SG Fleet share price rises on FY22 earnings increase

The vehicle fleet management company has also announced a FY22 dividend increase.

| More on:
A handsome smiling man sits in the front seat of an electric vehicle with his hands on the wheel feeling pleased that the Carsales share price is going up and the company will shortly pay its biggest dividend ever

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The SG Fleet share price is pushing higher in Tuesday morning trading
  • The company announced a strong financial performance for FY22
  • However, sourcing vehicle stock is likely to remain a headwind for FY23

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.

What did SG Fleet report?

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.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.
Earnings Results

Which ASX shares delivered the biggest profit jumps of the earnings season?

These companies revealed at least a 70% profit boost in their latest earnings reports.

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Earnings Results

Why this ASX 300 share is leaping 14% despite being branded a 'sell'

Falling profits are putting investors off the fund manager.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Technology Shares

Life360 share price rockets 24% after smashing FY23 earnings expectations

This tech stock delivered a very strong result this morning. How strong was it?

Read more »

a man in a shirt and tie holds his chin in thoughtful contemplation and looks skywards as if thinking about something while a graphic of a road with many ups and downs unfurls behind him.
Earnings Results

What's with the Neuren Pharmaceuticals share price today?

The full market reaction to the Daybue developer's FY23 earnings report won't be seen until tomorrow.

Read more »

Two workers at an oil rig discuss operations.
Earnings Results

2 ASX energy shares going gangbusters on today's earnings results

The ASX energy shares are drawing investor interest today after releasing their half-year earnings results.

Read more »

Man pointing at a blue rising share price graph.
Earnings Results

This ASX 300 stock just jumped 12%! Here's why

The ASX 300 stock is impressing investors with its half-year earnings results.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Earnings Results

Mesoblast share price tumbles on US$32.5m half-year loss

This biotech continues to burn cash.

Read more »

Man and woman sitting at casino table playing poker
Earnings Results

Star Entertainment share price jumps 5% on strengthening outlook

ASX 200 investors are bidding up the Star Entertainment share price on Thursday.

Read more »