Vehicle lead times shorten but deliveries are lower than expected, says Leeds-based Zenith

Publishing its unaudited third quarter financial results for the three months ended December 21, 2022, Zenith said that coporate terminations were down 26 per cent year-on-year.

Meanwhile, its order book decreased to 14,300 units, with gradually improving supply, while its order intake was slightly lower in Q3 compared to the prior quarter.

However, turnover grew by £35.6m to £163.9m year-on-year, while gross profit was £37.4m - up 12.8 per cent year-on-year.

The firm said profit growth was driven by high residual value profits, a growing fleet size and increased rental activity.

Zenith revealed that its total fleet size remained at 168,000 vehicles, though the funded fleet, which generally carries higher margins, increased by about 2,500 units to 74,000.

The company also reported a strong balance sheet with cash position of £8.2m and an undrawn credit facility of £65.0m, giving liquidity of £73.2m.

Tim Buchan, chief executive of Zenith, said: “The macro environment continued to be in a state of turmoil, but the group’s strategy of concentrating on long-term and profitable contracts with creditworthy customers continues to deliver predictable and stable earnings against the difficult economic backdrop."

He added: "It was great to see supply chains start to free up following the Covid pandemic, semiconductor shortages, and the impact of the war in Ukraine on manufacturer supply chains.

"Encouragingly, we saw high volumes of deliveries of new vehicles and leases to customers, with record highs in November and December, normally seasonally quiet months.”

Mr Buchan said: “We have a good mix of business across the group. So, while the resale prices of second-hand electric vehicles have been in the news recently, I am reassured by the blend of traditional fuel types that will form the majority of our vehicle disposals over the next two years.

"I am also confident that the BEV (Battery Electric Vehicle) markets will reach equilibrium. This change will be assisted by a growing understanding of the lower costs of maintaining and fuelling electric vehicles, alongside what we hope will be falling electricity prices and much greater investment in charging infrastructure across the UK.”