FY 25 Interim results statement

(“ZIGUP” or the “Group” or the “Company”) 

Good group performance, confidence in full year expectations 

ZIGUP (LSE:ZIG), the leading integrated mobility solutions platform providing services across the vehicle  lifecycle, is pleased to announce its results for the half year ended 31 October 2024 (the ‘period’).  

Half Year results Reported Underlying¹ 

¹ excludes vehicle sales revenue, exceptional items, amortisation of acquired intangible assets and  adjustments to underlying depreciation. See GAAP reconciliation on page 4. 

²referring to the net book value of vehicles for hire. 

Martin Ward, CEO of ZIGUP, commented: 

‘Our strategy continues to deliver, and we are well placed with our broadening position in the essential  market for mobility services. We are pleased to report underlying growth in revenues, and the delivery of  PBT in line with expectations, while reflecting normalising disposal profits as previously stated. 

We have seen a good supply of new vehicles coming through since the year end, reducing the fleet age and  strengthening our asset base. Our fleet now exceeds £1.4 billion in value, underscoring our strong market  presence. 

Claims & Services grew underlying revenues, and is entering its busier winter period with a pick-up in activity  seen after an unusual quieter summer period with lower levels of claims made to insurers. Significant  progress has been made in cash collection and establishing more protocols with insurers, improving  processing efficiencies. 

We are also pleased to have secured new, additional long-term funding, which has successfully reduced our  average borrowing costs to 3.2%. This not only enhances our financial strength but also provides substantial  opportunities to support further fleet growth. Our prospects are strong, and our expectations for the full year  are on track.  

With our strategic initiatives yielding positive results and a strong financial footing, we are well-positioned to  continue our growth trajectory and to capitalise on opportunities within the mobility services market.’

Key financial highlights 

• Underlying revenue strong, up 5.6% with growth in both Vehicle hire (+4.7%) and Claims and  Services (+6.3%); total revenue decreased by 0.8% due to lower vehicle sales revenue 

• Underlying PBT of £82.0m (H1 2024: £99.1m) mainly due to lower disposal and Claims and  Services profits; in addition, Reported PBT of £56.2m (H1 2024: £97.4m) includes non-cash  depreciation adjustment of £13.9m cost (H1 2024: £7.6m credit) (see page 14) 

• Vehicle hire revenue: Spain up over 8% supported by VOH growth of 7.4%, UK&I up 1.7% benefitting  from careful pricing actions, while rental VOH down 4.6% reflecting higher defleets in H2 2024 

• Resilient rental margins for both vehicle rental businesses; Spain at 19.3% (H1 2024: 20.8%) and UK&I  at 15.7% (H1 2024: 16.3%) reflecting strong demand and efficiencies supporting high utilisation rates 

• Disposal profits reduced to £25.8m (H1 2024: £34.7m) as expected, from lower sales volumes totalling  17,200 (H1 2024: 18,800) as well as impact from expected normalising of LCV residual values 

• Claims & Services underlying EBIT of £17.6m (H1 2024: £26.3m); reduced volumes in replacement  vehicles and legal services and impact of a cyber incident, in part offset by growth in bodyshop and  fleet management 

• Strong balance sheet with leverage unchanged at 1.6x on prior year, supported by fleet assets of  £1.43bn (H1 2024: £1.23bn) and over £347m of facility headroom after £160m additional loan note  financing 

• Shareholder returns: 6.0% increase in interim dividend to 8.8p; £30m share buyback programme  concluded in June 2024 with £5.3m returned within the period  

• Exceptional cost of £2.8m arising from management of response to cyber incident in May 2024 principally impacting our legal business, NewLaw (see page 12) 

H1 business highlights 

• Fleet growth: Group fleet 132,500 vehicles (128,200 at end-FY 2024); improved supply has enabled  fleet growth along with strong demand including large fleet orders from core customers in UK&I and  Spain; average fleet-ages each reduced by over 2 months vs prior period 

• New wins & strong demand: good rental demand momentum, strongest UK new business wins since  pre-Covid and healthy Spanish environment; significant additional orders for 2025 from existing large  customers plus UK public sector client mandates; new utility partner channels for ChargedEV 

• Supporting cross-sell: ‘One-road’ sales channel simplification, already delivered over 750 new UK&I  rentals from cross-sell referrals; ancillary income growth of 13% 

• Strong operational metrics: Rental utilisation rates remain strong at 91%; protocol partners at c.70%;  improving claims conversion & process efficiencies 

• Customer service & digitalisation: ‘Customer First’ programme delivering record Trustpilot and NPS  scores; scaling up of customer self-service capability within UK portals, additional RPA processes  enhancing productivity; RTA vehicle recovery product growth 

• Growth initiatives: Three new facilities operational in H1 (Dundee, North Barcelona (Parets) and  Cadiz); UK&I car rental product growing interest from corporate clients for rental periods over 1  month; launched micro-mobility rental offering

Outlook  

Recent vehicle supply contracts have provided good visibility for calendar 2025 fleet growth, and  expected increases in infrastructure spending are also positive for our UK rental customer base over the  medium term. Spain continues to enjoy record demand. While the normalisation seen in residual values  will see disposal profits moderate as expected, our confidence in the business, and for our outlook, is  unchanged and remains in line with market expectations. 

Analyst Briefing and Investor Meet presentation 

A hybrid presentation for sell-side analysts and institutional investors will be held at 9.30am today, 4  December 2024. If you are interested in attending, please email Burson Buchanan on [email protected] to request the joining details. This presentation will also be made available  via a link on the Company’s website www.zigup.com.  

