Zigup Plc (ZIG.L): BCG Matrix [Dec-2025 Updated]

Zigup's portfolio balances high-growth digital and Iberian rental 'stars'-Spain fleet, EV charging and its SaaS mobility platform-against powerhouse UK cash cows like Northgate and Redde that fund aggressive CAPEX and dividends; selective bets on subscriptions and multi‑brand outsourcing require scale and further investment, while legacy workshops and peripheral assets are being de‑risked and divested to free capital for growth-read on to see how management reweights resources to turn market momentum into durable returns.

Zigup Plc (ZIG.L) - BCG Matrix Analysis: Stars

Stars - high-growth, high-share business units that require investment to sustain growth and consolidate leadership. The following sections detail Zigup's Star segments: Northgate Spain (rental fleet), ChargedEV (electric vehicle solutions), and the Integrated Mobility Platform (SaaS).

SPAIN RENTAL FLEET DRIVES HIGH GROWTH: Northgate Spain is a core Star for Zigup, delivering above-market growth and superior margins driven by flexible rental demand among corporates.

Key quantitative performance and investment metrics for Northgate Spain are shown below.

Operational implications and priorities for Northgate Spain:

• Maintain fleet renewal cadence to preserve utilization and margin (CAPEX focus on newer, fuel-efficient vehicles).
• Expand corporate contracts and multi-year agreements to lock in recurring revenue.
• Leverage telematics and predictive maintenance to reduce downtime and OPEX.

ELECTRIC VEHICLE SOLUTIONS ACCELERATE MARKET PENETRATION: ChargedEV is a rapid-growth Star addressing installation and services for commercial fleet electrification across the UK.

ChargedEV performance and capital commitments are summarized below.

Strategic actions recommended for ChargedEV:

• Scale installation capability and regional coverage to convert pipeline demand.
• Invest in interoperability and OCPP-compliant software to integrate with third-party charging networks.
• Offer bundled fleet+charging solutions to capture higher wallet share from enterprise customers.

INTEGRATED MOBILITY PLATFORM CAPTURES ENTERPRISE DEMAND: The SaaS mobility platform is a high-margin Star combining fleet management, analytics and subscription revenue.

Platform metrics, adoption and R&D investment are captured below.

Go-to-market and product priorities for the Integrated Mobility Platform:

• Drive upsell to existing fleet customers (bundle rental + platform) to increase ARPU.
• Prioritize API integrations with ERP and TMS systems used by enterprise clients.
• Accelerate feature development funded by targeted R&D (£15m) to defend against pure-play competitors.

Zigup Plc (ZIG.L) - BCG Matrix Analysis: Cash Cows

UK VAN RENTAL MAINTAINS DOMINANT POSITION

The Northgate UK rental business remains the primary cash generator for Zigup, holding a dominant 30.0% share of the UK flexible light commercial vehicle (LCV) market as of December 2025. This segment contributes approximately 42.0% of total group revenue (GBP 1,260m of GBP 3,000m total revenue in FY2025) while maintaining stable EBIT margins of 12.4% (EBIT GBP 156.2m). Fleet utilization rates have consistently stayed above 90.0% throughout 2025, supporting high asset efficiency; average monthly utilization averaged 91.8% for FY2025. The mature market position allows capital expenditure to be focused on fleet replacement rather than expansion, with FY2025 fleet CAPEX at GBP 110m (net replacement CAPEX 3.7% of revenue). Cash generated from this unit funds core distributions and debt servicing, with estimated free cash flow from Northgate at GBP 120m in FY2025 that contributes materially to the group's GBP 150m annual dividend and scheduled net interest and principal repayments of GBP 48m for the year.

REDDE CLAIMS MANAGEMENT PROVIDES STABLE INCOME

Redde's integrated accident management business processes over 650,000 incidents annually across its platform and accounts for 36.0% of Zigup group revenue (GBP 1,080m of GBP 3,000m in FY2025). Recurring income is driven by long-term insurance contracts and partner fleet arrangements, producing operating margins of 15.8% (operating profit GBP 170.6m). Contract renewal rates are high at 95.0% among major insurance and fleet partners as of late 2025, underpinning revenue visibility. The service-led model has minimal capital intensity; capex allocated to Redde was GBP 8m in FY2025, resulting in a free cash flow conversion rate in excess of 85.0% (estimated free cash flow GBP 145m). The predictable cash generation supports group working capital and funds strategic digital investments to maintain operational efficiency.

MEDIUM TERM CONTRACT HIRE SUSTAINS MARGINS

The medium-term contract hire division serves a stable corporate fleet market with a 15.0% share of the UK corporate fleet sector. This segment generates 8.0% of group revenue (GBP 240m in FY2025) and exhibits low volatility in monthly cash receipts. Operating margins are contracted at 11.0% due to long-term service level agreements and fixed-pricing arrangements, delivering operating profit of GBP 26.4m. CAPEX needs are predictable and aligned to 36-month vehicle replacement cycles; FY2025 replacement CAPEX was GBP 28m. Return on capital employed (ROCE) for this mature segment was a solid 13.0% as of December 2025. The division provides reliable, supporting cash flows that enhance the group's liquidity profile without significant reinvestment demands.

