Vehicle leasing and fleet management service, SG Fleet (SGF), expects to sustain momentum in its core business while pursuing further acquisitions. FY16 results were in line with expectations, being pre-announced with the recent Fleet Hire acquisition.
Citi has decided to upgrade to Buy from Neutral on management’s signals that acquisitions remain very much on the agenda. The FY18 report itself was a "beat", as already established on the day of the release (see Broker Call Report yesterday).
FY17 net profit was marginally above Macquarie’s estimates. No guidance for FY18 was provided although the company indicated it had made a promising start with a strong pipeline of private sector and government business for fleet management.
FY17 profit guidance announced by SG Fleet at its AGM is 8% lower the the broker’s forecast, while still representing 20-25% growth. Commentary pointed to the federal election delaying contract wins and competition increasing in the space.