- Novuna Vehicle Solutions, part of Mitsubishi HC Capital UK PLC, generated pre-tax profits of £54.2m in FY21/22, contributing to overall profits of £130m for the Group
- The company’s ambitious decarbonisation strategy resulted in a 173% expansion of its EV fleet and 8% growth in its contract hire fleet
- Novuna is now the fastest growing of the top 10 FN50 providers, consolidating its position as 7th largest leasing company in the UK
10 June 2022: An unwavering commitment to driving the UK’s electric vehicle (EV) transition has resulted in record pre-tax profits for Novuna Vehicle Solutions. The business, a leading provider of vehicle finance and fleet management services in the UK, achieved pre-tax profits of £54.2m in FY21/22.
The strong performance, achieved amidst a decline in vehicle production led by semiconductor microchip shortages, meant Novuna Vehicle Solutions posted the highest percentage growth of the Fleet News FN50 top 10 providers, with a fleet valued at £1.5bn, up 21% year on year, in turn consolidating its position as the 7th largest leasing company in the UK. New customer acquisitions helped the business defy industry trends, with the overall FN10 fleet seeing a 1.9% decline over the year.
The company’s success can be attributed predominantly to increased revenues from an 8% expansion in its contract hire fleet, with the addition of over 6,000 vehicles to its operating fleet of over 98,000 assets. In addition, the business capitalised on strong demand in the used car market, as global supply chain challenges resulted in long delivery times for new vehicles. Gains have also been made from lower bad debt charges, an area that was severely hit in the prior year by the pandemic.
As part of a group-wide commitment to finance sectors of the economy which reduce greenhouse gas emissions, Novuna Vehicle Solutions has invested heavily in a bold decarbonisation strategy, which aims to manage the entire end-to-end decarbonisation transition for fleets and consumers across the UK. The company has made a firm commitment to electrify 100% of its car and small van fleet (3.5 tonnes and under) and 50% of its funded van fleet (vehicles over 3.5 tonnes) by 2030.
Novuna Vehicle Solutions, based in Trowbridge and Newbury delivered annual growth of 12% within the division’s personal leasing offering comprising over 43,000 vehicles. This was driven by Novuna strengthening the proposition of its IT framework, with its online platform providing users with a frictionless end-to-end process thanks to automated underwriting, digital documentation, and e-signature capabilities.
In February, the business underwent a strategic rebrand from Hitachi Capital Vehicle Solutions to become Novuna Vehicle Solutions, following the merger in 2021 of its parent company, making it part of Mitsubishi HC Capital Inc., one of the world's largest and most diversified financial groups.
Jon Lawes, Managing Director at Novuna Vehicle Solutions, said:
“Despite a year of significant market headwinds, we have expanded our operating fleet, defying industry trends. Our growth trajectory correlates with the progression of our key strategic objectives as a business, namely the rollout of our market-leading decarbonisation proposition across all vehicle types, our strategic investment in IT, and our decision to rebrand a longstanding UK business to become a future facing one. In doing so, we have recognised both the market conditions and motorists’ growing desire to switch to an EV.
Novuna’s advocacy for zero-emission vehicles remains a primary driver of future growth and a key tenet of its long-term strategy. The business’s investment in end-to-end decarbonisation solutions for businesses, from vehicle leasing and management to infrastructure and energy storage has resulted in the development of the market's most flexible ultra-low emission vehicle salary sacrifice scheme, which has encouraged thousands more drivers to make the transition to an EV. Alternative fuel vehicles have increased from 11% to 19% across all asset types in the funded customer fleet, with the overall pure EV fleet increasing by 173% year on year.
Jon Lawes continues: "Over the course of the year, we have continued to carve out a reputation as sector leaders in decarbonisation and we are continuing to help drivers, businesses and fleets throughout their journey to electrification. As leading proponents of zero-emission vehicles, we are developing our own proprietary end-to-end decarbonisation solution for fleets of all sizes, and our goal to electrify our entire car and small van fleet by 2030 remains firmly in reach.”
Record Group profits for Mitsubishi HC Capital UK PLC
At Group level, Mitsubishi HC Capital UK PLC recorded a pre-tax profit of £130.0m for the financial year, a 25% increase from £104m the previous year.
The results cap off an extraordinary year for the Group, which completed a successful merger of Mitsubishi UFJ Lease and Finance Company Limited and Hitachi Capital Corporation in 2021, and subsequent rebrand of the respective divisions in February 2022, all while contending with major economic and logistical headwinds.
The Group’s new business volume over the period also rose to record highs, with total volumes of £4.1bn, a 21.6% annual increase from £3.3bn the previous financial year. This uptick helped to boost net earning assets to £6.5bn, up from £5.9bn in 2020/21.
Robert Gordon, CEO of Mitsubishi HC Capital UK PLC, said:
“Our exceptional results with record profits and new business volumes are testament to the strides we have made to meet and exceed customer expectations despite the headwinds of the past 12 months.
“We have continued to invest in our products, our technology and our people. Increasing headcount by 4%, gaining market share in key industry sectors whilst maintaining our high customer satisfaction ratings, we’re consistently providing our customers with an outstanding level of service which is the cornerstone of our business.
“At the same time, we repositioned our business in market, undertaking the largest rebranding exercise in our 40 year history, seamlessly transitioning to our new Novuna trading style, embarking on an exciting new era that resonates with our customers.
“The last twelve months has demonstrated our resilience and our ability to adapt, which combined with a strong equity base, access to global lines of credit, and a focus on portfolio quality, puts us in a strong position to continue to grow and diversify the business, despite the backdrop of uncertainty in the current economic climate.”