Zigup H1 2026 Earnings Report

Zigup EPS Results

• Actual EPS: GBX 27.60
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Zigup Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Zigup Announcement Details

• Quarter: H1 2026
• Date: 12/3/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, December 3, 2025
• Conference Call Time: 4:30AM ET

ZIGUP (formerly Redde Northgate plc) 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 Company 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 Company'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 approx. 130,000 owned and leased vehicles, supporting over 700,000 managed vehicles, with over 175 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 (LON:ZIG) can be found on the Company’s website: www.zigup.com

Zigup H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: H1 revenue rose 4.5% with a record total fleet of over 135,000 vehicles and standout Spanish rental growth (>16%), and management now expects full‑year Adjusted PBT at or above £155m (top of consensus).
• Positive Sentiment: The UK & Ireland businesses will be streamlined into two brands (Northgate Mobility and FMG) to simplify delivery and supply chains, targeting at least £20m of annualized savings by FY28 with one‑off implementation costs of around £5m, largely complete within ~18 months.
• Positive Sentiment: Steady‑state cash generation is inflecting — steady‑state cash more than doubled to over £48m in H1, fleet assets increased to £1.68bn, leverage remains within the 1–2x range and average borrowing cost is stable at 3.2%, supporting future capital allocation flexibility.
• Positive Sentiment: Value‑added services (eg telematics and fleet management) grew ~20% in the UK and double‑digit overall, supported by technology improvements (eAuction, contact center) that are enhancing used‑vehicle realizations and customer propositions.
• Neutral Sentiment: Disposal profits were lower as expected and claims & services revenue was broadly flat (seasonal softness and NewLaw runoff), while net finance charges rose with higher debt levels; management expects claims & services margins to move toward the medium‑term ~5% target.

Presentation

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Good morning, everyone, and welcome to the ZIGUP half-year results for 2026. Let me start by saying that I'm really pleased to be reporting on a great start to the year, with performance exceeding even our own expectations. It's a very busy time in the business, with lots of positive things happening, and we expect to see this continuing in the second half. So let's cover today's agenda more fully if we can turn to slide two. So just to mix it up a bit, we've changed the format slightly from previous results so that I can give some thoughts on the first half performance and cover our operational and strategic shaping. This includes talking about the evolution of the U.K. and Ireland operating model we'll be putting in place going forward and the benefits that will bring.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

I will then hand over to Rachel Coulson, our new CFO, who recently joined us from Pearson PLC in August, to talk about the financial review and the full-year look-through. Rachel has hit the ground running and has brought genuine curiosity, energy, and pace to the table. She is particularly good at holding people to account and getting things done. Rachel will hopefully give some insight and first impressions on the business, as well as covering in more detail the financial performance. And then to finish, I will give a brief roundup, and then we move to questions and answers. Turning to slide four in the deck now. What great performance. What are the key takeaways for these results? Firstly, the first half has delivered a great result, both operationally and financially.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Revenues were up 4.5%, and the total fleet has grown to over 135,000 vehicles, which is a new high. Spain particularly had a standout performance, growing its rental revenues in double digits and reaching a record level of fleet volume and vehicles on rent. And given the strong economy in Spain, we have been focusing much of our growth CapEx in this territory, which in return is delivering sustainable margins and quality earnings. And this comes alongside robust performance in the rest of the group, with customer and partner demand healthy across the business, notwithstanding the challenges in the U.K. economy. With the current visibility we have on trading, we are confident to signal our full-year expectations being at least at the top end of the current consensus range. And that means at or above GBP 155 million in adjusted PBT for the full year.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

We are also embarking on the next phase of evolving our U.K. and Ireland operating model, which enables us to deliver our product and services in a simpler and more consolidated way, supporting customers with their growth needs from a single point of contact. We have already seen the benefits of growing our platform of services, and now operationally, we will make it simpler to deliver these. The focus of this change in the U.K. and Ireland operating model is efficiency, enhanced customer delivery, and further consolidation across our supply chain, which reduces the number of suppliers we deal with. We expect that the simplification will deliver at least £20 million of annualized savings once fully implemented by FY28, and Rachel will cover the high-level costs to achieve this and the phasing of the benefits.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

