(Alliance News) - Zigup PLC on Wednesday reported a slump in decline in profit as rising costs offset revenue growth, though it raised its dividend.

The Darlington, England-based company offers a wide range of mobility solutions including vehicle rental and fleet management.

In the year that ended on April 30, statutory pretax profit fell 9.3% to GBP162.1 million from GBP178.7 million the previous year.

Statutory revenue rose 23% to GBP1.83 billion from GBP1.49 billion.

Cost of sales increased 33% to GBP1.40 billion from GBP1.05 billion, while administrative expenses grew 7.3% to GBP229.3 million from GBP213.7 million.

Zigup raised the final dividend 6.1% to 17.5 pence per share from 16.5p, increasing the total dividend 7.5% to 25.8p from 24.0p.

Chief Executive Officer Martin Ward said: "We have stepped up investment in our people and locations over the past year, which will increase our capacity and we have seen continued strong demand for our integrated mobility solutions from existing and new partners, which provides future quality revenues."

Zigup broadened its offering of rental and ancillary services, whilst recent investments leave nine new facilities opened or near completion across the UK, Ireland and Spain.

The company said that demand for its services "remains robust" and that the residual value of light commercial vehicles has performed well. However, Zigup expects values to moderate in the short-term while remaining elevated.

"We are confident that our proposition will continue to offer sustainable returns and that we will benefit from our differentiated position in the market, enabling the business to drive positive growth in underlying revenues, profitability and cashflow," Zigup said.

Zigup shares were up 0.8% to 430.00 pence each in London on Wednesday morning.

By Elijah Dale, Alliance News reporter

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