Zenith reports growth but BEV used car market challenges remain

The decline in residual values (RVs) on used battery electric vehicles (BEVs) have continued to impact the financial performance of Zenith.  

The top 10 vehicle leasing company, with a risk fleet of 69,492 cars and vans, according to this year’s FN50, grew adjusted EBITDA excluding residual value profits by 14.1% in the six months up to September 30.

However, lower RV profits continued to impact overall adjusted EBITDA, which declined by 31.7% to £23.7 million.

The total managed fleet remained flat at 169,000, while the funded fleet was down 1.6%, with 5.6% growth in corporate-sponsored schemes, driven by consistently high levels of customer retention, it said.

Positive progress continues on Project Volt, the group’s lease extension programme to address the decline in used electric vehicle (EV) prices, with almost 1,500 BEVs formally extended since the inception of the programme.

Tim Buchan, Zenith chief executive officer, said: “We delivered good progress in the first half of FY25, and the strengthening of our underlying business enabled us to achieve 14.1% growth in adjusted EBITDA, excluding RV profits. 

“This progress included improving contract interest margins, extending the older BEV cohorts, new vehicle deliveries being set with lower RVs to reflect current market conditions, and rolling out our new technology.

“We continue to deliver on our long-term strategy, and while the economic environment remains challenging and weakened used car prices continue to impact our industry, there are tentative signs that used BEV and ICE (internal combustion engine) vehicle pricing has stabilised recently.”

He added: “We were encouraged by the Government’s commitment to the electric vehicle transition in the Budget in October, providing long-term clarity on financial and other incentives for BEVs.”

Following several new customer wins, the total commercial fleet has seen an increase of 10.2% year-on-year to 53,230 vehicles, driven by growth in the managed fleet.  

During Q1 FY25, Zenith ceased operations in three workshops in England, transferring the work to our expanding Mobile Service Unit (MSU) fleet and third-party network.