The Company will also provide a roadshow presentation via the Investor Meet Company platform on  Monday 9th December 2024 at 3.00pm for institutional and retail investors. Click here to register:  https://www.investormeetcompany.com/zigup-plc/register-investor 

For further information contact:  

Ross Hawley, Head of Investor Relations +44 (0) 1325 467558 

Burson Buchanan 

Chris Lane/Jamie Hooper/Verity Parker +44 (0) 207 466 5000 

Notes to Editors: 

ZIGUP is the leading integrated mobility solutions provider, with a platform providing services across the  vehicle lifecycle to help people keep on the move, smarter. The Group offers mobility solutions to  businesses, fleet operators, insurers, OEMs and other customers across a broad range of areas from vehicle  rental and fleet management to accident management, vehicle repairs, service and maintenance. 

The mobility landscape is changing, becoming ever more connected and ZIGUP uses its knowledge and  expertise to guide customers through the transformation, whether that is more digitally connected  solutions or supporting the transition to lower carbon mobility through providing EVs, charging solutions  and consultancy. 

The Group’s core purpose is to keep its customers mobile, smarter – through meeting their regular mobility  needs or by servicing and supporting them when unforeseen events occur. With our considerable scale and  reach, ZIGUP’s mission is to offer an imaginative, market-leading customer proposition and drive enhanced  returns for shareholders by creating value through sustainable compounding growth. The Group seeks to  achieve this through the delivery of its new strategic framework of Enable, Deliver and Grow. 

ZIGUP supports its customers through a network and diversified fleet of over 130,000 owned and leased  vehicles, supporting over 1 million managed vehicles, with over 180 branches across the UK, Ireland and  Spain and a specialist team of over 7,500 employees. We are a trusted partner to many of the leading  insurance and leasing companies, blue chip corporates and a broad range of businesses across a diverse  range of sectors. Our strength comes not only from our breadth of our award-winning solutions, but from  our extensive network reach, our wealth of experience and continual focus on delivering an exceptional  customer experience. Further information regarding ZIGUP plc can be found on the Company’s website:  www.zigup.com

GAAP reconciliation tables  

Consolidated income statement reconciliation 

Foot notes

Adjustments comprise: 

Group Overview 

Differentiated business model  

Our business model centres on delivering a differentiated product offering for customers who are attracted  to the breadth and scale of services provided through tailored, integrated solutions. We deliver smarter mobility including a broad range of value-added services and increasingly self-service customer analytics.  These support the mobility needs of a diverse and growing range of customers who value our significant  asset base and industry-leading expertise, with customers increasingly on multi-year contracts. 

We acquire vehicles supporting both rental and incident management service solutions, utilising prudent  levels of leverage, well below that of vehicle rental peers. Our owned fleet provides significant asset backing  for our borrowings, with fleet assets of £1.43bn compared to net debt of £782m at the half year. We deploy cash when in a growth phase, investing in tangible assets on which we seek to achieve a return significantly  above our cost of capital, whilst maintaining leverage within our 1-2x target range. 

Our rebrand to ZIGUP plc took place in May 2024, aligned to our new strategic pillars and now with the UK&I  businesses all working under one combined structure. These have helped consolidate the business focus  around activities for customer service excellence and driving growth.  

Market environment 

Rental demand in both Spain and UK&I has remained extremely robust with new UK business at its strongest since pre-Covid. In Spain, both minimum term and flex offerings continue to attract strong interest. This has  been through a combination of market share gains and growing the rental market at the expense of  owned/leased alternatives. The UK budget focused on infrastructure and public sector investment and targets sectors where we have a strong presence.  

Our Claims & Services businesses have entered their traditional higher activity season, after what was a  quieter summer, with lower partner referrals and fluid insurance market dynamics. We have focused on  delivering high levels of customer service, reflected in outstanding Trustpilot and strong NPS scores. With  bodyshop capacity improving, customer repair durations shortened, which also reduced replacement vehicle  hire lengths.  

Vehicle supply dynamics 

Vehicle supply constraints eased very considerably over 2024 with most OEMs now able to offer good  visibility combined with improved support for those with meaningful order volumes in calendar 2025. This  provides greater confidence in fleet growth and management of defleeting in both UK&I and Spain. 

ZIGUP’s scale, financial capacity and breadth of fleet options is a significant advantage in these discussions,  alongside our end-to-end EV capability. This is set to be increasingly important as the UK ZEV mandate starts  to influence OEM production strategies. We continue to monitor both automotive technology developments  and potential regulatory changes to best position ourselves in what is likely to be a significant influence on  both new and used vehicle markets from 2025-26. 

Residual values for LCVs in the UK followed a similar pattern to that of cars in the previous calendar year,  with softening values through the summer and autumn levelling off towards the end of the year. In Spain,  there has been continued strength in used prices which shows only limited signs of moderating. 

With strong rental demand, the constraint on average vehicles on hire has been almost entirely supply-side;  the prior year comparator reflects the higher fleet starting point in April 2023 and the activities over the past  18 months in fleet replacement. With easing vehicle supply we see good potential for fleet growth in FY 2025  combined with further reduction in fleet ages, with the benefits of this principally felt in the reduction in  average service time and cost. 

Strategy progress 

The refreshed strategic framework of Enable, Deliver, Grow launched at the start of the period, reflects the  business focus and ambitions. It has helped to articulate the opportunities identified both within the  business and within our marketplaces. The framework is being used throughout our operations to focus the  competitive advantages that our integrated mobility platform offers, delivering both share growth and  expanding into new markets. Progress within the period includes:  

Enable: Our One Road programme is making a meaningful difference in simplifying customer engagement,  cross-selling and converting into new orders. These are supported by programmes increasing digitalisation  and self-service portals and analytics, delivering smarter solutions such as the EV suitability portal has  encouraged more fleets to assess their potential and delivered new orders.  

Deliver: The Customer First programme has helped focus on the customer experience at individual branch  level with channels for immediate feedback increasingly used and allowing for greater responsiveness.  Investment in our employee proposition and in workshops and bodyshops have delivered greater  efficiencies and grown productivity, improving service responsiveness. 

Grow: We added three new locations in under-represented geographic areas in the period and expanded  our car-focused rental offering in both Spain (B2C) and the UK (Corporate), which together now have 1,350  vehicles on hire through these new channels. ChargedEV has added new referral channels with large utilities  who are becoming a major force in domestic EV charger uptake. 

