Zenith has published latest results, revealing strong fleet growth alongside financial impacts from inflation and a drop in used car prices.

Tim Buchan, Zenith chief executive officer

Total fleet for the first three-quarters of the 2024 financial year was up 3.3% year-on-year to 173,760 units and up 2.4% quarter-on-quarter.

The funded fleet increased 5.1% YoY to 78,301 units, up 0.6% QoQ, with 10.2% YoY fleet growth in company car and salary sacrifice schemes.

Deliveries were up 10% YTD and termination volumes rose 35% Q3 YTD FY24 YoY.

Zenith also reported normalisation in the order bank, reaching 7,731 vehicles at the end of December 2023, with lead times now at 120 days, a level last seen in March 2021. The battery electric vehicle (BEV) fleet accounted for 39% of the funded fleet and 42% of the order bank at 31 December 2023.

However, the average termination profit per vehicle was down 37% YTD YoY due to the “current weakness” in used vehicle prices, both for BEV and ICE vehicles.

Operating expenses rose to £54.4m, up 9% YoY (Q3 YTD FY23: £50.0m) and driven primarily by inflation and ongoing investment.

EBITDA was down 22% YoY to £46.0m(Q3 YTD FY23: £59.0m).

Zenith said it’s launched a new initiative to extend the current BEV fleet with existing drivers, mitigating inflation of their lease costs and the residual value risk.

Other developments included growth in the Commercial division fleet, following the successful onboarding of Travis Perkins and Wales & West Utilities, while the Consumer division expanded with a business contract hire (BCH) proposition for small businesses and a white-label partnership with a major high street bank to provide personal contract hire (PCH) solutions for BEVs.

Tim Buchan, Zenith chief executive officer, commented: “I am pleased with our performance during the quarter. While inflation continues to drive up operating costs, and weaker consumer demand contributes to a decline in used vehicle prices, Zenith’s diversified offering and innovative approach has again underpinned our top-line growth.

“We remain focused on ensuring the optimal efficiencies of our operations, while investing in new propositions and service solutions that can deliver the most impact. We have expanded our offering by opening new vertical markets such as business contract hire (BCH), as well as launching a significant white-label partnership with a high street bank. We’ve also seen strong growth in our funded corporate company car and salary sacrifice schemes, which have increased by 10% year-on-year.”

Buchan also announced that Andrew Kirby, currently acting CEO of the Consumer Division and CEO of the rental business, will stay on within the group, and on the leadership board to support delivery of the evolving group transformation programme.

Zenith had previously announced that Kirby would leave the business in 2025 to take up a new leadership role outside of the automotive industry. Instead, he will now lead the business transformation team, which will migrate all corporate division customers onto Zenith’s new digital platform and oversee the introduction of a new financial system.

Buchan added: “Our liquidity remains strong, with over £100m across our available cash and revolving credit facilities, enabling us to continue growing the fleet and delivering our strategic objectives.

“As always, I’d like to thank all our colleagues for their continued hard work and dedication and our customers and partners for their support and confidence in Zenith.”