PUBLICLY listed SG Fleet has reported a small drop in net profit for the first half of the financial year but noted a growth in novated leasing and a higher volume of operating lease disposals.

SG Fleet, now under takeover by Pacific Equity Partners in a $1.4 billion deal, said the first six months of FY2025 showed a net profit after tax of $41.1 million, down from $45.5 million in the same period last year. 

It said that the result was lifted by a higher volume of operating lease disposals – which contributed to increased used vehicle supply – and softening resale values but said it was still holding passenger vehicle prices at 115 per cent of pre-COVID levels. 

SG Fleet CEO Robbie Blau

It also said there was a growth in novated leasing, an increase in funded fleet, and a strategic reduction in non-financed fleet management (Lite Fleet) that were also keys to the results.

SG Fleet’s total net revenue for the six months rose 6.6 per cent to $210.7 million that it said reflected strong delivery volumes, but blamed the fall in net profit on used vehicle values and higher operating expenses.

SG Fleet CEO Robbie Blau said that used vehicle values softened at the beginning of the period but then became “more resilient in the later months.”

“Combined with higher-than-anticipated disposal numbers, this meant that our financial performance for the period exceeded internal forecasts,” he said.

“However, we do expect disposal levels to reduce and used values to trend lower in the second half, bringing us back in line with the guidance provided at the 2024 full-year results announcement.”

In a report to the ASX, he said that continued growth in the company’s total funded fleet was helped by the conversion of some of the unfunded fleet into funded via sale and leaseback arrangements.

“This fleet growth, as well as greater product penetration in the legacy LeaseBook plan, supported net mobility services revenue which increased 20 per cent,” he said.

He said new funded deliveries were also up and finance commissions were up by 25.7 per cent.“In the novated channel, continued strong interest from employers looking to offer vehicle salary packaging as a benefit to their staff allowed SG Fleet to grow its total eligible employee base,” he said.

“Helped by the further improvement in supply, the company was able to deliver vehicles more rapidly, which in turn reduced the number of order cancellations.

“Low-emission vehicles again dominated in the novated channel, accounting for about 70 per cent of demand.

“In summary, a period of good revenue growth and continued progress on which we intend to build further in future years.”

SG Fleet’s majority shareholder, South African company Super Group Ltd, has put its 53.584 per cent stake in SG up for sale, which SG Fleet directors have unanimously approved.

Australian private equity firm Pacific Equity Partners has become the buyer of SG Fleet.