Supporting sustainability 

The extreme weather and floods in Valencia during November 2024 substantially impacted our Valencia  branch building, but all colleagues were unharmed, and through the immense efforts of our team were able  to return to operational strength within a couple of days and support customers in the major clear-up efforts  now underway. 

Our Drive to Zero programme is supporting a growing number of customers looking to adopt EVs as part of  their fleet strategy. We offer suitability analysis through a new online portal, EV open days and end-to-end  support from fleet planning through to workplace charging installation, resulting in a growth in EVs being  rented, up 75%. Awards recognising our leadership in this area included ‘Sustainability Mobility Solution’  (Spain) and Business Cars ‘Best Eco initiative’ (Northgate UK). 

Within our business we have enhanced our employee value proposition with investment in the breadth of  rewards and benefits, including our third year of awarding free shares to all eligible employees and  broadening our engagement forum programme. We have also commenced work on a double materiality  assessment as part of our CSRD preparedness which will inform our ESG programme focus and reporting. 

Strong financial capacity 

In October, we secured further long-term funding, raising €190m (£160m) through 7 and 10-year loan notes,  fixed at 4.4%. This delivered a 70bp reduction in our drawn debt financing costs. The average funding cost on  our borrowing facilities is now 3.2% and our headroom on committed facilities was £347m at the period end.  

We continue to explore a diverse range of funding options to support our business model, with our target  leverage remaining within our 1-2x range. At the end of October the leverage was 1.6x (H1 2024 1.6x). We  would expect this to rise as we take advantage of improved vehicle supply to both replace and grow capex  across our vehicle fleets given the strength of demand in both UK&I and Spain. 

The Board has declared an interim dividend of 8.8p per share (H1 2024: 8.3p) to be paid on 10 January  2025 to shareholders on the register as at close of business on 13 December 2024. The interim dividend represents 50% of the final dividend for the year ended 30 April 2024 in line with previous guidance. 

Financial review 

Group Revenue and EBIT 

Revenue 

Total Group revenue, including vehicle sales, of £903.6m was 0.8% lower than prior period while revenue  excluding vehicle sales of £775.0m (H1 2024: £733.8m), was 5.6% higher than the prior period. 

Hire revenues increased 4.7% due to VOH growth in Spain and pricing actions in the UK&I. Claims and  services revenue increased by 6.3% reflecting growth in fleet management services and repair services partially offset by lower credit hire volumes and length.  

Group vehicle sales revenue reduced by 27.5% with 1,600 fewer vehicles sold in the period and at an older  age as the fleet is refreshed.  

EBIT 

Statutory EBIT decreased 35.4%, while underlying EBIT of £99.1m reduced by 13.8% compared to the prior  period; reflecting a decrease in disposal profits and lower Claims and services profits. The statutory EBIT  includes a £13.9m cost (H1 2024: £7.6m credit) for adjustments to depreciation rates, £9.2m (H1 2024:  £9.3m) amortisation on acquired intangible assets and £2.8m exceptional administrative expenses (H1  2024: £nil).  

Rental profit decreased 0.8% to £59.1m (H1 2024: £59.6m) including a £0.6m decrease in UK&I Rental. 

Total disposal profits for the period of £25.8m were 25.5% lower than the prior period with 17,200 vehicles  sold (H1 2024: 18,800). This includes 2,700 sales of ex-Auxillis fleet cars and other non-fleet vehicles through  the UK&I Rental sales channels (H1 2024: 4,900). 

³ Calculated as underlying EBIT divided by total revenue (excluding vehicle sales)

UK&I Rental 

Rental revenue rose 1.7% compared to the prior period, with underlying demand strong across all rental  product areas. Lower average VOH at the start of the period through limited LCV supply provided a headwind  but started to ease through the autumn. Revenue growth was achieved through carefully managed pricing  actions together with a focus on maximising availability and ensuring high fleet utilisation.  

The One Road programme to deliver more unified customer relationship management and a simplified sales  process has seen immediate benefits, with over 750 new vehicle rentals from cross-referrals between the  specialist and core product teams. Blakedale and FridgeXpress together saw 11% fleet growth in the period;  and ancillary revenues grew 13% as customers recognised the benefit of our range of value-added services.  

Customer end-markets of infrastructure and public sector saw a number of large orders for completion through  2025 and are set to benefit from the new UK government’s focus on investment announced in the budget.  EVs on hire grew 75% to over 1,650, with a combination of EV open days and online analysis tools allowing  customers to properly understand the opportunity for their particular fleet requirements. Our ChargedEV  business signed partnerships with British Gas and Scottish Power, and with City of Durham to replace their  public charging infrastructure. 

New business enquiries and wins have trended positively and are now at the highest levels for five years, a  combination of market share gains and greater outsourcing by large fleets. A growing number of these have  seen additional services requested as part of the rental order, from vehicle fit-outs (‘semi-cap’) and fleet  management support to EV solutions. 

Rental margin at 15.7% remains in line with our long-term target and reflects the focus on efficiency within the  branches and improving parts supply chains allowing utilisation rates to be kept close to peak operational  levels, at 91% for the period. The Customer First programme and increasing digitalisation has allowed for  greater customer self-service and analysis, including branch-level feedback. 

LCV residual values continued to normalise through the period, reflecting a large tranche of older vehicles  placed on the market, as increased new vehicle supply allowed more owners to refresh their ageing fleets.  Disposal profits of £13.6m were 25% lower than the prior year, reflecting both lower PPUs and reduced  volumes, after the higher defleets in H2 2024. 

⁴Including intersegment revenue of £4.2m (H1 2024: £4.6m) 

⁵ Calculated as underlying EBIT divided by total revenue (excluding vehicle sales)

Rental business 

Vehicle hire revenue in UK&I Rental was £195.6m (H1 2024: £192.3m), an increase of 1.7%. A 6.6% increase  in average revenue per vehicle reflected mix of vehicle, product and hire length as well as applied rate  increases, partially offset by a 4.6% reduction in average VOH. Rental profits were £30.8m compared to  £31.4m in the prior period. 