It's also worth noting, and we have discussed this before, that we are reaching an inflection point in our steady-state cash. So with continued EBITDA progression, normalized fleet replacement CapEx, lower disposal volumes, and expected stability in both new vehicle costs and residual values, we will see steady-state cash flow building out as planned. So if we turn to slide five, I can showcase some of the operational progress in the first half. So starting with the fleet, we are at our highest-ever total fleet with over 135,000 vehicles. And the change in this period has been driven by Spain growing its average VOH of vehicles on hire by 11%. And if you look back three years, Spain has grown its fleet by 30% while keeping its utilization and margins consistently strong. And the rental market in Spain is growing.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

More broadly, across the group, rental demand has been growing in areas such as Infrastructure, with significant fleet orders received and yet to be fulfilled. For example, we secured a sizable order from the largest Spanish Rail Maintenance operator due for delivery from February 2026. We also had a large order from the Irish rail equivalent, which will support our growth in Ireland. And in the U.K., a large utility company has added over 1,500 of its owned and rented vehicles onto our fleet management solution, as well as placing orders for new vehicles demonstrating the benefits of our platform. In all of scale, eight different fleet operators have signed contracts on an aggregate of 1,250 new vehicles, reflecting the strength of our offering.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

And in the U.K., to give you a flavor of these industries, we've had an additional 300 vehicles supporting fiber rollout to a customer who we have worked with for over 18 years, to over 100 vehicles each for a water utility, a housing association, and a rail engineering contractor. That's just to give you a sense of where we're seeing that demand. And what we see as being a disciplined use of capital is that in the U.K. and Ireland, rental revenue and profit grew against a modest decline in vehicles on hire, principally due to the selective focus on customer channels and margin. And to be specific, historically, Northgate found incremental income from older vehicles coming to the end of their rental life through shorter-term final rental via third-party broker channels.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Given we have now de-fleeted many of our older vehicles, there's less stock available for these channels, and we have focused available short-term fleet into higher margin opportunities, and a good example of this is a recent contract with a fleet partner to provide Royal Mail with nearly 300 vehicles on a short-term basis over their busy period, but at the right margin. In Spain, the double-digit fleet growth we are seeing comes with a need for capacity growth, and we opened up two new service points in the first half. There are plans for more to come matched to growth, and also, we are planning a second delivery hub in Barcelona to replicate the success we saw from the Madrid hub.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

In the U.K. and Ireland, we have continued to refresh and relocate locations for both Northgate branches and FMG RS body shops, expanding capacity in each instance into better modern well-equipped sites that can support future growth. This is also part of our program to increase productivity from our physical estate using new equipment and increasing use of technology which supports capacity. So to round up on this slide, we were pleased to secure and now onboard Howden Insurance, who are a well-respected and international insurance broker. We look forward to working alongside them as they continue to grow their presence. Examples of other extensions to mention include Tesco Insurance, where we renewed our multi-service contract over a long-term period.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

