Why Did FleetPartners’ Revenue Rise While Profit Took a Hit in FY25?

Financial Performance Overview

FleetPartners Group Limited has released its audited financial results for the year ended 30 September 2025, revealing a mixed performance. The company recorded a 3.2% increase in revenue to $786.2 million, driven by growth in its fleet leasing portfolio, particularly within the novated leasing segment. However, net profit after tax (NPAT) declined by 3.3% to $75.3 million, reflecting increased operating expenses and credit provisions.

Underlying earnings before tax, excluding amortisation and one-off items (NPATA), also fell by 4.1% to $84.1 million. Earnings per share rose slightly to 33.6 cents, supported by a reduction in the number of shares outstanding following the company’s share buy-back program.

Accelerate Program and Operational Highlights

The company completed its Accelerate business transformation program during the year, consolidating multiple operating systems and brands onto a single platform. This initiative has delivered annualised operating expense savings exceeding $6 million, at a total capitalised cost of $31.5 million. Despite some operational disruptions related to the system migration, these have now been resolved, allowing the company to focus on customer service and growth.

FleetPartners’ lease portfolio expanded, with notable growth in novated leases, partly driven by increased demand for electric vehicles (EVs). The company highlighted the impact of government incentives, such as the Fringe Benefits Tax exemption for battery electric vehicles, which supports this segment's growth. However, the provision for bad and doubtful debts increased due to administrative arrears linked to the system migration and challenging economic conditions in New Zealand.

Financial Position and Capital Management

FleetPartners maintained a strong liquidity position with unrestricted cash reserves of $102.9 million and $65 million in undrawn corporate debt facilities as at 30 September 2025. The Group’s borrowings increased to $1.82 billion, reflecting growth in lease financing, supported by a diversified funding platform including warehouse and asset-backed securitisation facilities.

The company refinanced its bank loans during the year, extending maturities and increasing facility limits to support future growth. The Group also reported a net tangible asset backing per share increase to 73.7 cents, up from 60.0 cents the prior year, reflecting improved balance sheet strength.

Risks and Legal Matters

Key risks identified by the Board include the accurate setting of vehicle residual values, funding availability and costs, credit risk management, and regulatory changes. The company continues to actively manage these risks through dedicated teams and governance frameworks.

FleetPartners is defending a shareholder class action filed in the Victorian Supreme Court relating to alleged misleading disclosures in prior years. The financial impact of this litigation remains uncertain.

Executive Remuneration and Governance

Executive remuneration remains closely aligned with company performance. The FY25 short-term incentive awards were granted as performance rights subject to continued employment and performance hurdles. The Board approved a 4% increase in CEO fixed remuneration and a 6% increase for the CFO, reflecting market benchmarking.

Looking ahead, the FY26 remuneration framework will introduce a cash component to the STI awards and maintain EPS growth and return on assets as key long-term incentive metrics, with an added outperformance opportunity.