SG Fleet has announced its financial results for the first half of the 2025 financial year (1H2025), reporting a Net Profit After Tax (NPAT) of $41.1 million, down from $45.5 million in the same period last year. The company’s performance was bolstered by a higher volume of operating lease disposals, which contributed to increased used vehicle supply, softening resale values but still holding passenger vehicle prices at 115% of pre-COVID levels. Growth in novated leasing, an increase in funded fleet, and a strategic reduction in non-financed fleet management (Lite Fleet) were also key themes in the results.
Higher Disposal Volumes Support Revenue Growth
SG Fleet’s total net revenue for 1H2025 rose 6.6% to $210.7 million, reflecting stronger delivery volumes and increased funding penetration. However, NPAT declined by 9.8% compared to 1H2024, reflecting normalising used vehicle values and higher operating expenses, including increased IT investment related to the final phase of the LeasePlan system migration.
The company’s earnings per share (EPS) fell to 12.01 cents, down from 13.31 cents in 1H2024, while cash EPS declined to 13.46 cents. Despite this, growth in net mobility services revenue (+20.0%) and net additional products and services revenue (+12.3%) demonstrated SG Fleet’s ability to extract more value from its existing customer base.
Impact on Used Car Market
A key highlight of SG Fleet’s performance was the impact of higher-than-anticipated disposal volumes. As vehicle supply improved, more operating lease vehicles reached the end of their contracts, increasing the availability of used cars in the market.
This surge in supply softened used vehicle prices, which declined to 115% of pre-COVID levels, down from 125% in the second half of 2024. While used vehicle values are still elevated compared to historical norms, they are trending downwards as more stock enters the market. Notably, electric vehicle (EV) used values have yet to recover, indicating ongoing pricing challenges in the second-hand EV segment.
The impact of lower resale values was reflected in a 27.2% reduction in average gross profit per vehicle at end-of-lease, although this was offset by higher overall disposal volumes.
Novated Leasing Growth: A Strong Performer
SG Fleet’s novated leasing segment continued to expand, driven by growing employer interest and improved vehicle delivery times.
The company reported that low-emission vehicles accounted for approximately 70% of novated lease demand, reinforcing the trend towards greener fleets. Novated leasing growth was further supported by higher lead conversion rates and strong customer retention, positioning it as a key revenue driver.
In terms of fleet numbers, new novated deliveries grew by 7.5%, while total novated orders increased by 15.4% year-on-year. The company’s focus on cross-selling novated products into the corporate segment is proving effective, with continued uptake from both employers and employees.
Reduction in Fleet Management v Expansion in Funded Fleet
SG Fleet continued its strategy of shifting customers from non-funded fleet management to funded lease arrangements, particularly through sale-and-leaseback transactions.
As a result, the company’s Lite Fleet (non-financed, fleet-managed customers) declined to 141,013 vehicles, down from 149,435 in 1H2024. The move away from Lite Fleet was attributed to conversions to funded leases and a decision to exit low-margin LeasePlan customers.
At the same time, the total funded fleet increased, reflecting strong demand for financing solutions. Corporate-funded new deliveries increased by 12.1%, demonstrating that companies are shifting towards leasing rather than outright vehicle ownership.
Market Conditions Across Key Regions
Australia: High Tender Activity and Business Expansion
SG Fleet’s Australian operations remained highly active, with a strong tender pipeline and increased cross-selling between corporate and novated leasing. The company noted a significant number of customer wins, supported by referrals from its European-based partner, Ayvens.
New Zealand: Stabilising Environment
In New Zealand, the competitive landscape became more rational, with a previously aggressive new entrant scaling back its approach. The used car market remained stable, with some segments experiencing price increases. SG Fleet capitalised on this environment by winning new government accounts and successfully transitioning more customers from fleet management to funding arrangements.
United Kingdom: Steady Growth and EV Demand
In the UK, new car registrations continued to increase, supported by lower inflation and improving economic conditions. Electric vehicles retained a 20% market share, while used EV values began to stabilise. SG Fleet’s UK business achieved further growth through new customer acquisitions and the introduction of Novalease salary sacrifice programs to tool-of-trade customers.
Future Outlook
Looking ahead, SG Fleet anticipates a further decline in used vehicle values as more end-of-lease stock enters the market. The company expects disposal volumes to moderate in 2H2025, bringing results back in line with previous forecasts.
The order pipeline remains elevated, but is normalising at a slower rate than expected, particularly in the corporate and novated segments. As this continues into FY2026, SG Fleet sees opportunities to grow its funded fleet and expand its product penetration within existing accounts.
CEO Robbie Blau highlighted the company’s strong business development activity and continued progress in digital innovation as key drivers for long-term success. The LeasePlan system migration is in its final stages, which should unlock full operational synergies and further streamline SG Fleet’s offering.
SG Fleet’s 1H2025 results reflect a period of transition, as used vehicle prices normalise and disposal volumes begin to stabilise. While profitability was impacted by softening end-of-lease values, the company continued to achieve growth in novated leasing, funded fleet expansion, and product cross-sell opportunities.
The decline in Lite Fleet and a shift towards more funded lease agreements aligns with SG Fleet’s long-term strategy of driving higher-margin recurring revenue streams. Meanwhile, the strong novated leasing performance and increased interest in salary packaging for low-emission vehicles provide a solid foundation for future growth.
As vehicle supply constraints ease and the order pipeline gradually normalises, SG Fleet is well-positioned to capitalise on emerging opportunities in corporate fleet funding, novated leasing, and EV adoption.