Average VOH of 43,800 was 2,100 lower than the prior period (H1 2024: 45,900) with closing VOH of 44,600  showing steady growth compared to 43,800 close for FY 2024 with the supply of new vehicles continuing to  filter through in the period. 

UK&I Rental’s minimum term proposition accounted for 41% of average VOH (H1 2024: 41%). The average  term of these contracts is approximately three years, providing both improved visibility of future rental  revenue and earnings, as well as lower transactional costs. 

Management of fleet and vehicle sales 

The closing UK&I Rental fleet was 47,900 compared to 46,600 at 30 April 2024. During the period, 8,100  vehicles were purchased (H1 2024: 4,800 purchased and acquired) and 7,200 vehicles were de-fleeted (H1  2024: 7,200). The leased fleet increased by 400 vehicles. 

The average age of the fleet at the end of the period was c.4 months lower than at 30 April 2024 and c.2  months lower than at 31 October 2023. The fleet composition continues to be monitored in response to VOH  demand as well as easing market supply conditions.  

A total of 10,800 vehicles were sold in UK&I Rental during the period, 7.4% lower than the prior period (H1  2024: 11,600 vehicles) including 2,200 fewer cars and other non-fleet vehicles sold via Van Monster which  had been defleeted from the Claims & Services fleet. Disposal profits of £13.6m (H1 2024: £18.2m) were  25.0% lower than prior period due to a decrease in volumes coupled with a reduction in the underlying LCV  PPU (£1,600 compared to £3,500 in the prior period) reflecting a reduction in residual values which had  been temporarily higher due to market supply restrictions which subsequently started to ease in H2 2024. 

Spain Rental 

Rental revenue growth of 8.6% (up 11% in constant currency) came through increased VOH (up 7.4%), together  with pricing increases reflecting recent cost inflation. Constructive market dynamics continued, with more  customers moving to rental solutions as part of a broader trend to greater outsourcing. Our differentiated  flexible rental offering combined with value-added customer service continues to be very attractive. It allowed us to grow at above market rates, especially in our core LCV product, from a broad range of end market sectors  and a mix of smaller customers and large corporate fleets. 

Vehicle supply continued to improve, helped by the broadening of our OEM supply base over the past 3 years.  This allowed us to achieve strong VOH growth alongside reducing the average fleet age by 2.1 months from the  prior H1 period, and at 28.8 months was 1.3 months lower than at the year end. With improved vehicle supply  we were able to better support our B2C digital offering, where VOH increased over 200%. Our focus on  differentiated value-added products was also reflected in our telematics service with over 14,000 vehicles now  installed, up 40% on the prior period. 

Disposal profits of £12.2m (H1 2024: £16.5m) reflected reduced disposal volumes (11% decrease from H1  2024), as we balanced defleeting with meeting customer demand. PPUs are normalising from their peak in  November 2023 but remain at elevated levels, with used vehicle demand particularly strong for our vehicle  categories. Disposals have predominantly been through our digital eAuctions platform where a fully refreshed  and enhanced platform will be launched in H2 2025. 

Rental margin at 19.3% was slightly lower than the prior period, mainly due to higher depreciation costs from  fleet growth and vehicle renewal. This was mitigated by our continued focus on cost management including  reuse of parts and efficiency programmes. Our Northgate workshops and bodyshops were very busy  throughout the period, with capacity helped by the rapid ramp-up of repair operations at three new branches  to support increased demand, with further capacity planned for H2 2025. Revenues from third party servicing  rose 23% with growth from insurance companies and key corporate accounts. 

The recent floods in Valencia heavily impacted our branch and our customer base in that region. The team  worked tirelessly to restore operational capability in order to support customers with their clean-up  activities and have diverted more resources and replacement vehicles to the region. 

⁶ Calculated as underlying EBIT divided by total revenue (excluding vehicle sales)

Rental business 

Vehicle hire revenue in Spain Rental was £146.8m (H1 2024: £135.2m), an increase of 8.6% (11.1% in local  currency). Average VOH increased 7.4% and closing VOH increased 9.3% to 61,000. 

Spain Rental’s minimum term proposition accounted for 37% (H1 2024: 35%) of average VOH. The average  term of these contracts is approximately three years, providing visibility of future rental revenue and earnings. 

Rental profit increased marginally by 0.7% in the year (3.0% in constant currency) to £28.3m (H1 2024:  £28.1m). This resulted in a rental margin of 19.3%, 1.5ppt lower than the prior period, due to increases in  depreciation as we replace and grow our fleet with vehicles at a higher purchase value as well as higher repair  costs due to lower defleeting activity. 

Management of fleet and vehicle sales 

The closing Spain Rental fleet amounted to 69,600 compared to 65,100 vehicles at 30 April 2024. During the  period 10,700 vehicles were purchased (H1 2024: 9,500) and 6,200 vehicles were de-fleeted (H1 2024: 7,600  vehicles). The average age of the fleet at the end of the period was c.2 months lower than at the same time  last year. This was due to replacement of older vehicles with improved market supply in H2 of FY 2024  continuing into H1 of FY 2025. 

Disposal profits of £12.2m (H1 2024: £16.5m) decreased 26.2% with total vehicle sales of 6,400, 11% lower  than prior period due to lower defleeting activity in order to satisfy VOH growth coupled with a decrease in  LCV PPUs to £1,900 (H1 2024: £2,300) with residual values starting to normalise as new supply becomes  increasingly available.

Claims & Services 

Claims & Services revenue growth of 6.1% was supported by higher repair activity. Vehicle sales were 53.9%  lower, reflecting the significant defleeting which had taken place in H1 2024 as well as lower car residual  values. 1,800 vehicles from the car fleet (H1 2024: 3,600) were transferred to Van Monster for disposal or  use in our corporate rental car proposition. The fleet closed the period at 15,000 vehicles with an average  age of 16 months. 

