In the last week of July an article was published by The Australian that the major shareholder of SG Fleet wanted to cash out almost 20 years after it purchased Fleet Australia from the Commonwealth Bank in 2006.
The report suggested Super Group, a logistics company based in South Africa, was considering a sale of its 53% share of SG Fleet so it could return the funds to its local operations.
Previously SG has been the one to make the move in the market with acquisitions of novated leasing provider NLC in 2016 and Leaseplan in 2021. The CEO, Robbie Blau, has repeatedly made the case for industry consolidation claiming the economies of scale provide significant benefits.
The Leaseplan acquisition made SG Fleet the largest player in the Australian market and it has been a massive effort to transition the brand, people and systems. With the work to bring both businesses together nearing completion, potential suitors should be wary of the challenge to repeat the exercise with another entity.
SG Fleet is not the only FMO listed on the ASX. Fleet Partners, Smartgroup and McMillan Shakespeare are also public companies with shareholders that expect profit growth year on year. In recent years profits have been driven by pandemic induced high used car prices and a surge in novated leasing because of the FBT Exemption on electric vehicles. These external influences have disrupted the normally stable income streams so investors might be hoping for similar profit levels once the dust settles.
Custom Fleet is the other big player in the market and they are owned by Element Fleet Management which is the largest pure-play automotive fleet manager in the world according to its website. Listed on the Canadian stock exchange it has hasn’t shown any interest in future consolidation since acquiring Custom Fleet from GE in 2015.
