A Stable Transition Period with Strong Sustainability Momentum
FleetPartners Group Limited (ASX: FPR) has released its financial results for the first half of FY25, delivering a solid performance despite temporary setbacks from a major systems transformation. The results reflect a business that is operationally sound, strategically focused, and well-positioned to grow, with sustainability playing an increasingly prominent role in its customer offering.
Resilience Amidst Transformation
The standout operational headline from the period ending 31 March 2025 is the successful completion of Accelerate, FleetPartners’ multi-year transformation program. Finalised in February, the program consolidated the Group’s operations onto a single technology platform and is expected to deliver more than \$6 million in annualised cost savings. While the cutover disrupted operations temporarily, particularly affecting new business writings (NBW), the long-term strategic benefits are already starting to show.
“Operationally we are better placed than we have ever been to execute our strategic agenda and pursue growth,” said CEO Damien Berrell, adding that these benefits will continue to unfold throughout the remainder of the year.
Key Financial Metrics
FleetPartners reported:
- Assets under management or financed (AUMOF) of $2.3 billion, a 6% increase on the prior corresponding period (pcp).
- NBW of $370 million, down 17% on pcp. However, this was better than the 20% drop expected in the March trading update, and much of the decline was attributed to the unwinding of the order pipeline and the temporary pause during the system cutover.
- Fleet Australia NBW was down 24%
- Novated NBW was down 9%
- Fleet New Zealand NBW fell 17%
- Net operating income (NOI) before End of Lease (EOL) income and provisions rose 8% to $82.1 million.
- End of Lease (EOL) income dropped by 18% to $29.5 million, largely due to fewer disposals, though the per-unit average of $6,062 remains well above pre-COVID levels.
- NPATA (Net Profit After Tax and Amortisation) fell 7% to $38.9 million, but excluding EOL, it actually increased 10% over the same period.
- Cash EPS was flat at 17 cents, supported by a 6% reduction in shares from continued buy-backs.
Lease Extensions Continue to Bolster Margins
One of the more nuanced takeaways was the continued benefit from elevated lease extensions, particularly in Fleet Australia. The Group noted that “Fleet Australia margin continues to normalise due to lower management fees on replacement operating leases compared to extended leases which built up” during the pandemic period. This dynamic helped maintain margins but is expected to moderate over time.
Sustainability Continues to Gain Traction
FleetPartners is playing an active role in helping businesses transition to more sustainable transport solutions. The Group conducted 105 sustainable fleet transition consultation reviews since the start of FY24.
In Novated leasing, 62% of NBW in 1H25 was for electric or plug-in hybrid vehicles (EVs/PHEVs), up from 56% in 2H24, showing a steady upward trend in consumer preference and organisational alignment with lower-emission options.
Temporary Challenges, Long-Term Strength
While the system cutover did temporarily increase trade receivables, impairments and arrears (with 90+ day arrears peaking at 70bps vs a 39bps average), these impacts are not expected to persist beyond FY25. Net debt at 31 March was $17.1 million due to the timing mismatch in warehouse funding, but excluding these one-off factors, FleetPartners would have reported a net cash position of approximately $24 million.
Organic cash generation remained strong at \$45.5 million, representing a 112% cash conversion rate, supported by strong EOL values and tax timing benefits.
Capital Management and Outlook
FleetPartners will continue to return capital to shareholders, announcing a $25.3 million on-market share buy-back for 2H25—representing 65% of 1H25 NPATA. Since 2021, the Group has returned a cumulative $255 million to shareholders through buy-backs.
Looking ahead, FleetPartners is optimistic. Despite subdued economic conditions in New Zealand, Australian operations are expected to resume normal growth as the system stabilises. With new tenders won and strong EV interest continuing—particularly in the Novated channel—the Group sees ample opportunity in underpenetrated markets across corporate, small fleet, and employee vehicle sectors.
Damien Berrell summarised the sentiment best: “The Group is now entering an exciting new chapter… complemented by significantly enhanced operational capabilities, positioning it to capitalise on new organic and inorganic opportunities with greater agility and confidence”.
