SG Fleet - FY2024 Annual General Meeting Update
SG FLEET GROUP LIMITED (SGF) Share Update October 2024 Tuesday 22nd
SG Fleet Reports Exceptional 20% Profit Growth in FY2024
SG Fleet has reported an impressive 20% growth in underlying profit after tax for the 2024 financial year, highlighting strong performance across its business channels.
Instant Summary:
- 20% growth in underlying profit after tax.
- Record highs in orders and deliveries.
- Special dividend declared at 15 cents per share.
- Successful integration and synergy extraction from LeasePlan acquisition.
- Significant growth in Novated leasing and Corporate channels.
Overview of Financial Performance
SG Fleet's 2024 financial year was marked by a remarkable 20% growth in underlying profit after tax. The company achieved record highs in both orders and deliveries, with substantial growth in its Corporate and Novated funded fleet sectors.
Despite anticipating a decline in used vehicle values, the market did not soften as expected. The robust revenue from strong deliveries offset any adjustments in end-of-lease disposal income. SG Fleet expects to return to a more normal revenue profile in the current financial year, with the LeasePlan integration on track to deliver significant synergies.
Operational Review and Strategic Developments
In Australia, SG Fleet's Corporate channel experienced strong growth due to structural demand drivers and improved stock availability. The company expanded its product offerings, with 85% of customers now using multiple products, a significant increase from previous years.
The Novated leasing channel also saw significant growth, driven by increased interest in low- and zero-emission vehicles. SG Fleet signed up numerous new employers, reflecting the growing popularity of novated leasing as an employee benefit.
International Operations
In New Zealand, SG Fleet maintained strong business development despite mixed economic conditions. The company successfully retained existing customers and gained new wins across various sectors.
In the UK, the economic environment improved, leading to increased car registrations and business opportunities. SG Fleet signed new accounts and extended existing arrangements, with short-term hire solutions attracting significant interest.
Future Outlook
SG Fleet remains optimistic about the future, with ongoing improvements in vehicle supply and a strong order pipeline. The company is on track to deliver $20 million in additional pre-tax run-rate synergies post-SAP migration, enhancing its operational efficiency and growth potential.
The impressive profit growth and strategic developments are likely to positively impact SG Fleet's stock. The special dividend and successful integration of LeasePlan will further boost investor confidence. However, the normalization of used vehicle values and revenue profiles may temper expectations in the short term.
Investor Reaction:
Analysts are likely to view the 20% profit growth favorably, highlighting SG Fleet's strong operational performance and strategic execution. The market may react positively to the special dividend and synergy extraction from the LeasePlan acquisition.
Conclusion:
SG Fleet's strong financial performance and strategic initiatives position it well for future growth. Investors should consider the company's robust order pipeline and successful integration efforts when evaluating their portfolios.