We have secured a recovery service contract with an insurer who has a significant presence in the U.K., but this is against the backdrop of only having a limited historical relationship. We hope to see this develop over time. Across our Mobility Solutions, there's a lot of activity and a great deal to be confident about. If we look at slide six, I want to touch briefly on some of the more strategic initiatives we have been progressing. We're doing a stack of work to support our strategic plans. Here are some examples of some projects we are currently working on just to add a bit of color. In Spain, I briefly mentioned, Barcelona is due to get its own delivery hub in the next 12 months as we look to repeat the success and earnings from the Madrid launch this spring.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Having this capability has greatly sped up the delivery and distribution of new vehicles to customers, which in turn supports a faster rental growth. In the U.K., both Blakedale and FridgeXpress have expanded from single-site locations to providing national coverage by leveraging the Northgate branch network. This has enabled a more compelling proposition to national customers who have local requirements. Blakedale, which you know is our highways traffic specialists, has also brought on its thousandth vehicle onto the fleet, more than doubling in size, which has been a success story from the moment we acquired the business, and FridgeXpress, our temperature-controlled vehicle specialist, is a similar-sized business and on the same path.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Having this specialist capability has allowed us to expand our range of vehicles to include arborists vehicles and cherry pickers to help satisfy a broader need from customers looking for us to be the one-touch solution for their fleet. In the U.K. and within our body shops, we have been growing flexible capacity by expanding our network of mobile repair technicians and also aligning them directly with a local body shop which flexes capacity. This provides another layer of customer options, which adds to the speed and efficiency of getting vehicles repaired smarter and is a real winner with our partners who like the benefits this brings. We're also developing a number of specialist centers which can undertake full structural aluminum work, which will be a growing requirement of a modernizing car park. This investment allows us to internalize this work, which was previously outsourced.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Just to complete this slide, touching on our technology progress, which to date has been supported by an expanded capacity recovery operations center in Huddersfield and the commencement of our new Contact Center System, which is being rolled out across the centers in the U.K. In Spain, the new eAuction site for selling used vehicles has maximized the sales values being achieved through increased functionality and analytics. In all, we are making good progress in this area. If we turn to slide seven, here we are looking at the reasons for making the changes to the U.K. and Ireland operator model, which is shaped to how we see our markets evolving. Firstly, to step through the journey, in early 2024, we brought the U.K. and Irish businesses under a single management structure, which aligned our approach and vision to delivering our platform services from a single source.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Secondly, we have continuously worked on creating the cross-sell of services to all our customers and partners, which was made easier under the single management team. We have seen good evidence of this working, and there is much more to go for. And thirdly, we are delivering on a full refresh of the technology infrastructure that now enables all our businesses to communicate and connect with each other, which has facilitated a joined-up approach. So these three things taken collectively provide a simpler trading environment, slicker customer engagement, and pooling of skilled resources, which leads to efficiency gains and the ability to consolidate supply chains further. The primary focus of the changes is simplification and efficiency. The financial benefits of these changes are estimated to be around GBP 20 million. And as I said, Rachel will cover the high-level financial phasing on this.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Turning to the last slide in this section and continuing with the changes to the U.K. and Ireland model, so this is slide eight. This is what it looks like in terms of operating in the U.K. and Ireland. In essence, it's bringing together our core rental offerings into one entity, which will be our Northgate Mobility brand. Similarly, for our Repair, Direct Claims, and Recovery Businesses, these will consolidate into FMG. Two very distinct operating businesses in the U.K. and Ireland, the Northgate Mobility and FMG. Spain stays exactly as it is. As we roll out the changes, Northgate Mobility, just to be clear, will be the brand for our rental activities. This means LCVs, the vans, yeah, our specialist vehicles and the replacement cars we provide as part of the not-at-fault insurance-related services. These will all be provided through Northgate Mobility.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

The businesses under the FMG brand are the services contracted directly with insurance companies and the wider automotive market in terms of managing their at-fault or direct claims and incident management services, including the roadside recovery businesses and our RS body shops, which provide the repair facilities. We will simplify the number of sub-brands we operate under, which is a natural evolution of our one-road program of providing a single point of contact for our customers. These changes deliver a clear path to simplifying and maximizing our resources and assets for best returns. And I'm pleased to see that the strategic pillars of enable, deliver, and grow are providing the right framework to evolve our plans to achieve the full potential of the business. So thank you for listening and hopefully absorbing most of that, and I'll hand you over to Rachel.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Thanks, Martin. Morning, everyone.I'm really pleased to be here presenting my first set of ZIGUP results alongside Martin, especially as there are many positive updates to share with you today. Before we get into the financials, I thought I'd offer some initial impressions now that I've been in role since August. Since joining ZIGUP, I've had the opportunity to visit many parts of the business and speak with customer-facing colleagues. I've been impressed by the depth of expertise, commitment, and commerciality across the business. I can also see how the unique combination of assets across ZIGUP are focused on delivering outstanding customer service, and it's clear there's an opportunity for technology to be an increasingly valuable tool as we evolve to address customer needs in an efficient and responsive way.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

From my previous experiences, I know transformation comes in many forms, but pace and energy are critical for success, and I think we're sharing evidence of that at ZIGUP today. I've kept many of the familiar slides in place for these interim results, but I would expect as we evolve the business, there will be changes over time. Overall, I view these as being a strong set of results, which will set us up well for the full year. Underlying revenue increased 4.5%. Underlying EBIT, excluding disposal profits, grew by 11.5% to just over £81 million, supported by growth in each of our major business units. Disposal profits normalized as expected. We continue to invest to drive sustainable growth in the business by expanding and refreshing the fleet. This is demonstrated in the growth of fleet assets on the balance sheet to £1.68 billion.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

