Despite experiencing a ”challenging” year, dogged by falling used car prices, fleet management and vehicle outsourcing specialist Zenith saw its performance bolstered by growth in its commercial and corporate divisions.

Reporting its annual results to 31 March 2023, the Leeds-based company revealed that while turnover rose 16.1% in the period to £788.4m (2023: £679m) adjusted gross profit fell to £134.4m, down 8.5% from £147m in the previous year.

During the year the company suffered from uncertainty about the ban on ICE vehicles, including the five-year delay to the 2030 deadline. It saw the average termination profit per vehicle fall by 40% as a result of the dip in used vehicle prices, both for BEV and ICE vehicles. At the same time operating expenses rose £72.4m, up 7.1% on the previous year, driven largely by inflation and investment in staff.

However, the company’s commercial division, which offers fleet management, maintenance, funding, rental and hire solutions to major logistics, supermarket and parcel delivery companies, put in a strong performance, growing its managed fleet by 19.4% over the year, following several new contract wins.

The division also increased its Mobile Service Unit fleet during the year, which provides more flexible support for customers.

The corporate division grew its total fleet year-on-year with a number of new customers, including a full vehicle leasing solution for Briggs Equipment UK’s fleet, supporting both its light commercial vehicles (LCV) and passenger vehicles through company car and salary sacrifice schemes.

Under the company’s transformation programme, Zenith also rolled out its asset management platform to all its commercial customers and is currently completing a similar roll out for its corporate salary sacrifice customers.

During the year the total funded fleet grew 2% to 77,000 vehicles. This includes a 60,000-strong fleet across its corporate and consumer divisions, of which 41% (25,000) are battery electric vehicles (BEV) and 59% (35,000) ICE vehicles.

The company also reported that the corporate and consumer order bank continued to normalise, reaching 6,921 vehicles at the end of March 2024, consisting of 44% (3,000) BEV and 56% (4,000) ICE vehicles. Order lead times remained at 124 days.

Tim Buchan, Zenith chief executive, commented: “This has been an exceptionally challenging year for the automotive sector, with much uncertainty about the ban on ICE vehicles, including the five-year delay to the 2030 deadline.

“I’m proud of the way we are responding to the challenges, finding ways to mitigate the risks and impact on our business. Extending leases within our existing Battery Electric Vehicle (BEV) fleet, launching new products to new markets and ensuring our fleet has a healthy balance of BEVs and ICE vehicles, all help to meet the needs of our customers while driving the success of our own business.

“I’d like to take this opportunity to thank the Zenith team for another successful year. They drive this business forward, ensuring we add value to everything we do. Thank you also to our customers and partners for their ongoing support and confidence in Zenith.”