• Net Revenue Growth: Increased by 6.6%.
• NPAT: Reduced by 9.8% versus PCP.
• Corporate Deliveries Growth: Increased by 12%.
• Novated Order Growth: Increased by 15.4%.
• Novated Delivery Growth: Increased by 7.5%.
• Lite Fleet Reduction: Decreased by 5.6%.
• Net Mobility Services Revenue Growth: Increased by 20%.
• Net Additional Products and Services Income Growth: Increased by 12.3%.
• Finance Commission Growth: Increased by 25.7%.
• Average Disposal Profit per Vehicle: Reduced by 27.2% versus PCP.
• Operating Expenses Growth: Increased by 11.7%.
• Cash Generation: Strong at 105.5%.

• Warning! GuruFocus has detected 8 Warning Signs with ASX:SGF.

Release Date: February 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SG Fleet Group Ltd (ASX:SGF) reported continued growth in delivery volumes, driving a 6.6% increase in net revenue.
• The company successfully maintained strong delivery numbers in Australia, New Zealand, and the UK, with new business opportunities emerging.
• SG Fleet Group Ltd's innovation drive is yielding positive results, boosting revenue through new mobility products.
• The novated channel saw strong interest, with 70% of new orders being low-emission vehicles, supporting growth in this segment.
• Customer satisfaction measures improved, aided by faster vehicle delivery and reduced order cancellations.

Negative Points

• Used vehicle values continued to soften, impacting the average end-of-lease disposal profit.
• Operating expenses increased by 11.7% due to higher project spend and headcount related to the LeasePlan migration.
• Net rental and finance income decreased by 19.2% due to higher interest costs and fewer vehicles in extensions.
• NPAT reduced by 9.8% compared to the previous corresponding period, partly due to higher interest costs.
• The lite fleet reduced by 5.6% due to strategic decisions to exit certain low-margin customers and convert unfunded to funded customers.

Q & A Highlights

Q: Did SG Fleet experience a slowdown in vehicle orders during the half-year, similar to industry trends? A: Robert Blau, CEO, stated that SG Fleet did not see a slowdown in orders. The company benefited from a significant number of customer wins over the past periods, leading to a larger pool to attract orders from. There was strong demand for plug-in hybrids before incentives ended and continued interest in electric and hybrid vehicles.

Q: Is the novated leasing market continuing to grow, and how does low-emission vehicle demand impact yields? A: Robert Blau confirmed that the novated leasing market is growing as more corporates are attracted to the product. Low-emission vehicles, being more expensive, drive higher yields for SG Fleet.

Q: What are the demand trends in the corporate fleet sector, and how is SG Fleet responding? A: Robert Blau noted that demand for outsourced fleet management is robust, with new customer opportunities and a strong interest in SG Fleet's products. The company is not seeing a slowdown in demand and is actively engaging with both existing and new customers.

Q: How is the brand mix within the novated leasing segment evolving, particularly regarding Tesla's market share? A: Robert Blau mentioned that while Tesla remains a significant part of the novated sales, there has been growth in hybrids and plug-in hybrids, diversifying the mix. Tesla's market share has slowed, with brands like BYD gaining traction.

Q: Is there a risk to EV incentives with the upcoming federal election, and how might this impact SG Fleet? A: Robert Blau expressed that there is no immediate risk to EV incentives from a potential change in government. He hopes for a balanced approach to car park policies, including hybrids, but does not anticipate significant policy shifts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.