FMG and FMG Repair Services performed strongly, achieving their operational targets and high NPS and  Trustpilot scores from partners and policyholders. With no major migrations underway, the core focus was  on operational efficiencies and improving customer experience through streamlining our processes, as well  as opening our 67th bodyshop, in Dundee, bringing the business closer to its Scottish customers. 

Reflecting the broader market, Auxillis experienced a quieter summer for partner referrals up to September,  although recent momentum is improving in line with historic seasonal norms. This impacted replacement  hire days which continued to normalise, as repair capacity and parts supply improved allowing for shorter  key-to-key repair durations. Hire days are now at levels we believe will be maintained through the busier winter period. 

In early May we experienced a cyber incident and we immediately isolated our infrastructure in UK & Ireland to contain and eliminate the threat. While the majority of Group businesses experienced limited impact and  rapidly returned to operational capacity, NewLaw was impacted and required significant support before it  could restart processing its case load and Auxillis paused on new business origination for one week. 

Exceptional costs attributable to the incident amounted to £2.8m along with a reduction in EBIT estimated at  £4.2m within Claims & Services profits in the period. The combination of the quieter summer for our higher  margin credit hire operations and impact of the cyber incident were the drivers of the reduction in EBIT  margin for this period to 4.0%, we believe these were principally one-off in nature. 

The business continues to invest in its people and systems to enhance technical capabilities, increasing  automation and other efficiencies across the operations. Our apprentice scheme is scaling up its bodyshop  technician cohort and we have been recognised both for the quality of this scheme and also a number of  individual apprentice and mentor awards at national level.  

⁷Including intersegment revenue of £5.3m (H1 2024: £5.6m) 

⁸Including intersegment revenue of £26.6m (H1 2024: £58.4m) 

⁹ Gross profit margin calculated as underlying gross profit divided by total revenue (excluding vehicle sales). EBIT margin calculated as  underlying EBIT divided by total revenue (excluding vehicle sales)

Additional RPA processes were launched improving our claims processing capacity and after a successful pilot  of the self-service direct hire portal this will now be offered out to more partners. c.50% of bodyshops had  ADAS testing equipment and certification capabilities installed, improving repair productivity, with the  remainder scheduled for H2 2025. 

Revenue and profit 

Revenue for the period (excluding vehicle sales) increased 6.1% to £442.1m (H1 2024: £416.6m) due to  increased volumes in repair services and fleet management services. These favourable variances were offset  by a reduction in credit hire volumes and hire durations in comparison to the prior period.  

Gross margin of 18.0% declined 1.7ppt (H1 2024: 19.7%) due to margin being adversely impacted by the IT  incident. 

EBIT for the period decreased 33.1% to £17.6m (H1 2024: £26.3m) reflecting decreases in credit hire  durations and lower than planned volumes as well as an estimated £4.2m trading impact of the cyber  incident. This has then been partially offset by growth in the FMG RS business due to technician efficiencies  and higher paints and parts margins, as well as marginal increases in FMG due to growth in managed fleet  and external repair volumes.  

Management of fleet  

The total fleet in Claims & Services closed the period at 15,000 vehicles, down from 16,500 at 30 April 2024  with the lower fleet reflecting reduced credit hire lengths and volumes. 

The average fleet age at the end of the period was 17 months compared to 16 months as at 30 April 2024,  reflecting the lower fleet holding period than in the UK&I and Spain rental businesses due to the different  composition of the fleet and usage of those vehicles. 

The Claims & Services fleet operates a hybrid financing approach including ownership, leasing and, during  peak periods, cross-hiring when needed.

Group PBT and EPS 

Profit before taxation 

Underlying profit before taxation was 17.2% lower than prior period reflecting the lower EBIT across the  Group. Statutory PBT was 42.4% lower including £2.8m (H1 2024: £nil) exceptional administrative expenses,  amortisation of acquired intangibles of £9.2m (H1 2024: £9.3m) and a £13.9m cost (H1 2024: £7.6m credit)  relating to adjustments to depreciation rates on certain fleet. 

Exceptional items 

As explained earlier (on page 12), the Group experienced a cyber incident at the start of the period which  was quickly contained. The costs associated with managing the incident of £2.8m have been recognised in  exceptional items in the period.  

Amortisation of acquired intangibles and depreciation rate changes 

Amortisation of acquired intangibles and adjustments to underlying depreciation charges are not  exceptional items as they are recurring. However, these items are excluded from underlying results in order  to provide a better comparison of performance of the Group. The total amortisation of acquired intangibles  charged in the period was £9.2m (H1 2024: £9.3m).  

As previously reported, and in line with the requirements of accounting standards, a decision was made to  reduce depreciation rates from 1 May 2022 on certain vehicles remaining on the fleet which were  purchased before FY 2021. This was due to the prolonged strength of residual values over recent years  which could not have been envisaged at the time that those vehicles were purchased. 

The total adjustment made to underlying depreciation in the period was a cost of £13.9m (H1 2024: £7.6m  credit) comprising £7.6m reduced depreciation (H1 2024: £23.6m) offset by £21.5m reduced disposal profits (H1 2024: £15.9m). As the cohort of fleet which was selected for a rate change is sold, the credit to  depreciation reduces and the adjustment to disposal profits increases. This has resulted in a £21.5m higher  charge to the income statement compared to the prior period. The net adjustment is materially in line with  expectations set out in the FY 2024 Annual Report. 

Interest 

Net finance charges increased to £17.1m (H1 2024: £15.9m) due to higher average debt compared to the  prior period. Interest rates are significantly sheltered due to holding 82.5% of borrowing as fixed rate debt. 

Dividend 

The Board has declared an interim dividend of 8.8p per share (H1 2024: 8.3p) to be paid on 10 January 2025  to shareholders on the register as at close of business on 13 December 2024. 

The interim dividend represents 50% of the final dividend for the year ended 30 April 2024 in line with  previous guidance. 

