– By Caroline Falls –
SG Fleet, a listed fleet management group, said it has estimated COVID-19 cut its revenue in the three-month period April to June 42 percent, from the same period a year earlier.
The statistic is among the company’s results presentations for the full year ended June 30, and filed with the Australian Stock Exchange. Revenue dropped in the 12 months to $172.3 million, 17.6 percent lower than in 2019. SG Fleet managed to scrape in with an after-tax profit for the year of $36 million.
SG Fleet’s CEO Robbie Blau acknowledged that the challenges in the general environment in the second half of the financial year were truly unprecedented.
“This has been a unique reporting period for us and for many others,” said Blau, adding, “Our immediate focus has of course been to ensure the wellbeing of our employees and our customers as the COVID-19 situation emerged. We all pulled together to maintain service quality and continuity, and our businesses remained operational throughout.”
Consumer business and weakness in private new car sales at the start of the 12-month period eroded novated leasing, and this was compounded as COVID-19 impacted and enquiry levels dropped sharply from mid-March. Patchy consumer demand and the unavailability of stock resulted in a decline of 33.6 percent in novated deliveries, including extensions, SG Fleet said.
On the other hand, a good corporate business partially offset the slump in consumer business. Fleet business grew 2.4 percent from 2019. SG Fleet noted that a trend towards outsourcing and mobility evolution accelerated in the COVID environment.
“Throughout the period companies continued to tender their business and SG Fleet was able to win the majority of tenders pursued,” SG Fleet said in a press release about the results.
Sharp downturns in new vehicles sales and an uptick in lease extensions also afflicted income from the UK operations. The period also brought new opportunities, including winning the largest ever fleet management contract.
In New Zealand, the business saw a halt in new vehicle registrations and temporary suspension on disposals. By the end of June tender activity was highest it’s been in “a number” of years. Meanwhile, still in NZ, work commenced on a new contract with Northpower, and the company was awarded another major utility contract.
SG Fleet declared a final dividend of 3.053 cents, taking the full year dividend payout to 9.996 cents. SG Fleet’s share price rose to $1.62 on the results, but that compares with more than $3.00 a share a year ago. The underlying profit, which excludes amortisation of intangible assets, slumped to $43.7 in 2020 FY, from $60.5 million in 2019.
SG’s outlook suggests a desire for fleet efficiencies is driving broadening interest in outsourced services. Among other things, it also says that SG Fleet’s corporate business is focussed on fulfilling large order books.
— Caroline Falls is a freelance journalist. She can be contacted at email@example.com.