Tim Buchan to step down as CEO of Zenith

Zenith has announced that Tim Buchan is stepping down as CEO of the vehicle leasing company to become a non-executive director on the board at the end of next year (2024).

He will continue to lead as CEO until a successor is appointed.

Meanwhile, to enable the business to maximise its scale and joint operations, the corporate and consumer divisions will be brought together and led by Ian Hughes, CEO of the corporate division.

Andrew Kirby, currently acting CEO of the consumer division and CEO of Zenith’s rental business has decided to leave the business next year to take up a new leadership role outside of the automotive industry.

The senior management changes were announced alongside Zenith’s results for quarter two (Q2) and the first half of the 2023 financial year.

Its total fleet was up by 0.9% to 169,644 units, up 1% compared to the last quarter, while its funded fleet was up 8.1% to 77,814 units year-on-year, up 0.7% quarter-on-quarter.

Deliveries were up 30% and termination volumes up 36% in H1 FY23 YoY, as the fleet returned to a normal replacement cycle and the share of battery electric vehicles (BEVs) increases.

Turnover was £386 million up 21.1% year-on-year (H1 FY23: £318.7m), while gross profit was £70.6m down 1.3% YoY (H1 FY23: £71.5m) and EBITDA was £34m down 13% YoY (H1 FY23: £39.0m).

Zenith has maintained a healthy order bank at 9,130 vehicles, down from 12,015 at the end of March 2023 as pressures continue to ease in the vehicle supply chain. Order lead times also declined by 29% YoY to 147 days.

Its BEV fleet continued to grow, comprising 37% of the funded fleet and 41% of the order bank at 30 September 2023.

The corporate division achieved a number of new customer wins, while the consumer division remained profitable and is adapting to weaker direct-to-consumer demand in the challenging macro environment by building on its partnerships.

Developments include extending the contract with its largest white label solutions partner, Santander Consumer Finance, until the end of 2026.

Finally, the commercial division continues to grow its fleet management portfolio through new customer wins following a number of significant tender processes. Trailer utilisation has softened reflecting weaker consumer demand affecting the logistics and parcel volumes.

Buchan said: “I am very proud of how Zenith is performing against this tough economic backdrop.

“Our diversified business with operations across commercial, corporate and consumer segments has meant that, during our first half we have been able to deliver more fleet growth, strengthen our cash position and win new customers. Our fleet today stands at more than 170,000 vehicles.

“It is also reassuring to see the SMMT forecasting an increasing growth rate in registrations for the next two years.

“We continue to adapt and invest in our business for the future as we navigate increasingly difficult macro issues, including a challenging consumer environment resulting in weaker used car prices and reduced utilisation of our trailer rental fleet.

“We remain committed to our mission of eliminating tailpipe emissions by supporting our customers’ transition to electric and other zero emission vehicles.

“We are continuing to invest in our single asset management platform, continuing our focus on our ESG initiatives and consistently striving to improve customer outcomes.

“I’d like to take this opportunity to thank all our employees for their hard work, dedication and commitment and our customers and partners for their continued support and confidence in Zenith."