SG Fleet Reports 15% Revenue Rise and 7.6% Fleet Growth in First Half 2025

Strong Financial Performance Amid Market Headwinds

SG Fleet Group Limited delivered a solid financial performance in the first half of fiscal 2025, reporting a 15.2% increase in revenue to A$656.9 million. This growth was underpinned by continued strong delivery volumes, particularly in the corporate and novated leasing channels, as well as accelerated innovation initiatives that enhanced revenue streams across its integrated mobility services.

Despite a challenging used vehicle market, with softening residual values and subdued electric vehicle (EV) used values, SG Fleet managed to grow its net vehicle risk income by 5.6%, driven by improved margins in its in-life risk portfolio. The company’s funded fleet under management expanded by 7.6%, supporting a 20% rise in net mobility services revenue, reflecting higher fleet utilisation and successful cross-selling efforts, especially into LeasePlan customers.

Operational Expansion Across Key Markets

Operationally, SG Fleet made further progress in stabilising its New Zealand business amid subdued vehicle registrations and easing competitive pressures. In the United Kingdom, the company benefited from a supportive economic backdrop with lower inflation and interest rates, alongside government tax incentives boosting EV uptake to around 20% market share. These factors contributed to steady growth in the UK customer base and new business wins, including supplier panel expansions and outsourcing conversions.

In Australia, business development activity remained at exceptional levels, with multiple sale and leaseback transactions and increased product penetration. Novated leasing saw strong employer interest and improved lead conversion, supported by faster delivery times and a majority of low emission vehicle orders, aligning with broader sustainability trends.

Order Pipeline and Supply Chain Dynamics

SG Fleet’s order pipeline remains elevated, though the company noted a gradual normalisation heading into fiscal 2026. The tool-of-trade pipeline reduced by approximately 25% during the half, while the novated pipeline decreased by about 30%, both still at roughly 2.5 times normal levels. Supply chain improvements helped reduce aftermarket challenges and isolated backlogs for high-demand models, supporting stronger delivery volumes.

Used vehicle values saw a slowing adjustment, with strong attendance at vehicle auctions, although EV used values have yet to recover fully. The company’s strategic focus on innovation and digital customer journeys aims to further enhance operational efficiencies and customer satisfaction.

Financial Position and Cost Management

Operating expenses increased to A$110.7 million, reflecting costs associated with the final phase of the LeasePlan SAP system migration and a full impairment of the Carly investment. Interest costs rose due to the unwind of interest rate swaps, a previously flagged development. Despite these headwinds, SG Fleet maintained a healthy operating EBITDA of A$86.9 million and a net profit after tax of A$41.1 million.

The company’s balance sheet showed material growth in lease portfolio assets and related borrowings, with a slight improvement in the lease portfolio advance rate from 88% to 90%. Corporate leverage remained manageable at 0.62x, supporting ongoing investment in fleet expansion and technology upgrades.

Looking Ahead

SG Fleet’s continued growth trajectory is supported by strong demand in corporate and novated leasing, ongoing innovation, and geographic diversification. However, the company remains cautious about the used vehicle market dynamics and interest rate environment, which could influence future profitability and cash flow. The successful completion of the LeasePlan system migration and further normalisation of the order pipeline will be key milestones to watch in the coming quarters.