Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • ZIGUP reports underlying profit before tax down 7.6% to GBP 166.9 million in FY25
  • ZIGUP rental revenue up 5.2% in FY25, led by 9.5% growth in Spain
  • ZIGUP fleet expands to 131,600 vehicles, with UK fleet age significantly reduced

ZIGUP plc (LSE:ZIG), a provider of integrated mobility solutions across the vehicle lifecycle, released its financial results for the year ended 30 April 2025, reporting a decline in profit despite growth in rental revenue and fleet size.

The company’s underlying profit before tax dropped 7.6% year-on-year to GBP166.9 million, driven by a 15.2% decline in disposal profits and reduced contributions from its Claims & Services segment. Reported profit before tax fell further to GBP 101.5 million, impacted by exceptional items and the unwind of previous depreciation adjustments.

Total revenue declined 1.1% to GBP 1.47 billion, although underlying revenue rose by 2.3%, reflecting gains in the rental business. Vehicle hire revenue climbed 5.2%, with growth of 9.5% in Spain due to an increase in vehicles on hire (VOH), while the UK and Ireland (UK&I) region posted a modest 2.0% rise. In the UK&I segment, pricing actions helped offset a decline in VOH during the final quarter.

Claims & Services reported a lower EBIT margin of 4.3%, primarily due to normalising hire durations and the impact of a cyber incident earlier in the year. Meanwhile, rental margins improved in both regions up 1.1 percentage points in Spain to 19.3% and 0.2 points in UK&I to 15.7%.

Disposal profits fell to GBP 52.5 million, down from GBP 61.9 million in FY24, with total sales volumes of 34,500 vehicles, compared to 36,800 the previous year. The decline reflected moderated residual values of light commercial vehicles in the first half of the year, which stabilised in the second half.

The Group’s underlying EBITDA rose 4.1% to GBP 464.5 million, supported by operational gains. Capital expenditure reached £453.4 million, primarily driven by fleet replacement needs. The total fleet expanded to 131,600 vehicles, with significant reductions in average fleet age down 5.5 months in the UK&I region and 2.7 months in Spain enabled by improved vehicle supply.

ZIGUP ended the year with net debt leverage of 1.8x ,underpinned by GBP 1.51 billion in fleet assets and GBP 412 million of available credit headroom following refinancing activities. The board approved a full-year dividend of 26.4p, up 2.3% from 2024.

Operationally, the business secured six new mobility platform partners, expanded its workshop capabilities including ADAS and plastic welding and launched upgraded telematics and asset tracking products. Customer engagement was a focus, with the UK&I business embedding new account management structures and the Spanish unit implementing a new CRM system. Ancillary income rose 9%, partly from cross-sell referrals.

The average age of the company’s technicians dropped from 54 to 41 years since FY23, reflecting investments in talent development. ZIGUP also received the 2025 King's Award for Enterprise for its social mobility initiatives.

Looking ahead to FY26, management expressed confidence in achieving mid-to-upper single-digit EBIT growth at the divisional level, excluding disposal profits. Demand remains stable across both core regions, and the group expects continued progress in customer experience, operational efficiency, and new business growth.

As of 9 July 2025, shares in ZIGUP were trading 8.36% lower at GBX 331.29 per share (at the time of writing).