Vehicle fleet management and leasing company, FleetPartners Group [ASX:FPR] has posted its highlights for the half year ending 31 March 2023.
The group’s Assets Under Management (AUMOF) had risen by 2% despite supply constraints in key vehicle markets.
FPR opened 2% higher than the previous trading day. However, just before midday, the group’s stock was only 0.5% higher, largely flat and worth $2.07 at the time of writing.
Over the past month, FPR has gained nearly 7% in share value and nearly 4% so far in the year:
Source: TradingView
FleetPartners Group post HY2023 results
FleetPartners Group reported that its AUMOF division had moved up by 2% with $1.9 billion, in comparison with 1H2022, and New Business Writings (NBW) orders hit record levels, up by 1.3 times index to the levels achieved in the HY2019.
This was an indication of underling commercial growth, and buoyed by strong customer demand, the group described this as a proxy for NBW growth in a non-constrained supply environment.
However, such an environment is not reflective of the reality right now, and in real terms, the group saw a 3% decrease in NBW as compared to the same time last year.
Having said that, the group’s NBW order pipeline is at a new record of three times 2019 indexed levels with order growth continuing to exceed NBW deliveries.
End of lease income per vehicle was priced at $7,658 each, elevated on pre-COVID-19 levels, yet vehicle sale numbers dropped by 20% due to delivery delays for replacements.
Net operating income of $108.6 million was down by 19%, primarily due to the delivery delays and the normalisation of maintenance income.
This also resulted in Net Profit After Tax Amortisation (NPATA) dropping by 31%, totalling $42.6 million.
The group’s operating expenses reached $41.5 million, which was in line with the group’s FY23 guidance, and is expected to remain up by 2-3% for the rest of the year.
FleetPartners says it is maintaining a disciplined approach to its cost management processes, especially in the face of ongoing inflationary pressure.
The group achieved strong organic cash generation of $62.0 million, with cash conversion of 141%.
Net cash of $39.4 million has the group eyeing future organic and inorganic opportunities and it lends some confidence to capital management.
The group plans to launch a $43 million share buy-back for the second half of FY2023, including $28 million representing 65% of 1H23 NPATA, being the top end of the Group’s targeted capital payout range.
FleetPartners mused on its outlook:
‘The Group is in a strong position from a financial and strategic perspective, reinforced by the underlying strength of the 1H23 result. The financial position of the Group has never been better, with no net debt providing balance sheet flexibility for future organic and inorganic opportunities as they emerge.
‘The Group plans to continue delivering incremental EPS growth through disciplined capital management, including on-market share buy-backs and investment in strategic opportunities such as Strategic Pathways and Accelerate, that deliver strong returns and sustainable EPS benefits for shareholders.’
Source: FPR
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For Money Morning
