– By Caroline Falls –
McMillan Shakespeare’s full-year financial report unveiled in August reveals the board suspended a final dividend payment citing the effects of COVID on the business.
It’s a “Cautious approach to pay no final dividend due to uncertainty of COVID-19 impacts, plan to resume dividends in FY21,” are words from CEO Mike Salisbury and CFO Mark Blackburn’s presentation to investors.
The headline underlying profit — after tax and amortisation — reported was $69 million for the year ended June 30. That’s 22 percent lower than a year ago. Underlying earnings per share fell 18.5 percent to 87.4 cents per share. The dividend of 34 cents (paid in March) was all shareholders got for the year, compared with 74 cents a share last year. Revenue for the year was $494 million, down 10 percent on last year.
A chart of activity levels shows everything dropped off in in the final quarter — the COVI|D affected April – June period. Salary packaging, novated sales, retail sales, the UK and NZ operations included, all slumped compared with the previous three quarters.
Among the ups and downs over the 12 month period: novated leases grew 5.6 percent to 71,800, but vehicles in the asset pool fell 12 percent to 39,600, and the value of assets managed fell 10.8 percent to $444 million. An increase in refinanced leases also hurt the yield — dropping to 1 percent in March, compared with an average of 6 percent in the nine months earlier. The fleet asset write-down value slumped to $245 million from $312 million a year ago — its lowest in the five years since becoming a listed company.
The collapse in car sales — 13.9 percent in a year, affected novated leasing performance. But a recovery appeared in May, and in June new car sales picked up thanks to tax incentives and government support for SMEs.
Standing staff down, cutting salaries and extending debt facilities were among some of the measures taken to meet the conditions COVID brought in. McMillan Shakespeare noted Victoria represents approximately 11 percent of the company’s novated leasing activity.
Meanwhile, the company has pushed ahead with its takeover of Plan Partners, completed on July 1 this year. Plan Partners provides reimbursements and payments to some 365,000 customers and providers in the NDIS, or National Disability Insurance Scheme. Plan Partners at June 30 had $669 million in client funds under administration (up from $269 million a year ago). McMillan Shakespeare said Plan Partners is well positioned for customer and earnings growth in FY2021.
— Caroline Falls is a freelance journalist. She can be contacted at carolinefalls@gmail.com.