Share buyback programme 

During the period to 31 October 2024 the Group completed its previously announced £30m share buyback  programme, purchasing 1,271,112 shares for a total consideration of £5.3m (H1 2024: 2,537,500 shares  were purchased for a total consideration of £8.2m). 

Group cash flow 

Steady state cash generation 

Steady state cash generation decreased to £20.3m (H1 2024: £81.4m), with strong underlying EBITDA  partially offset by an increase in net replacement capex as improvements in vehicle supply enabled  replacement of the fleet, reducing average fleet age. 

Working capital and non-cash items 

Working capital and non-cash items reduced by £87.3m to a cash inflow of £38.5m (H1 2024: cash outflow  £48.8m) mainly within Claims & Services. In the prior period, there was a working capital outflow as the  business invested in growth through new contract wins. In the current year cash generation has improved  as more claims have moved under protocol terms, alongside timing of payments at the end of each  reporting period.  

¹⁰ Net replacement capex is total net capex less growth capex. Growth capex represents the cash consumed in order to grow the fleet  or the cash generated if the fleet size is reduced in periods of contraction  

¹¹ Lease principal payments are included so that steady state cash generation includes all maintenance capex irrespective of funding  method 

¹² Lease principal payments are added back to reflect the movement on net debt

Net capital expenditure 

Net capital expenditure increased by £127.6m to £232.4m (H1 2024: £104.8m) due to a £75.4m increase in  net replacement capex¹⁰ and a £52.2m increase in growth capex¹⁰. 

Net replacement capex¹⁰ was £178.9m (H1 2024: £103.5m), £75.4m higher than the prior period resulting in a reduction in fleet age, comprising a £50.4m increase in UK&I, a £32.4m increase in Claims & Services and a  £7.4m reduction in Spain. 

Growth capex¹⁰ of £53.5m (H1 2024: £1.3m) included £65.3m in Spain and £3.8m in UK&I Rental to grow the  fleet size, partially offset by an inflow of £15.6m in Claims & Services where the fleet size was contracted due to reduced credit hire days. 

Lease principal payments of £29.4m (H1 2024: £35.1m) decreased by £5.7m as legacy hire purchase  contracts from acquisitions were run off.  

Free cash flow 

Free cash flow decreased by £13.2m to an outflow of £20.5m (H1 2024: £7.3m outflow). 

Free cash flow is stated after taking account of investments that have been made in the year which will  return future cash flow at a sustainable rate of return ahead of our cost of capital. This includes investment  in net replacement capex of £178.9m, capex lease payments of £29.4m and growth capex of £53.5m.  

Net cash consumed 

Net cash consumed of £35.7m (H1 2024: £17.7m), excluding principal lease payments of £29.4m (H1 2024:  £35.1m), comprises free cash outflow of £20.5m (as above), £39.3m of dividends paid (H1 2024: £37.3m)  and £5.3m (H1 2024: £8.2m) for purchase of treasury shares. Leverage has been maintained at 1.6x (H1  2024: 1.6x). 

Net debt 

Net debt reconciles as follows: 

Closing net debt was £40.3m higher than net debt at 30 April 2024, driven by net cash consumption of  £35.7m and other non-cash items of £15.4m including the recognition of new leases. The foreign exchange  impact on net debt was a £10.8m decrease. The net book value of fleet on the balance sheet at 31 October  2024 was £1.43bn (H1 2024: £1.23bn). 

Borrowing facilities 

As at 31 October 2024 the Group had headroom on facilities of £347m, with £637m drawn (net of  available cash balances) against total facilities of £984m as detailed below: 

In October 2024, the Group raised €190m (£160m) of additional loan notes at an average borrowing  cost of 4.4% with maturities of 7 and 10 years.  

The above drawn amounts reconcile to net debt as follows: 

There are three financial covenants under the Group’s facilities as follows: 

Threshold Oct-24 Headroom Oct-23 

Interest cover 3x 7.4x £113m (EBIT) 9.0x Loan to value 70% 41% £459m (net debt) 44% Debt leverage 3x 1.6x £180m (EBITDA) 1.6x

The covenant calculations have been prepared in accordance with the requirements of the facilities  to which they relate. 

Balance sheet 

Net assets at 31 October 2024 were £1,040.7m (H1 2024: £1,024.9m), equivalent to net assets per  share of 461p (H1 2024: 452p). Net tangible assets at 31 October 2024 were £822.2m (H1 2024:  £789.1m), equivalent to a net tangible asset value of 364p per share (H1 2024: 348p per share).  

Gearing at 31 October 2024 was 95.2% (H1 2024: 95.7%) and ROCE was 12.8% (H1 2024: 14.8%). 

Going concern 

Having considered the Group’s current trading, cash flow generation and debt maturity, the Directors  have concluded that it is appropriate to prepare the Group financial statements on a going concern  basis.  

Risks and uncertainties 

The Board and the Group’s management have clearly defined responsibility for identifying the major  business risks facing the Group and for developing systems to mitigate and manage those risks. 

The principal risks and uncertainties facing the Group at 30 April 2024 were set out in detail on pages  58 to 63 of the FY 2024 Annual Report, a copy of which is available at www.zigup.com, and were  identified as: 

• The world we live in 

• Our markets and customers 

• Fleet availability 

• Our people 

• Regulatory environment 

• Technology and digitalisation 

• Recovery of contract assets 

• Access to capital 

These principal risks have not changed since the last Annual Report and continue to be those that  could impact the Group during the second half of the current financial year.

Alternative performance measures and glossary of terms 

A reconciliation of statutory to underlying Group performance is outlined at the front of this document. A  reconciliation of underlying cash flow measures and additional alternative performance measures used to  assess performance of the Group is shown below. 

¹ Net capital expenditure other than that defined as growth capex 

² Growth capex represents the cash consumed in order to grow the total owned fleet or the cash generated if the owned fleet  size is reduced in periods of contraction 

³Lease principal payments are added back to reflect the movement on net debt

¹ See Note 2 to the financial statements for reconciliation of segment underlying operating profit to Group underlying  operating profit. 

