ZIGUP (ZIG) H2 2024 earnings summary

Executive summary

• Achieved record financial results with 13.7% revenue growth to £1,520.6m and EBIT up 13% to £213.7m, driven by strong demand, maturing contracts, and operational expansion in the UK, Ireland, and Spain.

• Completed a £30m share buyback, bringing total buybacks since 2022 to 10% of share capital, and returned £56m in dividends.

• Maintained a progressive dividend policy, with dividend per share up 7.5% to 25.8p, and increased balance sheet value with fleet assets at £1.3bn and leverage at 1.5x.

• Strategic investments in people, locations, digitalization, and ESG initiatives, including a 15% reduction in Scope 1 and 2 emissions and a 49% increase in apprenticeships.

• Rebranded to ZIGUP plc in May 2024, with a unified management structure and refreshed strategic pillars.

Financial highlights

• Underlying revenues (excluding vehicle sales) rose 13.7% year-over-year to £1,520.6m; total revenue up 23% to £1,833.1m.

• EBIT increased 13% to £213.7m; underlying PBT up 8.9% to £180.7m; underlying EPS up 10.4% to 61.4p.

• EBITDA reached £446.3m, up £34.1m year-over-year; ROCE improved to 14.5%.

• Net debt increased to £742.2m; leverage stable at 1.5x; 65% of debt fixed at 3.5%.

• Dividend per share up 7.5% to 25.8p; final dividend increased to 17.5p.

Outlook and guidance

• Expecting continued strong demand and further progress in FY2025, with net capex planned to increase by over a third to accelerate fleet replacement.

• Anticipate average fleet age to reduce to around 28 months in UK, Ireland, and Spain, improving maintenance costs and utilization.

• Cash flow expected to dip in FY2025 due to higher capex, but to rebound strongly in subsequent years; steady state cash expected to rise above £200m from FY2027.

• Leverage expected to remain within 1-2x target range, with moderate increase in FY2025-26.

• Pipeline includes sizable tenders, ongoing investment in EV capability, and positive momentum in services.