Risk trends
Risk trend
Mitigated Risk
within appetite tolerance
outside of appetite tolerance
Risk trend
Evaluation is defined as management’s assessment of whether the risk factor has:
| Type of risk | Risk | Appetite tolerance | Mitigated risk | Risk level | Change |
|---|---|---|---|---|---|
| Strategic risks | Economic environment | Cautious to open | |  | – Demand for our rental services remains high, above the level of new vehicle supply – Volumes have continued to grow in ZIGUP following recovery from COVID-19 period – Inflationary pressures have been experienced during the year but have been managed against the cost base and through pricing |
| Market risk | Minimal to open | | | – No major customer losses and the customer base continues to be diversified across sectors with no reliance on individual customers of size – The opportunities and services created through further development of our integrated mobilities platform improves the attractiveness of our offering and the retention of customers – We continue to build a platform and relationships that will facilitate the transition to non-ICE vehicles for the Group and its customers | |
| Operational risks | Vehicle supply | Minimal to open | | | – The flexibility in our fleet model has enabled us to age out the fleet during a period of low availability of supply. However, the older age is now reducing the ability to significantly further age the fleet without impacting operational performance or customer service, and may restrict growth opportunities – Supply issues also put pressure on new vehicle inflation but there are indications that the global supply of vehicles will improve going forward – We expect residual values to reduce from the high levels experienced since COVID-19 |
| The employee environment | Averse to open | | | – Improved employee engagement scoring reflects the measures taken to improve communication, training and development of our people. – Widening of benefits including free shares, employee allowances and cost-of-living support has reduced attrition risk – Improved routes to employee markets through further developing in-house recruitment and vacancy filler platform used across the Group | |
| Legal and compliance | Averse | | | – No material changes to laws and regulations – No material changes to contractual obligations – Horizon scanning and planning for future changes to laws and regulations | |
| IT systems | Minimal to open | | | – Continued investment in and integration of IT platforms as the group grows organically and inorganically | |
| Financial risks | Recovery of contract assets | Cautious to open | | | – Cash collection has improved with statutory debtor days in ZIGUP reducing – Insurance environment remains stable in order to facilitate collection of claims |
| Access to capital | Cautious to open | | | – Debt facilities remain adequate for funding Group strategic objectives – One year extension of bank facilities in the year has maintained the maturing profile of debt |