Zenith repays furlough cash as fleet size grows

Zenith has delivered strong growth and profitability, with turnover up £65.4 million to £402.6m, according to its quarterly results.

During the third quarter (October 1 – December 31, 2021) Zenith’s total fleet size grew by 6,600 to 158,000, while EBITDA grew by £1.4m to £17.9m, bringing total EBITDA for the first nine months to £57.2m, up £14.5m on the prior period.

It means that the vehicle leasing company has recorded three consecutive quarters of record order take despite constraints to the supply of new vehicles as a result of the ongoing shortage of semiconductors.

Zenith’s order book for new cars in its corporate division grew substantially, from 8,600 at the end of September, to 10,900 at December 31, 2021, then again to 12,100 as of February 28, 2022, more than double the figure at the same point in the prior year.

Zenith’s consumer retail business, ZenAuto, meanwhile, has also grown its order book to more than 1,000 vehicles for the first time.

Tim Buchan (pictured), chief executive officer at Zenith, said: “Our Q3 results demonstrate the ongoing strength and resilience of the Zenith Group.

“While the global slowdown in new car production has continued, the nature of our business mix means that we are able to offset this through generating value from our existing fleet of vehicles.”

More than half of Zenith’s corporate order book is now for battery electric vehicles (BEVs) demonstrating continued strong demand from customers.

Zenith has also decided to repay the UK Government the £900,000 it had received during the pandemic to cover employee furlough payments. The money will be repaid over the next few weeks.

Buchan continued: “I am encouraged to see that the high levels of demand for electric vehicles have shown no signs of fading and that, across our entire order book, more than half of orders are for BEVs.

“Zenith’s performance has remained strong throughout the pandemic, and with the Group in such good financial condition, we were pleased to be able to return all of the furlough funding that we had received from the Government.

“We are grateful for this support during such a testing time for the country, and we feel that repaying the money is the right thing for Zenith to do as a responsible business.”

In January, Zenith raised a £475m green bond to help it source and finance electric vehicles (EVs) to meet growing demand in the marketplace.

The UK vehicle leasing company also entered into a new £65m revolving credit facility to replace an existing arrangement.