In the full year results announcement, McMillan Shakespeare Group (MMS) stated that the Electric Car Discount Bill which exempts certain non-luxury zero and low emissions vehicles from FBT, resulted in elevated inquiry and activity during FY23 from customers seeking an EV, with EVs representing 21.4% of novated orders in June 2023.
Revenue growth was driven by a 13.3% increase in novated lease sales, which were at a record high over the period, an additional 23,300 salary packages. Novated lease sales momentum benefited from ongoing customer and client focus, with total novated lease units rising by 3.6% to a record 73,400. MMS claimed market leader status in both salary packaging and novated leasing as at the financial year..
Whilst some stabilisation in vehicle supply occurred, ongoing constraints and elevated order levels resulted in a continued growth of novated lease orders carry over. Total carry over revenue will benefit future periods as at 30 June 2023 was $32.3m, up from $25.6m as at 30 June 2022.
With select zero and low emissions vehicles exempt from FBT whilst interest rates and cost of living pressures increased through the period, more Australians sought to capitalise on the value proposition of novated leasing an EV.
During FY23 the number of novated lease orders for EVs increased substantially to 12.3% of total order, up from 1.7% in FY22. Inquiry for EVs increased markedly through FY23, with the highest number of orders in a month occurring in June 2023, representing 21.4% of all novated lease orders. The higher average cost of EVs over their internal combustion engine equivalent contributed to an increase in novated NAF and yields in FY23.
Uplift in salary packages was underpinned by the transitioning of new client wins achieved in FY22, including as the sole provider of salary packaging and novated leases to the Victorian Department of Education and Training, as well as through the increased penetration of existing clients.