FleetPartners Group (FPR) H2 2024 earnings summary

Executive summary

• Achieved record new business writings (NBW) of AUD 924 million, up 21% year-over-year, and record assets under management or financed (AUMOF) up 11% to AUD 2.3 billion.

• 95% of net operating income (NOI) pre end-of-lease (EOL) and provisions is recurring, supporting predictable, annuity-like income.

• NPATA was AUD 87.7 million, down 1% year-over-year, with cash EPS up 9% to AUD 0.365, supported by share buy-backs.

• Cash conversion reached 128%, marking the fifth consecutive year above 100%, with organic cash flow of AUD 116.3 million.

• Announced a AUD 30 million share buy-back for 1H 2025, representing 65% of 2H24 NPATA and bringing total buy-backs since May 2021 to 32% of shares on issue.

Financial highlights

• NOI pre-EOL and provisions was AUD 158.7 million, up 5% year-over-year, with margin at 7.41%.

• EBITDA was AUD 137.3 million, down 1%, and operating expenses rose 6% to AUD 89.2 million.

• End-of-lease income was AUD 70.6 million, down 4%, as used vehicle prices declined but units sold increased 19%.

• EPS was AUD 0.365 (AUD 0.244 normalized), representing 13% growth on last year.

• Portfolio credit quality remains high, with 90+ day arrears at 44bps and 81% of top 20 customer exposure investment grade.

Outlook and guidance

• NBW strength expected to support continued asset and revenue growth in FY 2025.

• End-of-lease income per vehicle to remain elevated but continue normalizing as used vehicle prices revert to pre-COVID levels.

• Provisions to increase as balance sheet funded portfolio grows.

• OPEX to rise with activity and inflation, partially offset by Accelerate program cost savings, with AUD 3 million factored in for FY 2025.

• No Australian corporate tax expected in FY25 due to carried-forward tax losses.