FleetPartners Group Limited reported a 2.6% revenue increase to $377 million for the half-year ended March 2025, while net profit after tax declined 5.3% to $34.5 million, reflecting operational headwinds from a major system upgrade.
- Revenue rises 2.6% to $377 million
- Net profit after tax falls 5.3% to $34.5 million
- NPATA down 6.9% to $38.9 million
- Operating expenses and bad debts increase due to system cutover
- No interim dividend declared; share buy-back program continues
Financial Highlights and Operational Context
FleetPartners Group Limited has released its half-year results for the period ending 31 March 2025, showing a modest revenue growth of 2.6% to $377 million. However, net profit after tax (NPAT) declined by 5.3% to $34.5 million compared to the prior corresponding period. The company’s net profit after tax excluding amortisation (NPATA) also fell by 6.9% to $38.9 million, signaling some operational pressures despite top-line growth.
The revenue increase was primarily driven by growth in the lease portfolio, particularly within the Novated segment, which benefited from rising demand for electric vehicles. This segment’s net operating income (NOI) rose by $4.8 million, supported by the tax advantages associated with electric vehicles, although some of these incentives are set to expire or be reviewed in coming years.
Impact of Accelerate System Cutover
A significant factor influencing the results was the Accelerate transformation program, a major system cutover implemented in February 2025. This transition temporarily disrupted lease activations and funding processes, leading to a reduction in the number of vehicles sold and lower end-of-lease income. Consequently, the Australia Commercial and New Zealand Commercial segments experienced declines in NOI of $4.3 million and $2.5 million respectively.
The system cutover also contributed to increased operating expenses, which rose by $1.2 million, largely due to higher employee costs associated with managing the transition. Additionally, bad and doubtful debts increased by $1.5 million, reflecting higher provisions related to delayed invoicing and arrears, particularly in the Australian and New Zealand commercial segments.
Balance Sheet and Funding Position
FleetPartners’ balance sheet shows an increase in borrowings by $15 million to $1.69 billion, driven by short-term funding needs arising from the system cutover. The company drew $75 million against its corporate debt facilities to manage liquidity during this period, with expectations that these requirements will unwind over the remainder of the financial year. The Group maintains undrawn debt facilities of $494 million, providing a buffer for ongoing operations and growth.
Inventory levels rose slightly due to timing differences in vehicle returns and sales, while finance and operating leases increased, reflecting portfolio growth despite the operational challenges. Cash and cash equivalents decreased by $19.7 million, again linked to transitional funding demands.
Dividend Policy and Shareholder Considerations
The Board has elected not to declare an interim dividend for this half-year, continuing a cautious approach amid the ongoing transformation and market uncertainties. However, the company remains committed to its on-market share buy-back program, planning to purchase up to an additional $25.3 million of shares in the second half of FY25, with subsequent cancellation of those shares.
Legal and Regulatory Outlook
FleetPartners disclosed a shareholder class action filed in the Victorian Supreme Court relating to historical financial disclosures from 2017 to 2019. The Group intends to vigorously defend the claim, though the financial impact remains unquantifiable at this stage. Additionally, the company is monitoring the indirect effects of recent US tariff regimes, though no direct impact is anticipated currently.
Overall, the interim financial statements were prepared on a going concern basis and have been independently reviewed by KPMG, who issued an unqualified opinion.
Bottom Line?
FleetPartners navigates short-term system challenges and legal risks while positioning for portfolio growth and operational recovery.
Questions in the middle?
- How quickly will the lease portfolio growth recover post-Accelerate system cutover?
- What is the potential financial impact and timeline of the shareholder class action?
- Will the company reconsider its dividend policy as operational stability returns?