² Revenue: hire of vehicles including intersegment revenue (see Note 2 to the financial statements).

Glossary of terms 

The following defined terms have been used throughout this document:

Condensed consolidated income statement  

for the six months ended 31 October 2024 

Profit for the period is wholly attributable to owners of the Company. All results arise from continuing operations. 

Earnings per share 

Basic 4 19.4p 32.9p 55.2p Diluted 4 18.9p 32.0p 54.0p

Condensed consolidated statement of comprehensive income 

for the six months ended 31 October 2024 

All items will subsequently be reclassified to the consolidated income statement. 

Condensed consolidated balance sheet 

As at 31 October 2024 

Condensed consolidated cash flow statement 

for the six months ended 31 October 2024 

Condensed consolidated statement of changes in equity

for the six months ended 31 October 2024 

Explanatory notes to the interim financial statements 

1. Basis of preparation and accounting policies 

ZIGUP plc is a company incorporated in England and Wales under the Companies Act 2006. 

This condensed consolidated interim financial report for the half-year reporting period ended 31 October 2024 has been prepared  in accordance with the UK-adopted International Accounting Standard 34, ‘Interim Financial Reporting’ and the Disclosure  Guidance and Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority. The interim report does not  include all of the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in  conjunction with the annual report for the year ended 30 April 2024, which has been prepared in accordance with UK-adopted  International Accounting Standards and the requirements of the Companies Act 2006, and any public announcements made by the  Group during the interim reporting period.  

The accounting policies adopted are consistent with those of the previous financial year, except for the estimation of income tax  (see Note 3).  

The condensed financial statements are unaudited and were approved by the Board of Directors on 4 December 2024. The  condensed financial statements have been reviewed by the auditors and the independent review report is set out in this  document. 

The interim financial information for the six months ended 31 October 2024, including comparative financial information, has been  prepared on the basis of the accounting policies set out in the last annual report and accounts. There are no new accounting  standards that have been adopted in the period. 

In preparing the interim financial statements, the significant judgements made by management in applying the Group’s accounting  policies and key sources of estimation uncertainty were the same, in all material respects, as those applied to the consolidated  financial statements for the year ended 30 April 2024. Depreciation charges reflect adjustments made as a result of differences  between expected and actual residual values of used vehicles, taking into account the further directly attributable costs to sell the  vehicles. 

The Directors apply judgement in determining the appropriate method of depreciation (straight line) and are required to estimate  the future residual value of vehicles with due consideration of variables including age, mileage and condition.  

Residual values have increased in recent years due to the well-publicised new vehicle supply constraints increasing demand for our  vehicle assets with values now beginning to normalise. This has increased the level of judgement as it is more difficult to estimate the  future residual value of vehicles at the point they are expected to be sold. Depreciation rates were adjusted in 1 May 2022 with the  adjustment presented outside of underlying results. Depreciation rates will remain under review as the longer term impact on  residual values becomes clearer. 

The expected adjustment for settlement of claims due from insurance companies and self-insuring organisations remains a critical  area of accounting judgement and estimation uncertainty. The approach taken in the period remains consistent with that outlined in the accounting policies for the year ended 30 April 2024. The carrying value of contract assets for claims from insurance  companies at 31 October 2024 was £175,813,000 (30 April 2024: £195,972,000). A 3% difference between the carrying amount of  claims in the balance sheet and the amounts finally settled would lead to a £5.3m charge or credit to the income statement in  subsequent periods. 

Going concern assumption 

The Directors have taken into account the following matters in concluding whether or not it is appropriate to prepare the interim  financial statements on a going concern basis: 

Assessment of prospects 

The Group’s prospects are assessed through its strategic planning process. This process includes an annual review of the ongoing  strategic plan, led by the CEO, together with the involvement of business functions in all territories. The Board engages closely with  executive management throughout this process and challenges delivery of the strategic plan during regular Board meetings. Part of  the Board’s role is to challenge the plan to ensure it is robust and makes due consideration of the appropriate external environment. 

Assessment of going concern 

The strategy and associated principal risks underpin the Group’s three year strategic plan (“Plan”), which is updated annually. This  process considers the current and prospective macro-economic conditions in the countries in which we operate and the competitive  tension that exists within the markets that we trade in. 

The Plan also encompasses the projected cash flows, dividend cover assuming operation of stated policy and headroom against  borrowing facilities and financial covenants under the Group’s facilities throughout the planned period. The Plan makes certain  assumptions about the level of capital recycling likely to occur and therefore considers whether additional financing will be required.  Headroom against the Group’s banking facilities at 31 October 2024 was £347m. This compares to headroom of £244m at 30 April 2024. At the date of signing these unaudited financial statements, all of the Group’s principal borrowing facilities have maturity dates  outside of the period under review, therefore the Group’s facilities provide sufficient headroom to fund the capital expenditure and  working capital requirements for at least 12 months following the date of this report.  

Information extracted from 2024 annual report 

The financial figures for the year ended 30 April 2024, as set out in this report, do not constitute statutory accounts but are derived  from the statutory accounts for that financial year. 

The statutory accounts for the year ended 30 April 2024 were prepared with UK-adopted International Accounting Standards and  the Companies Act 2006 applicable to companies reporting under IFRS and were delivered to the Registrar of Companies on 15 October 2024. The audit report was unqualified, did not draw attention to any matters by way of emphasis and did not include a  statement under Section 498(2) or 498(3) of the Companies Act 2006.

2. Segmental analysis 

Management has determined the operating segments based upon the information provided to the Board of Directors, which is  considered to be the chief operating decision maker. The Group identifies three reportable segments, namely UK&I Rental, Spain  Rental and Claims & Services. The principal activities of these divisions are set out in the Operating review. 

* Underlying EBIT stated before amortisation on acquired intangible assets, adjustments to underlying depreciation charge and  exceptional items is the measure used by the Board of Directors to assess segment performance. Net impairment of trade  receivables is included in underlying EBIT. 

