SG Fleet Group (SGF) H2 2024 earnings summary

Executive summary

• Underlying profit after tax grew nearly 20% year-over-year, driven by record orders and deliveries in both corporate and novated funded fleets.

• Achieved exceptional growth in FY24, with strong order growth and delivery volumes as supply improved and demand remained robust across segments.

• LeasePlan integration is on track and entering final phases, with anticipated synergies of about AUD 20 million and further savings from technology investments.

• A special dividend of AUD 0.15 per share was declared, bringing the total dividend to AUD 0.3393 per share, more than double last year.

Financial highlights

• Total net revenue increased by 11.4% year-over-year to $390.1m, despite a 27% fall in end-of-lease/Vehicle Risk Income.

• Operating income grew by 12.8%, and underlying NPAT rose by 19.2% to $89.7m versus the prior corresponding period.

• Net rental and finance income surged 44%, net mobility services revenue grew 10.2%, and finance commission was up 50%.

• Cash generated from operations after lease portfolio activities more than doubled to $223.6m.

• Underlying EPS up 19.2% to 26.23c; underlying NPATA up 17% to $99.6m.

Outlook and guidance

• Underlying EBITDA for FY25 is expected between AUD 88 million and AUD 95 million, reflecting normalization of market conditions.

• Interest costs will rise by AUD 7.3 million in FY25 due to the expiry of a favorable interest rate swap.

• Operating expenses will remain elevated through FY25 due to ongoing technology investments, with cost reductions expected post-integration in FY26.

• Order pipeline normalization and used vehicle value adjustment expected to extend over multiple periods.

• Gradual return to a more stable environment is anticipated, with continued growth in deliveries and finance commissions.