximise its scale and joint operations, the Corporate and Consumer divisions will be brought together and led by Ian Hughes, CEO of the Corporate division. We will continue to report the financial performance of these units separately.
• Andrew Kirby, currently acting CEO of the Consumer Division and CEO of our rental business has decided to leave the business next year to take up a new leadership role outside of the automotive industry.

Tim Buchan, Chief Executive Officer, Zenith, said:

“I am very proud of how Zenith is performing against this tough economic backdrop. Our diversified business with operations across commercial, corporate and consumer segments has meant that, during our first half we have been able to deliver more fleet growth, strengthen our cash position and win new customers. Our fleet today stands at more than 170,000 vehicles. It is also reassuring to see the SMMT[9] forecasting an increasing growth rate in registrations for the next two years.

“We continue to adapt and invest in our business for the future as we navigate increasingly difficult macro issues, including a challenging consumer environment resulting in weaker used car prices and reduced utilisation of our trailer rental fleet.

“We remain committed to our mission of eliminating tailpipe emissions by supporting our customers’ transition to electric and other zero emission vehicles. We are continuing to invest in our single asset management platform, continuing our focus on our ESG[10] initiatives and consistently striving to improve customer outcomes.

“I’d like to take this opportunity to thank all our employees for their hard work, dedication and commitment and our customers and partners for their continued support and confidence in Zenith.”