Zigup upbeat for current year despite profit dip

Zigup posted a slide in full-year profits on Wednesday, but insisted there were "good opportunities" ahead.

Revenues at the FTSE 250 group, which provides truck rental and mobility services such as fleet management, were 2.3% higher on an underlying basis in the year to 30 April, at £1.56bn.

Earnings before interest and tax fell 5.5%, however, to £202m, while pre-tax profits were 7.6% weaker at £166.9m.

On a reported basis - which includes vehicle sales revenues, amortisation and one-off items - revenues were down 1.1% at £1.81bn while EBIT slumped 30% to £136.5m.

The firm said vehicle hire revenues rose 5.2% but disposal profits fell 15.2%. Also weighing on underlying pre-tax profits was a reduction in the claims and services margin.

However, Martin Ward, chief executive, said the group had delivered a "strong operational performance, reflecting a year of significant progress in the business, growing market show and benefiting from material improvements in customer service scores".

He continued: "I am delighted with the progress made across the business and it sets us up very well for the coming year.

"Vehicle supply has normalised and the market headwinds of vehicle residual values and replacement hire lengths have been stable since the autumn."

Zigup, which operates across the UK, Ireland and Spain, said it saw "good opportunities" for the current year, with "robust demand" for mobility solutions across markets.

"Our differentiated position and clear strategic framework will enable the business to drive sustainable growth in underlying revenues, profitability and cashflow and deliver attractive shareholder returns."

The firm is forecasting mid to upper singer digit underlying EBIT growth for all operating divisions, before taking into account disposal profits.

Zigup changed its name from Redde Northgate in 2024.