FleetPartners Faces New Business Dip as It Rolls Out Major Transformation Program

FleetPartners’ Strategic Vision and FY24 Performance

At its 2025 Annual General Meeting in Sydney, FleetPartners Group Limited (ASX: FPR) CEO and Managing Director Damien Berrell outlined a year marked by significant progress and strategic clarity. The company’s FY24 results showcased a 13% growth in adjusted earnings per share (EPS), a testament to the effectiveness of its multi-pronged growth strategy focused on sustainable revenue, operational efficiency, and capital management.

Berrell credited the company’s 450-strong workforce for driving this success, highlighting the Strategic Pathways initiative as a key growth engine. This approach targets three under-penetrated markets: Corporate, Small Fleets, and Novated leasing, each delivering impressive new business writings growth of 20%, 41%, and 36% respectively. These segments have not only expanded FleetPartners’ customer base but also reinforced its leadership in sustainable fleet transition, particularly in the Corporate sector.

Accelerate Program: Transforming Operations for Profitability

Central to FleetPartners’ future profitability is the Accelerate program, a comprehensive business transformation project set to go live by mid-2025. With a $30 million investment, Accelerate aims to consolidate the company’s technology stack into a single operating system, automate and standardize processes, and unify multiple brands under the FleetPartners banner. These changes are expected to yield $6 million in annualized cost savings, enhancing operating leverage and customer service quality.

This transformation aligns with the company’s broader strategy to maximize returns from its organic growth initiatives, ensuring that operational efficiencies keep pace with expanding business volumes.

Capital Management and Share Buy-Back Impact

FleetPartners has also demonstrated disciplined capital management through an ongoing on-market share buy-back program initiated in FY21. To date, the company has repurchased and cancelled approximately 30% of its shares, with plans to complete a further $30 million buy-back. This equates to a 32% reduction in shares outstanding over four years, effectively enhancing shareholder value in the absence of more accretive acquisition opportunities.

Q1 FY25 Update and Outlook

While the first quarter of FY25 saw a 7% decline in new business writings to $211 million, assets under management (AUMOF) grew 9% year-on-year to $2.3 billion, underpinning the company’s recurring revenue base. Net Operating Income (NOI) before end-of-lease (EOL) income and provisions rose 6%, reflecting ongoing cost discipline and the gradual normalization of management fees.

Berrell acknowledged the expected tempering of used car pricing and a decline in EOL income per vehicle, which remains above long-term targets but is trending downward. Operating expenses are forecast to increase modestly by 2-3% in FY25, incorporating the anticipated $3 million savings from Accelerate.

Looking Ahead: Sustaining Growth Amid Market Dynamics

FleetPartners’ leadership expressed confidence in the company’s strategic direction, emphasizing the strength of its leadership team and the passion of its employees. The combination of organic growth through Strategic Pathways, operational efficiencies from Accelerate, and prudent capital management positions the company well to sustain long-term EPS growth despite near-term market fluctuations.

Investors will be watching closely as the Accelerate program goes live and as the company navigates evolving market conditions, particularly in the used vehicle segment and new business acquisition trends.