This was delivered whilst keeping leverage within the range previously outlined of one to two times. Underlying EBITDA, a key component of steady state cash and something we'll come back to later, grew by 7.6% to GBP 246 million. And today, we're proposing an interim dividend of GBP 0.088, following our policy of paying 50% of the prior year final dividend. Let's move to the key elements of sales performance. U.K. and Ireland rental revenue increased in the half year by 6.5%, driven by carefully managed pricing actions, vehicle mix, and a near 20% growth in value-added services such as Telematics and Fleet Management. This was a strong result given average vehicle on hire in the half year was slightly down through our changing approach to the broker channel, targeting higher margin opportunities.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

There continues to be underlying incremental demand for the fleet, with significant new orders, as Martin said, across our larger fleet customers. The Spanish team delivered an excellent revenue performance of over 16% growth. This was partly due to the positive ongoing market conditions in Spain, both at a macroeconomic level and in the continuing shift from ownership to rental, but was also due to healthy demand for our unique market offering. Claims and services revenue was broadly flat year on year due to lower claims volumes. We continue to grow and renew our long-term contracts and expect these to contribute in the busier second half of the year. So how has that translated into profit? Rental profit has grown GBP nine million, driven by trading performance and margin improvement. The latter focused on continued cost control whilst covering investment in the fleet and our network to service our customer needs.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Spain is in line with our 17.5%-19.5% view on margins and typically has a slightly stronger first half. Phasing into the first half associated with one customer contract benefited U.K. and Ireland margin by approximately 1%, but I would expect this will normalize for the full year in line with our 15%-16% medium-term guidance. Overall, disposal profits, which as you know are difficult to forecast, reduced year on year as expected. Claims and services saw a modest profit improvement of around GBP one million due to continued efficiencies across the cost base. These were partially offset by the impact of NewLaw as it manages through its claims runoff program. Given trading expectations and the actions underway on NewLaw, I expect H2 margins will be much closer to our medium-term guidance of 5%.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Net finance charges increased due to higher debt funding levels than in the prior period. Coming in as CFO, I've been impressed by the financial discipline across the business and clear decision-making processes underpinned by the long-standing capital allocation policy. Next, you'll see our familiar cash flow slide reordered into our priorities. EBITDA is growing and net replacement CapEx was broadly as we expected. The outcome of these together was a more than doubling of our steady state cash flow to over GBP 48 million. Growth CapEx in the period increased and was focused on capitalizing on the strong Spanish market environment, including supporting some large minimum-term contract wins. As you can see, fleet age is now at a comfortable level in both geographies, offering greater flexibility and a less pressing need to exit aging vehicles than over the past 18 months.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

As an example, in the U.K., average disposal age in the period was 53 months, down from 56 months a year ago. Our usual table shows a robust balance sheet with substantial fleet assets, which grew by GBP 170 million since year-end. We have significant headroom at GBP 340 million and given the high proportion of fixed-rate debt, our borrowing costs are also stable at 3.2%. And with the refinancing completed last year, we are very well set up with an average maturity profile in the 2030s and no principal facilities due over the next 18 months. Alongside this table is the CapEx chart used at the full year, but looking at the past four years in six-month periods.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

It helps to visually demonstrate one of the key takeaways from today being our view that we believe we are reaching the inflection point in steady state cash that both Philip and Richard had talked about before. Now, as promised, building on the exciting news on the U.K. and Ireland operating model that we announced this morning but have been working on over the past few months. Martin outlined the evolution and its rationale, purpose, and core structural elements. I'm therefore going to confine myself to talking about the overall program in terms of timetable and our initial view of the financial impact. This program is now moving at pace with clear execution plans and a timetable expected to be largely complete within the next 18 months.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

In the statement this morning, we indicated that our current view is that these changes would deliver around GBP 20 million of incremental savings in financial year 2028. We're at the early stages of execution, but to give you some sense of scale, I'd expect the supply chain actions to be the largest portion of the expected savings. And to note, both myself and our head of procurement have experience in this area and at this sort of scale, including building more strategic supplier relationships. I'm sure there's interest in the one-time costs associated with this program, and I wouldn't expect them to be much more than GBP 5 million in total and to not have an impact on the profit guidance for this financial year shared today.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

