McMillan Shakespeare Limited (MMS) has reported a strong financial performance for the 2024 financial year (FY24), with substantial growth in key areas despite the prevailing economic challenges. The company has effectively navigated a landscape marked by cost-of-living pressures and higher interest rates, driven largely by its novated leasing offerings and the increasing transition to electric vehicles (EVs). This article delves into the financial highlights of MMS’s FY24 results, focusing on the significant role novated leasing and EVs have played, alongside the benefits of salary packaging as a means of mitigating living costs.
Financial Highlights
MMS reported a notable 11.5% increase in normalised revenue, reaching $525.8 million for FY24, while its normalised underlying net profit after tax and amortisation (UNPATA) soared by 38.2% to $107.6 million. The company’s statutory net profit after tax (NPAT) more than doubled, rising 158.5% to $83.5 million, underscoring its ability to generate value for shareholders despite external pressures.
This performance was significantly bolstered by the continued demand for novated leasing, particularly for EVs. Novated lease sales grew by 23.0% during FY24, with EVs making up 41.0% of all new novated lease sales. This represents a significant increase from the previous year and reflects the growing consumer appetite for low-emission vehicles.
The Rise of Electric Vehicles in Novated Leasing
The transition to electric vehicles has been a pivotal factor in MMS’s recent success. The introduction of the Treasury Laws Amendment (Electric Car Discount) Bill 2022, which exempts EVs from Fringe Benefits Tax (FBT), has provided a significant boost to the adoption of EVs through novated leasing. MMS has capitalised on this, with EVs accounting for 43.2% of new novated lease orders in FY24, more than doubling the figures from the previous year.
MMS’s strategy of supporting Australia’s transition to a low-emission future has not only driven sales but also positioned the company as a leader in the novated leasing market. The company’s innovative approach, including the soft launch of the new brand Oly, aimed at small and medium-sized enterprises (SMEs), further demonstrates its commitment to broadening access to the benefits of novated leasing.
Addressing Cost-of-Living Pressures
In a year where many Australians have faced increased financial strain, MMS’s novated leasing and salary packaging services have provided a valuable avenue for reducing expenses. By allowing employees to pay for vehicles using pre-tax dollars, these services effectively increase disposable income, offering a practical solution to managing the rising cost of living.
Rob De Luca, CEO and Managing Director of MMS, emphasised the importance of this in the company’s strategy: “As many Australians feel the cost-of-living pressures, we’re proud to support our customers maximise their take-home pay through our salary packaging and novated leasing offering.”
The benefits of novated leasing extend beyond just financial savings. For many, the ability to drive a new vehicle with the latest technology, including EVs, while managing their finances more effectively is a compelling proposition. This has made novated leasing an increasingly popular option, particularly as the market for EVs expands with more models becoming available at different price points.
Future Outlook and Strategic Focus
Looking ahead to FY25, MMS remains focused on pursuing organic growth across all segments. The company expects continued increases in vehicle supply and pricing competition, with more EV models entering the market. The expiration of the FBT exemption for plug-in hybrids in April 2025 is also anticipated, which may influence future leasing trends.
MMS is also poised to complete the rollout of its Simply Stronger Program, which aims to enhance customer experience through digital innovation and improved self-service capabilities. This initiative aligns with the company’s broader strategy of excelling in customer service, driving technology-enabled productivity, and broadening its market offerings.
McMillan Shakespeare’s FY24 results highlight the company’s resilience and adaptability in a challenging economic environment. The growing demand for novated leasing, particularly for electric vehicles, has played a crucial role in driving the company’s strong financial performance. With its strategic focus on innovation and customer service, MMS is well-positioned to continue supporting Australians in managing their finances more effectively while contributing to the nation’s transition to a low-carbon future. As the cost-of-living pressures persist, the benefits of novated leasing and salary packaging are likely to become even more attractive, making MMS’s offerings increasingly relevant to the Australian workforce.
