Zigup PLC (LSE:ZIG) shares surged 12% to 381p this morning after the mobility services group said it now expects full-year underlying profit before tax to come in at least at the top end of analysts’ £150–155 million range.
The update accompanied half-year results showing steady revenue growth and firmer profitability across the business.
Underlying revenue rose 4.5% to £809.9 million, driven by a strong performance in vehicle hire, where Spain delivered 16.3% growth and the UK and Ireland increased 6.5%.
Total revenue edged up 2.9% to £929.6 million, with the difference reflecting a normalisation in vehicle disposal volumes.
EBIT before disposal profits rose 11.5% to £81.7 million, helped by solid rental margins and tight cost control. Underlying EBITDA was up 7.6% at £246 million. Net debt increased to £939 million, mainly due to investment in fleet and growth, with the fleet rising to more than 135,000 vehicles.
Chief executive Martin Ward said the group had made “a great start to the year”, highlighting a standout performance in Spain, positive momentum in UK rental activity and new wins in the claims and services division.
He added that Zigup was “reaching an inflexion point” in cash generation as its fleet replacement programme progresses.
Zigup also set out the next stage of its UK and Ireland restructuring, creating two focused businesses, Northgate Mobility and FMG, aimed at simplifying operations and improving efficiency.
The company expects about £20 million of annualised savings by 2028.
Ward said the group’s strong positions in its core markets, coupled with an increasingly efficient operating model, left it well placed to capitalise on further opportunities.