And as a rough guide for financial year 2027, I could see us achieving around half the savings run rate in the year and a little more than half of the program costs, as some of these will be more front-end loaded. I'll set out more clearly at our full year results how the savings should be phased and reflected alongside our go-forward guidance. Finally, this exercise will no doubt have some impact on the corporate reporting of the businesses, but that's not something that we'll implement this year. And I promise Ross and I will give you clarity in the coming months about what might change and at the appropriate point, some historic analysis. And to finish off, I'd like to cover current year expectations.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Based on the factors we laid out earlier on first half performance and what we see in the second half, we are confident that full year underlying profit before tax will be at least at the top end of the current range of expectations of GBP 150 million-GBP 155 million. While we're still working through the U.K. budget news, there should be no impact on this year's financials or medium-term guidance, including the incremental savings shared today. With that, I'll hand back to Martin.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Thank you, Rachel, and thanks for sharing your insights as well in terms of what you've seen in the business. We clearly have a great opportunity ahead of us. I think that was very clear, by the way, that presentation, so I appreciate that.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

And to finish then on the last slide and before we move to questions and answers, I said earlier it has been a great start to the year with some notable highlights. Demand from customers and partners in our markets is healthy, and there are good reasons to be confident in the continued success of our strategy and to delivering our full year results, as Rachel said, and I said earlier, at the top end of the current consensus. We're also doing the work that we're doing in the U.K. and Ireland will deliver significant benefits, not only to our bottom line, but it'll also offer greater agility in how we approach both suppliers and customers and create further velocity in our business. And as I said, Spain is continuing to grow its market position very well with excellent execution of its plans.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

And finally, Rachel has outlined how we see our steady state cash flow building from here, and I know many of our investors and potential investors will welcome that confidence. For me, the growth in steady state cash generation will bring into play a range of options as we think about capital allocation and how we can make good use of that capital to grow. It is an exciting time to be part of ZIGUP, and we are working at pace to create some velocity in the business and to deliver meaningful and sustainable outcomes for our stakeholders. My thanks to all our colleagues who make this possible. Thank you. So on that note, if we can move to Q&A, that would be great. The microphone's going to David. If you could just say your name before, for the online, thanks.

[David Brockton, Analyst at Deutsche Numis]

Sure. Thanks. It's David Brockton from Deutsche Numis.

[David Brockton, Analyst at Deutsche Numis]

Can i ask two, please. The first one in respect of the U.K. and Ireland fleet growth from here, and the second one in respect of, I guess, replacement CapEx in the average age of the fleet. You sort of gave clearly the reasons for why VOH was down through the first half and that focus on higher margin customers. Going forwards, can you maybe just touch on the supply dynamic in the U.K. now and your expectations around fleet growth from here? That's the first question. And then the second question, the average age of the fleet has continued to trend down through the first half. I know you're not managing the business to an average age, but should we now view that as a sort of a stable level going forwards and therefore that replacement CapEx having stabilized?

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Yes. Thanks, David.So look, on the first question on the U.K. and Ireland sort of fleet growth, I mean, you're right to say we have focused very much on the quality of earnings. That's been the key. In these results, you've seen revenue grow, profit grow 14% of the EBITDA disposals, but the fleet modestly come off. And that's a deliberate sort of position for us. I talked about in my presentation, I talked about the channels that we previously supported where we are less supportive sort of going forward. Our aim is to grow, but grow profitably. That's the key thing I want to emphasize. It's not about pure volume.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

I think I've said before in our conversations in the past and presentations, Northgate as a rental company for Fleet can put a lot of volume on, but it's got to be at the right margin for the right returns with quality, sustainable outcomes. So that's how we're strategically focused in the U.K. to do that. We're seeing that in Spain. You can see that sort of demonstrable growth with the margins have been improving. If you look back over the years, you can see the strength of that coming through. And that's the plan for the U.K. and Ireland as well. So as I say, we'll allocate the capital where we see good sustainable returns. On the second part of the question on terms of the age, so yes, the age is coming down nicely. We don't target age in the way that we run the business.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

We don't say there's a landing point and therefore build a model to that age. It is where we are operating now with the fleet is in a good place. Customers don't want to change vehicles every two years because every time you change a vehicle, it comes with a new price point, of course, for the customer as well. So we're comfortable operating with the fleet where it's at. I mean, it will change a little bit. So the age might get a little bit lower, but we're not targeting it. The key thing is that we've got a fleet now which is in a good steady state position. And we'll know by the end of this financial year whether that's now fully inflected and represents sort of where we are.

