Accelerate System Cutover Tests FleetPartners’ Resilience and Cash Flow

Resilient Growth Amid Transformation

FleetPartners Group Limited (ASX: FPR) has demonstrated robust financial performance in the first half of fiscal 2025, navigating the challenges posed by its recent Accelerate system cutover. Despite a temporary 17% dip in new business writings (NBW) linked to the technology transition, the company achieved a 6% increase in assets under management or financed (AUMOF) and a notable 13% growth in normalised earnings per share (EPS).

The Accelerate program, a major business transformation initiative, was successfully completed in February 2025. It promises over $6 million in annualised cost savings and enhances FleetPartners’ competitive positioning through streamlined technology, standardised processes, and a unified brand presence. While the system cutover caused short-term operational disruptions, including a two-week blackout period affecting vehicle deliveries and lease order processing, the business has since returned to typical service levels.

Financial Strength and Cash Generation

FleetPartners reported strong organic cash generation of $46 million in 1H25, reflecting a cash conversion rate of 112%. This performance was supported by elevated end-of-lease (EOL) income, which, although down 18% compared to the prior period, remains robust with used vehicle prices stabilising. The company’s net debt temporarily increased to $17 million due to short-term funding requirements related to the Accelerate cutover but is expected to normalise by the end of the fiscal year.

The balance sheet remains solid, with $74 million in undrawn corporate debt facilities providing ample liquidity. The company’s diversified funding platform, including warehouse funding and asset-backed securities, continues to underpin its growth strategy, particularly as it shifts more new business writings toward balance sheet funding to optimise returns.

Growth Opportunities and Market Outlook

Looking ahead, FleetPartners is well positioned to capitalise on growth opportunities in underpenetrated markets such as corporate fleets, small fleets, and novated leasing. The transition to low and zero-emission vehicles (EVs) remains a significant tailwind, with 62% of novated new business writings in 1H25 comprising electric and plug-in hybrid vehicles. Regulatory support and increasing outsourcing trends in fleet management further bolster demand.

Despite subdued economic conditions in New Zealand and temporary operational challenges, FleetPartners expects NBW and EOL income to improve in the second half of FY25 as the effects of the Accelerate cutover dissipate. The company’s focus on digital innovation, omnichannel distribution, and operational excellence aims to sustain its defensive, cash-generative business model while driving shareholder returns through ongoing buy-back programs.