Hidden away from view, at the back of a housing estate in Calverley near Leeds, is an old worsted mill now home to one of the UK’s most dynamic contract hire and leasing companies.
Zenith Provecta is one of the newer breed of leasing providers that sit outside the traditional ownership model of bank, manufacturer or dealer group.
Set up 21 years ago, it has recently renovated its 1860s head office with a clean, contemporary look, symbolising much the way the company has modernised the traditional business of funding fleets.
For business development director Ben Creswick, the key to Zenith’s success comes from a back to basics approach. “Buy, sell and manage the asset as effectively as possible,” he says, simply.
Creswick dismisses the commonly held view that the larger the leasing provider, the greater the discount they are able to secure from the manufacturer.
Online auction sites
“It doesn’t work like that,” he says. “It’s about who the customer is.
The manufacturer will look through the leasing company to the end user and set the discount according to their size.”
So Zenith can buy vehicles as cheaply as anyone else; what about disposals – can it sell as effectively?
The company predominantly uses online auction sites like Autoquake as well as dealers to remarket its vehicles, which it claims enables it to maximise resale values.
Very little goes through the traditional auctions, unless market conditions make them attractive, such as when extended replacement cycles led to supply exceeding demand in the auction hall.
“We target the cars and go through the right channels to reduce our sales stock churn,” says Creswick. “Eighty per cent of our sales go through local trade.”
Zenith’s big differentiator, he claims, is how the vehicle is managed during the term of the contract – this is where the savings can rack up.
The company manages everything in-house, including accident management and maintenance, believing it is more efficient, provides a better service and reduces costs.
Lower accident claims cost
Creswick claims Zenith’s average accident claims costs are £250 lower than those achieved by common accident management platforms.
Every invoice is checked with inconsistent or unusual items queried.
“By challenging items on the invoice that shouldn’t be there, we save 23% of the invoice value,” Creswick says.
“All our maintenance controllers view costs and time via Epyx versus the manufacturers’ suggested pricing. Any differences are challenged.
"It doesn’t take much time to vet every transaction but it does result in big savings.”
At the time of Fleet News’s visit, Zenith has been through a senior management reshuffle.
Andrew Cope has moved into an executive chairman’s role with Tim Buchan appointed chief executive officer.
Former Citroën marketing director Ian Hughes has just joined as commercial director.
The changes coincide with venture capitalist giant Morgan Stanley acquiring a 60% stake in the business, buying out Barclays.
It’s the fourth venture capitalist deal for Zenith over the past seven years, following 3i, Denham and Barclays.
Each time Zenith management prompted the change in ownership as they looked to fulfil an ambition to “move to the next level”, says Creswick.
“Each deal was right at the time to assist the business to achieve its ambitions,” he adds.
The latest move provides “certainty and comfort, and puts us at a different level”, says
Creswick, although he is visibly annoyed at industry speculation that Zenith was previously struggling.
He points out, with some justification, that Morgan Stanley isn’t in the business of taking a punt on a failing company.
The fact that Zenith is continuing in much the same way as before the deal was signed two months ago is another indication that Morgan Stanley is happy with the organisation’s direction and management team.