2. Segmental analysis (continued) 

2. Segmental analysis (continued) 

3. Taxation 

The charge for taxation for the six months to 31 October 2024 is based on the estimated effective rate for the year ending 30 April  2025 of 22.7% (31 October 2023: 23.5% and 30 April 2024: 22.9%).

4. Earnings per share 

Six months Six months Year to 

The calculated weighted average number of Ordinary shares for the purpose of basic earnings per share includes a reduction of  20,108,081 shares (31 October 2023: 16,827,313 and 30 April 2024: 19,759,414) relating to treasury shares and includes a reduction of 2,150,897 shares (31 October 2023: 2,522,565 and 30 April 2024: 2,179,823) for shares held in employee trusts. 

5. Dividends 

In the six months to 31 October 2024, a dividend of £39,273,000 was paid (31 October 2023: £37,343,000) for the year ended 30  April 2024. The Directors have declared an interim dividend of 8.8p per share for the six months ended 31 October 2024 (31  October 2023: 8.3p).  

The final dividend of 17.5p in relation to the year ended 30 April 2024 was paid in September 2024. 

6. Intangible assets 

Net book value

At 31 October 2024

Amortisation was included within the income statement as follows:

* Amortisation of intangible assets excluded from underlying operating profit relates to intangible assets recognised on business  combinations.

7. Property, plant and equipment 

Net book value

At 31 October 2024

Included within property, plant and equipment above are right of use assets under leases with a net book value of  £144,775,000 (30 April 2024: £160,384,000).

8. Interest in associates 

9. Analysis of consolidated net debt 

10. Notes to the cash flow statement 

11. Exceptional items 

During the period the Group recognised exceptional items in the income statement as follows: 

Net impairment of trade receivables is included in underlying EBIT. 

The other exceptional administrative expenses were cash costs and are included within operating profit (Note 10). Other exceptional administrative expenses 

In May 2024, the Group was impacted by a cyber incident in part of its UK operation. The Group’s systems were immediately  isolated to contain and eliminate the threat. Most businesses experienced limited impact and rapidly returned to normal  operational capacity with the NewLaw business being affected for the longest period. The costs associated with managing this  incident of £2.8m have been recognised in exceptional items in the period

12. Business combinations 

During the six months to 31 October 2024 there have been no business combinations acquired by ZIGUP plc. Prior period 

In May 2023 the Group acquired 100% of the equity capital of Fridgexpress (UK) Limited for provisional consideration of £5.0m.  The provisional fair value of net assets acquired was £2.9m resulting in the recognition of £2.1m of goodwill. 

No adjustments were required to the fair value of consideration or the fair value of net assets acquired. 

13. Related party transactions 

Related party transactions of the Group are consistent with those disclosed in Note 31 of the Group’s annual financial  statements for the year ended 30 April 2024. No new related party transactions have been entered into during the period. 

Interim announcement – Statement of the Directors 

We confirm that to the best of our knowledge: 

• the condensed set of financial statements has been prepared in accordance with the UK-adopted International  Accounting Standard 34; 
• the interim management report includes a fair review of the information required by DTR 4.2.7 (indication of  important events during the first six months and description of principal risks and uncertainties for the remaining  six months of the year); and 
• the interim management report includes a true and fair review of the information required by DTR 4.2.8 (disclosure  of related party transactions and changes therein). 

By order of the Board 
Philip Vincent 
Chief Financial Officer 

4 December 2024 

Independent review report to ZIGUP plc 

Report on the condensed consolidated interim financial statements 

Our conclusion 

We have reviewed ZIGUP plc’s condensed consolidated interim financial statements (the “interim financial statements”) in  the interim results of ZIGUP plc for the 6 month period ended 31 October 2024 (the “period”). 

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are  not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, ‘Interim  Financial Reporting’ and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom’s Financial  Conduct Authority. 

The interim financial statements comprise: 

• the Condensed consolidated balance sheet as at 31 October 2024; 
• the Condensed consolidated income statement and Condensed consolidated statement of comprehensive income for  the period then ended; 
• the Condensed consolidated cash flow statement for the period then ended; 
• the Condensed consolidated statement of changes in equity for the period then ended; and • the explanatory notes to the interim financial statements. 

The interim financial statements included in the interim results of ZIGUP plc have been prepared in accordance with UK  adopted International Accounting Standard 34, ‘Interim Financial Reporting’ and the Disclosure Guidance and Transparency  Rules sourcebook of the United Kingdom’s Financial Conduct Authority. 

Basis for conclusion 

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, ‘Review of Interim  Financial Information Performed by the Independent Auditor of the Entity’ issued by the Financial Reporting Council for use  in the United Kingdom (“ISRE (UK) 2410”). A review of interim financial information consists of making enquiries, primarily of  persons responsible for financial and accounting matters, and applying analytical and other review procedures. 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK)  and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might  be identified in an audit. Accordingly, we do not express an audit opinion. 

We have read the other information contained in the interim results and considered whether it contains any apparent  misstatements or material inconsistencies with the information in the interim financial statements. 

Conclusions relating to going concern 

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for  conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately  adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going  concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance  with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern. 

Responsibilities for the interim financial statements and the review 

Our responsibilities and those of the directors 

The interim results, including the interim financial statements, is the responsibility of, and has been approved by the  directors. The directors are responsible for preparing the interim results in accordance with the Disclosure Guidance and  Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority. In preparing the interim results,  including the interim financial statements, the directors are responsible for assessing the group’s ability to continue as a  going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting  unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to express a conclusion on the interim financial statements in the interim results based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit  procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been  prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules  sourcebook of the United Kingdom’s Financial Conduct Authority and for no other purpose. We do not, in giving this  conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or  into whose hands it may come save where expressly agreed by our prior consent in writing. 

PricewaterhouseCoopers LLP 

Chartered Accountants 

Newcastle upon Tyne 

4 December 2024