[David Brockton, Analyst at Deutsche Numis]

Thanks.

[James Rose, Vice President and Equity Research Analyst at Barclays]

Thank you. Hi, it's James Rose from Barclays. I've got two, please. First is to Rachel.

[James Rose, Vice President and Equity Research Analyst at Barclays]

When you sort of came in and scrutinised the business, did you see any areas for reinvestment opportunities which you wanted to prioritise? And in that case, is that £20 million, is that already a Net figure or is it purely a sort of efficiency cost down figure? And then secondly, could we touch on auxiliary services? I mean, you've mentioned a few times in the statement telematics and fleet management uptake going pretty well. Do you have a percentage of customers which take you up on this? And is that a meaningful sort of upside opportunity for us to think about?

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Okay. Do you want to take the first question?

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Yeah, I will do. Yeah. Thanks, James. So I think we're demonstrating today that we are investing in the business.

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

We've talked about the investments that we're making in growth CapEx, particularly in Spain, given the opportunity that is there, and also Martin mentioned some of the investments that we're making in technology in terms of how we think about rolling efficiency and the opportunities around that area, so I think we are making those investments and the savings that we've talked about today are on top of those investments, so you should think about it in that way.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Thanks, and yes, look, the auxiliary products are growing at double-digit. For us, you've got to view auxiliary as being a sort of the package of services because when you're tying in the auxiliary products with your rental and everything else, that's the platform of services. That's a stickier proposition with a customer.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

So we are building, so it's double digit growth, as I say, on the auxiliary sort of side of things, but we're building a position where we become that one-stop solution for our customers. So that's why the auxiliary products are important about supporting something that's just more than renting a piece of metal.

[James Rose, Vice President and Equity Research Analyst at Barclays]

Okay.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Thanks, James.

[Andy Smith, Analyst at Panmure Liberum]

Yeah, yeah, Andy Smith, Panmure Liberum. Two questions. One on claims and services in that the revenues have gone down and the margin has gone down. Now, I would have thought, given that you had, say, the cyber claim last year at GBP 4.2 million, you would have had a bit more of a kicker this year. So is it possible to explain a bit more dynamics to claims and services as to what's going on with the revenue and the EBIT?

[Andy Smith, Analyst at Panmure Liberum]

I do note that the full year guidance is a 5% margin. And then secondly, on growth CapEx, I see the first half you spent, I'd say, GBP 74 million on growth CapEx. And I know you don't give guidance on it, but is it possible just to give a bit more color on the direction of growth CapEx?

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Okay, Andy. Let me just check, make sure we've got the right numbers because the claims and services margin, EBIT margin's gone up.

[Andy Smith, Analyst at Panmure Liberum]

It's gone up by 4%.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Yeah. So it hasn't gone down. It's gone up. It's gone from 4% to 4.2%. And as we said, and Rachel covered, the direction of travel is we're heading towards a sort of 5%. So that is our direction of travel. So we expect it to improve.

[Andy Smith, Analyst at Panmure Liberum]

But in terms of the revenues as well, in Claims and Services.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Yeah.So we've seen flattish revenues, I would say, in claims and services. And we've had a quieter summer in terms of incoming. So it's only what's incoming into the business. So we would expect, as we've seen over the last couple of weeks, unless you've been somewhere very sunny, it has been raining a lot. So as you go into the winter, these are seasonal. So claims and services is about an incoming volume of work. What I would say in that claims and services section is that we've got new partners coming on board as well. We've renewed some of our sort of long-term big contracts, some of them. And as I said, it's only seasonality in terms of what's in the first half. So summer was fairly quiet.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

So we're confident about that building, and we can see what's coming through and how that's going to play out for the full year.

[Andy Smith, Analyst at Panmure Liberum]

Okay. Thank you.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

And on the second question, Rachel, do you want to answer on the CapEx and the color of the CapEx and what you expect to see?

