SG Fleet sees full year profits on the up and up


Organic growth and acquisition contributions get the kudos

SG Fleet sees full year profits on the up and up
SG Fleet is a fan of telematics

 

SG Fleet has reported a 26.9 per cent rise in annual net profits to $59.6 million.

The fleet services and leasing firm says it weathered "some aggressive local competitive tactics" at the turn of the calendar year while gaining from improved performances in its New Zealand and UK arms.

Total revenue for the reported period was $293.2 million, up 38.3 per cent on the previous financial year.

Expenses, excluding those related to acquisitions, increased by 47.1 per cent to $203.2 million, with a significant part of the increase due to the on-balance sheet funding model used by the companies acquired in the UK.

"The mood within our corporate, fleet management business improved and we saw a significant number of opportunities, with some blue chip additions to our customer book," CEO Robbie Blau says if the domestic experience.

"At the same time, we continued to extend our product range, adding services to a number of major customers.

"The split of our Australian presence into distinct corporate and consumer channels, first flagged at the 2016 results, delivered an enhanced focus and optimised processes and this positively influenced the performance of these businesses."

The company reports end-of-lease income down 15 per cent and "fewer heavy commercial vehicles disposed of at a lower average profit, but offset by a greater number of passenger vehicles disposed of at a higher profit".

Chairman Andrew Reitzer notes the market has become more demanding, saying "customers are no longer satisfied with basic fleet management services. Increasing pressures to reduce the cost of operation of large fleets are transforming the industry, and we are exploring and offering all options to better organise our customers’ transport needs".

He sees telematics as the way forward for the company.

"The ability to add further value for our customers by integrating multiple modes of transport is greatly enhanced by a detailed knowledge of the location and condition of transport assets," Reitzer says.

"Telematics devices provide that information, but the true value-add is created by combining and presenting data in a way that allows fleet managers to identify and address inefficiencies."

Major developments during the year included the NSW government contract won at the end of the previous financial year.

That has evolved from the initial product as additional value-add solutions are now being provided to various agencies within the government.

"The expansion of the range of products and services we provide to our government customers mirrors that in the private sector and is clear evidence of a trend towards greater sophistication and value-add in fleet management services, something that plays into SG Fleet’s hands," Blau says.

He also bolstered the telematics message he offered in the half-year results in February.

"Increasing demand for telematics and other technology-based solutions has been a common element across all the geographies in which we operate. The addition of a telematics solution creates a clear uplift in profitability, so we believe that this trend will provide us with healthy additional growth over a long time period."

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