FleetPartners Faces NBW Challenges but Boosts Dividends and Acquires Remunerator

Steady Performance Despite Headwinds

FleetPartners Group Limited (ASX, FPR) has delivered a resilient financial performance for the fiscal year ended September 2025, navigating subdued business confidence and operational challenges. While new business wins (NBW) fell 16% compared to the prior corresponding period, the company managed to grow its assets under management (AUMOF) by 2%, underscoring the defensive nature of its fleet management and leasing business model.

The company’s core income, a key indicator of recurring revenue, rose 6% to $169 million, supported by stable margins and growth in average AUMOF. Notably, NPATA pre end-of-lease (EOL) income increased by 9%, reflecting disciplined expense management and operational efficiency despite a 14% decline in EOL income due to lower vehicle disposals and softer used vehicle prices.

Strategic Acquisition Enhances Novated Leasing

In a significant strategic move, FleetPartners announced the acquisition of Remunerator, a seasoned salary packaging and novated lease provider. This acquisition broadens FleetPartners’ market reach and product offering, particularly in the novated leasing sector, which continues to show strong growth potential. The deal, valued at an upfront $31.4 million with additional contingent payments, is expected to be EPS accretive pre-synergies and will be funded through existing cash and debt facilities.

Remunerator brings a robust customer base with long-term relationships and proprietary systems, enhancing FleetPartners’ competitiveness and channel diversification. This aligns with the company’s focus on expanding omnichannel distribution and digital capabilities to capture underpenetrated markets.

Capital Management and Shareholder Returns

FleetPartners has transitioned from an on-market share buy-back program to a dividend-focused capital return strategy. The Board declared a final unfranked dividend of 13.6 cents per share, representing 65% of 2H25 NPATA and implying an attractive annualised yield of 8.9%. This marks a shift towards sustainable shareholder returns while maintaining flexibility for future capital deployment.

The company ended FY25 with a net cash position of $28 million, reversing a net debt position earlier in the year. Strong organic cash flow generation of $93 million and disciplined funding management underpin this healthy balance sheet, supported by diversified funding sources including warehouse facilities and asset-backed securitisations.

Outlook and Market Dynamics

Looking ahead to FY26, FleetPartners anticipates ongoing challenges in NBW due to macroeconomic uncertainties and seasonal factors. However, the company expects core income growth to broadly track average AUMOF expansion, with stable core margins as prior year headwinds dissipate. The transition to electric vehicles (EVs) remains a key growth driver, particularly in the novated leasing segment where uptake is strongest.

FleetPartners plans to continue investing in digital platforms, telematics, and data partnerships to enhance customer experience and operational efficiency. Management remains focused on cost discipline, targeting operating expenses of $95–96 million in FY26, while maintaining strong cash generation to support consistent shareholder distributions.