Zigup (LSE:ZIG) said trading over the first four months of its financial year has been strong enough to lift its profit outlook, telling shareholders at its Annual General Meeting that adjusted pre-tax profit is now expected at the top of the £163.2m to £170m range of current market expectations.
The London-listed group hires and manages large car and light-vehicle fleets across the UK & Ireland and Spain, earning revenue from vehicle hire, fleet management fees and vehicle disposals.
Average vehicles on hire were more than 5% ahead of the prior year as of the end of August, and the Spanish fleet has grown beyond 80,000 vehicles.
Spain was Zigup's standout market in its last full year, with vehicle hire revenue up 16.2% and rental margins at 19.3%, against 5.2% growth and a 16.0% margin in the UK&I.
Fleet management volumes are benefiting from the recent re-award and expansion of a Motability contract by one of the group's largest insurance partners.
Leverage sits within the group's target range of one to two times, backed by £1.8bn of fleet assets.
"The Board remains confident of the Group's long term growth strategy and prospects," the company said, pointing to increased scale in both geographies and continuing UK&I simplification actions.
Zigup's last full-year results, for the year ended 30 April, showed underlying EBIT excluding disposal profits up 9.7% and steady-state cash generation jumping to £95.7m from £16.7m, with management targeting more than £200m by April 2028.
Interim results for the six months to 31 October are due on 2 December.