Novuna Vehicle Solutions generates pre-tax profits of £54.2m

Novuna Vehicle Solutions, part of Mitsubishi HC Capital UK, generated pre-tax profits of £54.2 million in the past financial year, contributing to overall profits of £130m for the Group

The strong performance, says Novuna Vehicle Solutions, was achieved amidst a decline in vehicle production led by semiconductor microchip shortages.

The fleet value of Novuna Vehicle Solutions, formerly Hitachi Capital Vehicle Solutions, hit £1.5 billion, up 21% year-on-year, consolidating its position as the seventh largest leasing company in the UK, according to the FN50. 

The company’s success can be attributed predominantly to increased revenues from an 8% expansion in its contract hire fleet, with the addition of more than 6,000 vehicles to its operating fleet of more than 98,000 assets.

In addition, the business capitalised on strong demand in the used car market, as global supply chain challenges resulted in long delivery times for new vehicles. Gains have also been made from lower bad debt charges, an area that was severely hit in the prior year by the pandemic, it said.

Jon Lawes (pictured), managing director at Novuna Vehicle Solutions, said: “Despite a year of significant market headwinds, we have expanded our operating fleet, defying industry trends.

“Our growth trajectory correlates with the progression of our key strategic objectives as a business, namely the rollout of our market-leading decarbonisation proposition across all vehicle types, our strategic investment in IT, and our decision to rebrand a longstanding UK business to become a future facing one.

“In doing so, we have recognised both the market conditions and motorists’ growing desire to switch to an EV.”

Novuna Vehicle Solutions has invested heavily in a decarbonisation strategy, which aims to manage the entire end-to-end decarbonisation transition for fleets and consumers across the UK.

The company has also made a firm commitment to electrify 100% of its car and small van fleet (3.5 tonnes and under) and 50% of its funded van fleet (vehicles over 3.5 tonnes) by 2030. 

Novuna Vehicle Solutions, based in Trowbridge and Newbury, delivered annual growth of 12% within the division’s personal leasing offering, which is in excess of 43,000 vehicles.

This was driven, it says, by strengthening the proposition of its IT framework, with its online platform providing users with a “frictionless” end-to-end process thanks to automated underwriting, digital documentation, and e-signature capabilities.

In February, the business underwent a strategic rebrand from Hitachi Capital Vehicle Solutions to become Novuna Vehicle Solutions, following the merger in 2021 of its parent company, making it part of Mitsubishi HC Capital Inc. 

Novuna’s advocacy for zero-emission vehicles remains a primary driver of future growth and a key tenet of its long-term strategy.

Alternative fuel vehicles have increased from 11% to 19% across all asset types in the funded customer fleet, with the overall pure EV fleet increasing by 173% year on year.

Lawes said: "Over the course of the year, we have continued to carve out a reputation as sector leaders in decarbonisation and we are continuing to help drivers, businesses and fleets throughout their journey to electrification.

“As leading proponents of zero-emission vehicles, we are developing our own proprietary end-to-end decarbonisation solution for fleets of all sizes, and our goal to electrify our entire car and small van fleet by 2030 remains firmly in reach.”

Record Group profits for Mitsubishi HC Capital UK

At Group level, Mitsubishi HC Capital UK PLC recorded a pre-tax profit of £130m for the financial year, a 25% increase from £104m the previous year.

Robert Gordon, CEO of Mitsubishi HC Capital UK, said: “Our exceptional results with record profits and new business volumes are testament to the strides we have made to meet and exceed customer expectations despite the headwinds of the past 12 months.”

Read Mitsubishi HC Capital UK PLC’s full annual report for FY21/22.