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Yeah. So hi, Andy. And as you said, I'm not going to give sort of specific guidance, but we will continue to look for opportunities, particularly in supporting the Spanish market and Spanish growth around deploying CapEx to drive growth for the business. I would expect at year-end in terms of if we think about from an overall sort of debt profile that we'd still be around the top end of our range, and we'll ensure that that's the case. But we want to continue to invest in the business where we have the opportunity in Spain.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Okay. Yeah. Just to add to that, just to add to what Rachel's saying, we're going to work within our leverage range of one to two times. That is very clear. So we're not changing that policy. As Rachel has said, the build of the steady-state cash flow, that will release cash in terms of what we can do with that. And therefore, that can support growth both in Spain and the U.K. and Ireland if it's the right investment to make. So that's sort of how the model sort of plays out and how we continue to grow from here. Okay.

[David Farrell, Analyst at Jefferies]

Thanks. Hi, David Farrell from Jefferies. Two questions. Could we just dig into Spain a bit more? I think in the release, you talk about it being 5% penetration of rental. Kind of where do you think that number could go?

[David Farrell, Analyst at Jefferies]

Because it seems like it's grown well beyond kind of what your expectations were. And is there, I guess, any threat that new competitors might come in given the growth being achieved? And then just going back to steady state cash generation, if I remember correctly, we talked about GBP 200 million in 2027. Is that still the ambition? Hope I got that number wrong.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Yeah. I'll deal with point one, and then Rachel can pick up on the trajectory for the steady state cash. So look, so on Spain, you're right, absolutely. There's strong growth there, market penetration. If you remember at the last results, our Spanish CEO came over and presented and talked about the Spanish market in terms of the rental markets growing, and we're growing in that space as well. So we expect to see that to continue to grow. Where could it go?

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

How much capital do we want to put in there to support it? We can see double-digit growth as we've seen this year, and we will continue to support Spain with that growth. There's always competitors. I think what Spain has is a very good model for deploying services. The service points that we've talked about, the Madrid distribution center and the new Barcelona one that we're going to open, it's about having presence on the ground in Spain because customers need that local service to support their fleets. We've got that local service with our workshops, our body shops, repairs, all the maintenance, and that is very, very important in that model. It's quite difficult to replicate because it's quite a lot of infrastructure, quite a lot of sort of technology that we use as well to maximize the benefits to customers.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

So we see short to medium term, we see strong continued growth in Spain. The second question, Rachel?

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Yeah. Hi, David. So for the GBP 200 million we'd shared that it was financial year 2028, as we've talked about earlier, we see that that's evolving as we had expected. We're reaching that inflection point. All of the drivers behind that around EBITDA and the net replacement cycle are playing out as we would expect. And so we're confident in that.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Okay. Do we have any more questions from the room? Anything? Sorry.

[Dan Thornton, Head of Product at Shore Capital]

Really one question.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Do you want to take the microphone and online and then just introduce? Yeah.

[Dan Thornton, Head of Product at Shore Capital]

Sorry. So Dan Thornton at Shore Capital. Just a quick one. So on the steady-state cash generation, it's nearly GBP 50 million for the first half. What factors should we think about for the second half cash generation?

[Dan Thornton, Head of Product at Shore Capital]

So in other words, crudely doubling it probably isn't the right answer. So just a bit of color on the moving parts.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Okay, Dan. Did you pick that question?

[Rachel Coulson, CFO and Executive Director at ZIGUP Plc]

Yeah, I did. Yes. So again, I'm not going to give specific guidance around what people should be thinking about in terms of that. But we would, we expect EBITDA to continue to grow, and we'll manage the net replacement cycle as expected. But as Martin said, we'll reiterate for full year where we've got to around the inflection point.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

Okay. I think we're done with questions. There's nothing more. So it just leaves me to, well, thank you, Rachel, as well. This is your inaugural set of results. Appreciate that. Thanks to my team for all the work and everybody else that supported this. And thanks to you for coming today and everybody online for listening.

[Martin Ward, CEO and Executive Director at ZIGUP Plc]

We look forward to updating you at the full year. Thank you.

Participants

Analysts

• James Rose, Vice President and Equity Research Analyst at Barclays
• Dan Thornton, Head of Product at Shore Capital
• Martin Ward, CEO and Executive Director at ZIGUP Plc
• Andy Smith, Analyst at Panmure Liberum
• Rachel Coulson, CFO and Executive Director at ZIGUP Plc
• David Brockton, Analyst at Deutsche Numis
• David Farrell, Analyst at Jefferies