edge
This September Zenith Vehicle Contracts won three new contracts to
manage fleets totalling 265 vehicles. The deals bring the total of
Zenith’s fleet, leased or under management, up to around 18,000 and
were achieved only three months after the company completed its
third management buy-out in less than four years.
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Andrew Cope, chief executive, had previously worked with Bramall
Fleet Services and was a co-founder of Zenith back in 1989. He
tells Motor Finance that the company was originally formed to offer
contract hire to professional partnerships and invariably dealt
directly with the company car drivers themselves.
“Arthur Anderson was an early customer for which we funded some 600
vehicles. By 1994 we had grown the fleet to around 1,500 vehicles.
Although contract hire was our principal product we created an
early form of employee car ownership plan,” Cope says.
The company had early backing from several banks and funding for
expansion came from cash flow and profits. Cope insists that the
fact that Zenith was owner-managed was a major contributor to
success. “We are flexible and fast on our feet,” he claims, “and
have no trouble in competing at all levels for the larger fleet
deals.”
Cope was appointed managing director in 1999 and by 2003, with many
of the original board seeking to retire from the company, the first
management buy-out occurred which valued the company at £18m. The
second, some 18 months later, saw the company supported by Dunedin
Capital Partners.
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By GlobalDataThe most recent buy-out, in September 2007, saw the management team
headed by Cope and finance director Mark Phillips being backed by
Barclays Private Equity to the extent of £40m. Royal Bank of
Scotland provided the senior debt and working capital facilities.
The company currently employs some 90 staff at its Leeds head
office.
As a result, the company is on track to make some £5m profit this
year on a turnover of £70m and with a total fleet of just under
19,000 vehicles under management – “mostly with a blue-chip
customer base,” Cope says.
If innovation and flexibility have been a feature of Zenith’s
success then its utilisation of Deltapoint, the online fleet and
residual value management tool, has played a significant
part.
Zenith was the first company to develop a partnership with
Deltapoint, according to Cope. “We tested it in a due diligence
setting several times,” he recalls, “and straightaway it gave us a
significant advantage over the way the car valuation guides read.
It even helped us with our management buy-outs by proving that we
had no horror stories hidden behind our residual value
calculations.
“As an actuarial predictive tool it is unsurpassed and invaluable.
For example, when the market fluctuates it tells us straightaway
what impact the changes will have on our fleet and its value,” he
adds.
Cope says that Zenith’s customers benefit in so far as Deltapoint
offers a far less volatile and more predictable pricing model:
“This means that we can be more competitive.”
Zenith’s team values their independence. Some 50 per cent of staff
are shareholders in the company which utilises an “extremely flat
management structure of only three layers”. Staff earn bonuses
based upon customers’ estimates of the company’s service levels and
employee turnover is low. Cope is optimistic for the future and
confident that the tight teamwork, high service levels and expert
use of technology, such as Deltapoint, will enable the company to
prevail over its larger competitors. “After all,” he points out,
“success does not come from what you do – but rather from the way
that you do it.”
Fleets valued at “click of a button”
Deltapoint is a privately-owned company which was formed in 1999.
It provides the fleet industry with web-based portfolio analysis
tools to manage car and light commercial residual value (RV)
exposures – together with pricing decisions.
Mike Beet, Deltapoint’s sales director explained, “the company’s
products help leasing company clients perform two vital tasks;
managing pricing decisions for business not yet written and
completing current and future valuations of business already
written”
Beet said: “Deltapoint products operate in real time enabling an
entire fleet to be valued at the click of a button with the ability
to drill down to individual vehicle level. Fleet values can then be
examined by model, manufacturer, or by vehicle group thereby
constantly monitoring shifting values.”
He added: “The projected equity position within a fleet can be
easily determined with RV surpluses and shortfalls
highlighted”.
Over the years the company has grown a wide client base, which
includes the majority of the Fleet News FN50 motor lessors as well
as banks and financial institutions.
Commenting upon PointModel, Deltapoint’s pricing tool, Peter
Cakebread, managing director of Marshall Leasing said: “In my
opinion the PointModel software enables the user to carry out RV
reviews in a fraction of the time taken previously. Most
importantly, it enables us to examine our residual database at many
age/mileage points. All too often we have concentrated on a
3yr/60,000 mile residual point – when much of our business is
written at other ages or mileages.”
He added: “A major advantage is the support given by the company
which extends to ideas for improvement and delivering these
rapidly.”
