FleetPartners Group (ASX: FPR) has delivered another year of strong financial and operational results, reflecting its resilience, innovation, and commitment to meeting the evolving needs of its customers. The FY24 results, presented at the recent Annual General Meeting, highlighted significant progress across key strategic areas and set the stage for further growth in FY25.
Record Growth in Key Segments
The Group’s strategic focus on three core markets – Corporate, Small Fleets, and Novated Leasing – has paid dividends, with impressive performance across the board:
- Corporate Market: New business writings (NBW) grew by 20% year-on-year, driven by new customer wins in sectors such as insurance, manufacturing, and healthcare. The division maintained high customer retention rates, showcasing its strong market leadership and commitment to customer relationships.
- Small Fleets: The Group achieved a remarkable 41% growth in NBW from a lower base, onboarding 150 new small fleet customers during the year. This performance validates the demand for FleetPartners’ tailored small fleet solutions and the effectiveness of its product offerings.
- Novated Leasing: Novated leasing experienced record-breaking growth, with NBW up by 36%. The strong demand for electric vehicles (EVs) in this segment was evident, with 53% of new leases in FY24 being EVs. Enhanced consultant training and improved conversion rates further fueled this success, supported by white-label pilot programs with several original equipment manufacturers (OEMs).
Operational Efficiencies and Transformational Initiatives
FleetPartners continues to evolve its operations to ensure long-term sustainability and profitability. The Accelerate Program, a multi-year business transformation initiative, remains central to this strategy. Key highlights include:
- Simplification of Technology Systems: By consolidating two operating systems into one, the Group expects significant cost savings and improved operational efficiencies. The new system, scheduled to go live by March 2025, will also enable faster digital innovation and enhanced customer experiences.
- Brand Consolidation: FleetPartners has successfully unified four brands under a single banner, strengthening its brand clarity and market positioning. This move ensures a consistent message for customers and maximizes marketing efficiency.
- Cost Savings and Productivity Gains: The Accelerate Program is expected to deliver annual cost savings of $6 million, enhancing profitability while enabling the team to focus on high-value tasks.
Easing Vehicle Supply and Normalisation of End-of-Lease Income
After years of supply chain disruptions, vehicle supply has returned to normal, significantly reducing wait times for key models. This improvement has allowed the Group to meet growing customer demand more effectively and maintain its robust portfolio of assets under management or financed (AUMOF), which grew by 11% year-on-year to $2.3 billion.
However, as used car prices normalise, End-of-Lease (EOL) income has started trending downward from its peak of $5,500 per vehicle toward pre-pandemic levels of $2,500. This shift reflects market adjustments but remains within the Group’s long-term expectations.
Strong Financial Performance and Capital Management
FleetPartners reported several financial milestones in FY24:
- Net Operating Income (NOI) before EOL and provisions increased by 5%, driven by the expansion of AUMOF and disciplined cost management.
- NPATA (Net Profit After Tax and Amortisation) came in at $88 million, slightly down by 1% year-on-year, primarily due to reduced management fees associated with warehouse funding.
- The Group’s share buy-back program continued, with $30 million allocated for 1H25, reflecting a strong commitment to returning value to shareholders. Since the program’s inception in FY21, FleetPartners has repurchased and cancelled approximately 30% of its shares.
Sustainability and ESG Leadership
FleetPartners remains at the forefront of environmental, social, and governance (ESG) practices. In 2024, the Group maintained its Climate Active Carbon Neutral certification in Australia and Toitū Net CarbonZero certification in New Zealand. Additionally, the company issued its inaugural $75 million Green Bond, further demonstrating its commitment to sustainable investment.
The Group’s Reflect Reconciliation Action Plan, endorsed by Reconciliation Australia, highlights its dedication to fostering stronger relationships with Aboriginal and Torres Strait Islander peoples. FleetPartners also continues to be recognised as a Workplace Gender Equality Agency (WGEA) Employer of Choice for Gender Equality.
Outlook for FY25
Looking ahead, FleetPartners is poised for continued growth and transformation. Key initiatives include:
- The launch of the new ERP system by March 2025, expected to drive significant operational efficiencies.
- Continued focus on Strategic Pathways to expand its presence in Corporate, Small Fleet, and Novated markets.
- Sustained efforts to meet the increasing demand for EVs, aligning with broader industry and societal shifts toward sustainability.
FleetPartners’ performance in FY24 underscores its ability to adapt, innovate, and lead in an evolving market. With a clear vision, a committed team, and robust strategic initiatives, the Group is well-positioned to deliver sustainable growth and create value for shareholders and customers alike.
