– By Caroline Falls –
SG Fleet, one of four listed Australian fleet services groups, said it is actively looking for further acquisitions to build its business.
“Scale is of paramount importance in this business and if opportunities that meet our acquisition criteria present themselves, we will not hesitate to actively pursue them,” said Robbie Blau, CEO of SG Fleet.
Blau was commenting after the group posted another double-digit profit result. SG Fleet released its results to the Australian Stock Exchange, saying it made a 16.1 percent increase in net profit to $47.0 million for the year ended June 30, compared with the year earlier. That headline result is after costs of acquisitions including Melbourne-based novated specialist nlc. Stripping those costs out, the underlying profit after tax was $51.2 million, or 26.4 percent more than a year earlier.
Noteworthy, too, is the fact that the fleet services group was able to bolster its margins to 34.9 percent, increase its underlying cash earnings per share 29.2 percent to 21.77 cents per share and declare a fully franked final dividend of 7.63 cents for a total annual payout per share of 12.853 cents, or 18.5 percent more than last year.
“We achieved growth across all individual revenue lines, reflecting an increase in total fleet size as a result of further customer wins, as well as deeper penetration within existing customers. The nlc business made a strong contribution to revenue and we continue to derive synergies as the integration of the business progresses”.
SG Fleet also recently acquired U.K.-based Fleet Hire, a business that provides contract hire, salary sacrifice services, short-term rentals and fleet management. “The acquisition provides us with scale and profitable growth in the UK and establishes a platform for us to build on and execute our strategic plans in this attractive market.” It was bought after the close of the company’s final half financial reporting period.
Back home, Blau said the group had entered into an exclusive arrangement with share car entity GoGet to offer their vehicles and technology to SG Fleet’s customers. He said a government agency was currently trialling the offer.
Talking about government, Blau said the NSW Government had, since appointing them as one of two providers of fleet management services, assigned some 95 percent of its 21,500 vehicles over to SG Fleet.
“This is strong recognition of SG Fleet’s industry leadership, as well as our product and service quality,” Blau said.
Blau summed up the outlook for the company as “strengthening”.
“Our competitive position in Australia was enhanced by the nlc acquisition and the full impact of this will only start to emerge in the current financial year. Similarly, the landmark NSW Government win will start to bear fruit after the current ramp-up phase is completed. New Zealand has gone from strength to strength and is now a profitable, established presence in that market. In the UK, we will stay our strategic course and build scale over time.”