KEY CASH COW CHARACTERISTICS AND GROUP IMPACT

• Aggregate revenue from cash cow segments: GBP 2,580m (86.0% of group revenue).
• Aggregate operating profit from cash cow segments: GBP 353.2m (combined margins weighted average ~13.7%).
• Aggregate capex directed to cash cows in FY2025: GBP 146m (replacement-focused).
• Aggregate estimated free cash flow from cash cows: GBP 385m (supports GBP 150m dividend, GBP 48m debt servicing, and corporate overheads).
• Strategic role: fund dividends, service debt, finance selective M&A and digital transformation while requiring limited incremental growth capital.

Zigup Plc (ZIG.L) - BCG Matrix Analysis: Question Marks

Dogs - business units with low market growth and low relative market share - within Zigup's portfolio currently include nascent or capital-intensive divisions that consume resources without delivering commensurate returns. Two divisions that best fit this profile are the Flexible Vehicle Subscription Services (positioned between Question Marks and Dogs depending on execution) and the Multi Brand Fleet Outsourcing Ventures. Both require clear strategic decisions: divest, harvest, or invest to attempt repositioning into higher-growth categories.

FLEXIBLE VEHICLE SUBSCRIPTION SERVICES SEEK SCALE

Zigup's new flexible vehicle subscription service addresses an 18% annual growth segment but currently holds a modest 3% market share. The service competes against specialized digital startups with strong customer acquisition funnels and product-market fit. In 2025 Zigup allocated GBP 6,000,000 to marketing to accelerate awareness and user acquisition. Revenue growth for the service is 25% year-over-year, yet the division is operating around break-even owing to elevated initial customer acquisition costs (CAC).

Key financial and operational metrics for the Flexible Vehicle Subscription service:

Critical strategic imperatives and levers for this unit:

• Reduce CAC through product-led growth and partnerships to lower the payback period below 9 months.
• Improve retention (reduce churn from 6% to ≤3% monthly) to lift lifetime value (LTV) and ROI above 15%.
• Optimize pricing and packaging to increase ARPU from GBP 120 to GBP 160 within 12 months.
• Targeted regional expansion where digital adoption is highest to grow market share from 3% toward 10% over 3 years.

MULTI BRAND FLEET OUTSOURCING VENTURES

The multi-brand fleet outsourcing division targets a corporate outsourcing market expanding at 10% per year as operators divest fleet ownership. Zigup's current share is approximately 4% in a fragmented market. Revenue contribution to the group stands at 3% but management projects the potential to triple this contribution by 2027 given the planned CAPEX deployment. CAPEX for this division has been authorized at GBP 40,000,000 to secure scale and win large enterprise contracts.

Key financial and operational metrics for the Multi Brand Fleet Outsourcing division:

Key operational challenges and strategic considerations:

• High capital intensity: GBP 40m CAPEX raises balance-sheet leverage and increases fixed-cost exposure.
• Competitive pressure from global leasing giants suppresses pricing power and margins (current 5%).
• Integration and operational scale required to drive margin improvement toward 9-12%.
• Contract concentration risk: large enterprise contracts can skew utilization and cash flow.

Comparative snapshot to guide portfolio decisions:

Zigup Plc (ZIG.L) - BCG Matrix Analysis: Dogs

Dogs

LEGACY INDEPENDENT WORKSHOP OPERATIONS FACE STAGNATION

The legacy independent workshop services represent a declining portion of the portfolio contributing only 2.1% to total revenue (£21.0m of a £1,000m group top line). This segment operates in a mature and fragmented market with an annual market growth rate of 1.2%. Operating margins have compressed to 4.5% due to labor cost inflation (+6.8% year on year) and parts inflation (+5.4% year on year) outpacing price increases (average client pricing growth 2.0%). Return on assets (ROA) for these standalone facilities stands at 1.6%, materially below the group weighted average cost of capital (WACC) of 8.5%. Management has limited capital expenditure (CAPEX) to essential maintenance only, reducing CAPEX from £6.5m in 2023 to £2.0m in 2025 as the strategic focus shifts toward integrated mobility hubs.

NON CORE DISPOSAL ASSETS UNDERPERFORM

Certain non-core peripheral assets acquired through historical mergers now contribute 1.4% to total group turnover (£14.0m of £1,000m). These business lines operate in markets with negative growth rates (-2.0% CAGR), as digital alternatives and platform-based service models displace traditional offerings. Market share for these services has eroded to 1.8% versus local specialists. Operating margin for this cluster fell to 1.8% in fiscal 2025, generating an EBITDA of £0.25m and pre-tax loss after allocation of corporate overheads. Zigup has initiated a structured divestment program targeting disposal proceeds of £10m to redeploy capital into higher-growth mobility and subscription initiatives.

Key operational and financial indicators reinforce Dog classification:

• Combined contribution to revenue: £35.0m (3.5% of group)
• Weighted operating margin (combined): 3.4%
• Weighted ROA (combined): 0.8% versus group WACC 8.5%
• Headcount: ~620 FTEs across both groups with rising unit labor costs (+7.2% YoY)
• Inventory turnover: 3.1x (vs group average 6.8x)

Immediate strategic measures under implementation:

• Divest non-core assets with target proceeds £10.0m and completion window 12-18 months
• Reduce fixed cost base by consolidating 18 workshop sites into regional hubs, expected annualized opex saving £4.2m
• Reallocate retained capital to integrated mobility hubs and subscription services with target IRR >12%
• Exit non-profitable contracts and renegotiate supplier terms to recover 1.2 percentage points of margin within 12 months