The SG Fleet Group Limited (ASX: SGF) share price is pushing higher this morning amid the company releasing an upbeat earnings report for FY22.
Shares in the vehicle fleet management provider are trading for $2.80 each at the time of writing, a gain of 2.19%. For comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.65% higher.
SG Fleet recorded significant top and bottom line growth across all its operating segments in Australia and overseas.
Let's check the highlights of the company's results.
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What did SG Fleet report?
- Total net revenue up 58% on FY21 to $313 million
- Net profit after tax (NPAT) up 39% on FY21 to $60.7 million
- Underlying earnings per share (EPS) up 12.4% on FY21 to 21.50 cents
- Fully franked final dividend of 6.81 cents a share
- Total FY22 dividend up 20.2% on FY21 to 15.13 cents per share
Revenues and profitability increased following a surge in demand post-COVID. The company's order books are currently backlogged and it's expected to work through them in FY23.
SG Fleet also provided an update on its LeasePlan acquisition, noting that it was "on track," with the company exploring additional avenues to accelerate its incorporation. 58,857 vehicles were added to the company's fleet courtesy of LeasePlan, bringing its total to 145,351 vehicles in FY22.
It also noted an uptick in interest for its electric vehicles and decarbonisation efforts with continued enthusiasm from its clients.
What else happened in FY22?
SG Fleet reported top-line growth in all its operating segments across Australia, New Zealand, the United Kingdom, and corporate. The largest increase was reported in the New Zealand operating segment, with revenues jumping from $13.26 million in FY21 to $122.26 million for an 821.37% boost in FY22.
The growth of the New Zealand operating segment was buoyed by a rebound in demand after COVID-19 and by adding and retaining new corporate and business accounts, particularly with small and medium-sized enterprises.
An increase in bottom line earnings before interest, taxes, depreciation, and amortization (EBITDA) was also consistent across the board. Australian earnings increased 22.93% to $72.39 million in FY22.
What did management say?
SG Fleet Chief Executive Officer Robbie Blau commented on the company's performance in FY22, stating:
All of our businesses have maintained the momentum built up early on in the COVID-19 period. While the Corporate channels have been performing well throughout, we are now also seeing further growth in enquiry levels in the Novated channel. Across all of the Company's geographies, the Corporate and the Novated channels continued to face the challenge of delivering what remained limited supply against a growing order pipeline.
What's next?
Global macro headwinds are expected to batter the company's stock for at least the next twelve months.
SG Fleet stated that a mix of inflation and cost trends "suggest a permanent lift" in the price of used vehicles, which the company relies on for its fleet.
Further headwinds include a difficult supply environment that is not expected to resolve in the next 12 months.
As a result, the delivery of orders is being pushed out. The company cited the war in Ukraine and high demand as causing delays and leading to a significant order backlog.
SG Fleet share price snapshot
The SG Fleet share price is currently up 12% year to date. That's a better performance than the benchmark index which is down 6% over the same period.
At the current share price, SG Fleet has a market capitalisation of around $957 million.
