Zenith, the UK’s largest independent truck-to-car vehicle leasing and fleet management company, has released its financial results for the year ending 31 March 2024, highlighting steady fleet growth and significant strategic developments.
Financial performance
Zenith reported a turnover of £788.4 million, marking a 16.1% increase from the previous year’s £679.0 million. However, the adjusted gross profit fell by 8.5% YoY to £134.4 million, down from £147.0 million. This decline was attributed to a 40% drop in average termination profit per vehicle, reflecting the current weakness in used vehicle prices for both BEVs and ICE vehicles.
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Adjusted operating expenses increased by 7.1% YoY to £72.4 million, primarily due to inflation and investments in personnel. Consequently, adjusted EBITDA decreased by 21.8% YoY to £62.1 million. The company also reported an impairment of £51.4 million, which included a £16.2 million reversal of the FY23 residual value reassessment, due to the sustained decline in BEV used vehicle prices.
Despite these challenges, Zenith maintained a strong liquidity position with £119.0 million as of 31 March 2024, consisting of £54.0 million in freely available cash and an undrawn £65.0 million revolving credit facility. Additionally, in July 2024, Zenith upsized its EFP securitisation facility by up to £300 million, securing a £150 million commitment from existing lenders.
Fleet performance
Zenith’s total fleet increased by 1% year-on-year (YoY), reaching 170,000 vehicles. The overall funded fleet grew by 2% YoY to 77,000 vehicles, with the Corporate division’s funded fleet experiencing an 8% rise, driven primarily by corporate schemes such as salary sacrifice programmes. As of the end of March 2024, the funded fleet comprised 41% battery electric vehicles (BEVs) and 59% internal combustion engine (ICE) vehicles.
The Corporate and Consumer order bank normalised, standing at 6,921 vehicles, with a composition of 44% BEVs and 56% ICE vehicles. Order lead times remained steady at 124 days. Deliveries saw a slight decline of 1% YoY, as reduced demand in the ZenAuto Consumer division counterbalanced higher volumes in the Corporate division. Termination volumes, however, surged by 30% YoY. The company’s BEV lease extension initiative received positive feedback, and vehicle cohorts for FY25 continue to show growth.
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By GlobalDataBusiness highlights
Zenith’s Corporate division expanded its fleet with several new customers, including a full vehicle leasing solution for Briggs Equipment UK’s fleet, supporting both light commercial vehicles (LCVs) and passenger vehicles through company car and salary sacrifice schemes. The Consumer division responded to constrained retail demand by extending its outsourced White Label Solution with Santander for three years and launching 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-sized companies.
The Commercial division achieved a 19.4% YoY growth in its managed fleet following several new contract wins and expanded its Mobile Service Unit fleet to provide more flexible support for customers. As part of its transformation programme, Zenith successfully rolled out its asset management platform to all Commercial customers and is finalising the implementation for Corporate salary sacrifice customers.
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