Zenith reports growth in underlying earnings

Zenith, an independent vehicle leasing and fleet management company, has released a trading update for the first half of its 2025 financial year, covering the six months to September 30, 2024. The company reported a 14.1% year-on-year (YOY) increase in adjusted EBITDA, excluding residual value (RV) profits, showcasing resilience in a challenging economic environment.

Despite the robust growth in its underlying earnings, overall adjusted EBITDA declined 31.7% to £23.7 million, impacted by lower RV profits as the market for used electric vehicles (EVs) remained volatile.

Zenith maintained its position as an industry leader with a total fleet of 169,000 vehicles, remaining flat over the period. The company continues to make strides in electric vehicle adoption, with battery electric vehicles (BEVs) now constituting 45% of the corporate and consumer-funded fleet, totalling 26,719 vehicles. Nearly half (47%) of the vehicles in its order bank are BEVs.

Zenith’s commitment to sustainable practices was further demonstrated through Project Volt, its lease extension programme aimed at mitigating declining used EV values. Since its inception, nearly 1,500 BEVs have been formally extended, supporting customers in maintaining value amid market challenges.

Corporate-sponsored schemes grew by 5.6%, driven by strong customer retention and new client acquisitions. The commercial fleet sector also recorded a 10.2% YOY increase to 53,230 vehicles, reflecting growth in the managed fleet.

Additionally, Zenith streamlined its operations by ceasing activity in three English workshops, transferring services to its expanding Mobile Service Unit (MSU) fleet and third-party networks.

Looking ahead, Zenith is poised for a leadership transition as Richard Jones takes over as CEO in Q1 2025.

Outgoing chief executive officer Tim Buchan reflected positively on the company’s performance:

“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 RV profits. While the economic environment remains challenging, there are tentative signs that used BEV and ICE vehicle pricing has stabilised recently.

Buchan also highlighted the UK government’s recent budget announcement supporting the transition to electric vehicles, which provides long-term clarity on incentives for BEVs.