The country’s biggest leasing company, funding some 350,000-plus cars and vans, has seen its pre-tax profits plummet, according to its annual accounts.
Lex Autolease, part of the Black Horse Group, reported £153 million in pre-tax profits in 2019, a 27% (£57m) year-on-year decline from the £210m achieved in 2018.
Revenues for the leasing giant, meanwhile, were up £125m (5.4%), from £2.38 billion to £2.5bn over the same period.
It equated to a profit margin of 6.1% - down on the 8.8% it achieved the previous year.
It says in its annual accounts for the year ending December 31, 2019, that the decrease in the company’s profits was “principally driven by decreased revenue” generated from its leased fleet, which had declined by 9% year on year.
This, it explains, was due to the uncertainties around tax legislation having an impact on corporate customers and resulting in fleet downsizing, as well as customers looking towards products such as personal contract purchase (PCP) agreements over traditional contract hire.
Lex Autolease also expects this downward trajectory to continue for the next 12 months due to the impact of Covid-19.
Operating leases account for more than 90% of Lex Autolease’s funded fleet, with the leasing company receiving £1.41bn in rentals in 2019 - £71m less than the previous year. Meanwhile, proceeds from disposals grew more than £192m, from £823m to more than £1.01bn.