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Element Fleet Management boasts robust Q1 results, eyes growth By Investing.com

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Element Fleet Management (EFN), a leading fleet management company, has reported a strong start to 2024 with record net revenue and a confident outlook for the year ahead. In the first quarter, the company achieved a record net revenue of $262.5 million and an adjusted earnings per share of $0.27.

Element’s strategic initiatives and investments in digitization and automation have positioned it well for continued growth and value creation, as evidenced by the addition of 39 new clients and a 9.8% year-over-year increase in originations.

Key Takeaways

  • Element Fleet Management reported a record net revenue of $262.5 million and adjusted EPS of $0.27 for Q1 2024.
  • The company added 39 new clients, with a significant portion being self-managed conversions.
  • Investments in business growth, service delivery refinement, and digitization are underway.
  • A net promoter score of 48 was achieved, indicating strong customer satisfaction.
  • Element plans to redeem all remaining preferred shares and outstanding convertible debentures soon.
  • The company is optimistic about surpassing the upper end of its full-year guidance for 2024.

Company Outlook

  • Element expects to issue $14.6 million shares from treasury in connection with the redemption of all outstanding convertible debentures in June.
  • The company forecasts low double-digit service revenue growth in each quarter of 2024.
  • A pending tax change, the Working Families Act, could positively impact yields.
  • Investments made are expected to enhance efficiencies and drive growth, with paybacks anticipated later in the year.

Bearish Highlights

  • Non-recurring items that boosted servicing income in Q1 are not expected to affect future revenue or profitability.

Bullish Highlights

  • Strong demand for high-quality assets is anticipated, with syndication yields likely to improve once interest rates stabilize.
  • Margin expansion is expected in the future, with stronger originations forecasted for Q2.
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Misses

  • The company made no mention of specific challenges or misses in this quarter’s earnings call.

Q&A Highlights

  • The company discussed the normalization of OEM production capacity and controlled allocation through 2024.
  • They addressed their strategic initiatives, including leasing, strategic sourcing, and the EV offering, Arc by Element.

Additional Information

  • Element is exploring complementary revenue opportunities, including selling insurance and targeting small to…

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