Smartgroup has reported strong financial results for the first half of 2025, with growth across novated leasing, fleet management, and salary packaging driving a 12% rise in net profit after tax and amortisation (NPATA) to $38.1 million.
Novated Leasing Growth
Novated leasing continues to underpin Smartgroup’s business performance. At 30 June 2025, the company had 80,000 novated leases under management, an increase of 15,400 on the prior corresponding period (up 24%).
New lease vehicle orders grew 19% year-on-year, while settlements increased 8%. Leasing yield remained resilient, dipping only 1% compared to the first half of 2024.
CEO Scott Wharton described the performance as “consistent delivery,” noting that Smartgroup had grown customer numbers to record levels across salary packaging, novated leasing and fleet.
Fleet Management Expansion
Fleet management also recorded steady growth. Smartgroup now manages 32,400 vehicles, up 1,800 from the same time last year (a 6% increase). The company has also expanded a balance-sheet-funded fleet pilot to around 830 vehicles for 50 clients, signalling its intent to deepen its role in this segment.
EV Uptake and FBT Exemption
The standout trend continues to be electric vehicle adoption through novated leasing. In the first half of 2025, EVs accounted for 48% of all new car orders, with battery electric vehicles (BEVs) representing 36% and plug-in hybrid EVs (PHEVs) 12%.
The Federal Government’s Electric Car Discount Policy—which exempts eligible BEVs and low-emission vehicles from fringe benefits tax (FBT)—has been a key driver of this demand. While the exemption ended for PHEVs on 31 March 2025, prompting a surge in demand early in the year, Smartgroup noted that reduced PHEV orders have been offset by increased BEV uptake.
For employers and employees, the FBT exemption has made novated leasing a cost-effective way to adopt EVs, boosting demand and, in turn, driving profitability for Smartgroup and other providers in the sector. With EVs now representing nearly half of new car lease orders, the policy continues to reshape fleet purchasing behaviour.
Financial Performance
Revenue rose 7% to $159.1 million, supported by strong leasing demand and new client wins. Operating EBITDA increased 13% to $63.6 million, with an improved margin of 40%. Operating cash flow was particularly strong, up 43% to $52.5 million, equating to 138% of NPATA.
The Board declared an interim dividend of 19.5 cents per share, up 11% on the prior year.
Outlook
Smartgroup expects demand for novated leasing to remain strong, with July vehicle orders and settlements in line with the previous year. With EV availability expanding and average delivery times stabilising at around 39 days, the company is well positioned to continue capitalising on demand.
Looking further ahead, Smartgroup has set a target of achieving mid-40s EBITDA margin by 2027, underpinned by digital investment, efficiency initiatives, and its leadership position in the novated leasing market.
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