– By Caroline Falls –
Two ASX listed fleet management and salary packaging providers — McMillan Shakespeare and Smartgroup — have followed the growth path of SG Fleet’s strong earnings reported last week, with both showing double-digit revenue and profit increases for the six months ended December 31.
McMillan Shakespeare attributes new contract wins including two NSW health groups for growth in its remuneration services and asset management businesses. Retaining its exclusive contracts with the SA Government and Tasmania Health also helped.
Smartgroup, too, noted retention of clients (including the Department of Defence), and new customers were a boost.
“The company renewed various contracts, expanded the number of salary packages and also won a number of new clients,” Smartgroup Chairman Michael Carapiet said in a statement to the stock exchange.
And both McMillan Shakespeare and Smartgroup commented that their outlook is promising.
McMillan Shakespeare’s CEO Mike Salisbury said in a presentation to investors that the group has a clear strategy for further growth and profitability, including consideration of growing the business through further acquisitions in Australia and the U.K. Its brands include Maxxia, Presidien and RemServe.
He added that the group has a “selective and conservative approach to acquisitions to complement organic growth”.
Smartgroup said its three recent acquisitions — selected assets of Trinity Management Group, Advantage Salary Packaging and Health e-Workforce — had expanded the services it offers and provided it with opportunities to increase its footprint. Trinity assets taken over have been rebadged as Smartequity.
Key figures from McMillan’s first-half of 2016 financial year result report include a 34.4 percent increase in revenue to $243.5 million for the first-half, compared with the same period a year ago. Its EBITDA, or earnings before interest, tax, depreciation and amortization, rose 38.9 percent to $65.8 million. The group posted a 22.2 percent increase in earnings per share to 50.6 percent and declared a 29-cents-per-share fully franked interim dividend, compared with a 25-cent one a year earlier.
Smartgroup’s latest results are for the full year 2015, as its annual reporting period is based on the calendar year ending December 31. Smartgroup posted a 25 percent increase in revenue to $91.8 million and an EBITDA rise of 51 percent to $36.6 million for the year compared with 2014. Its second-half revenue was $47 million, up 23.7 percent compared with $38 million in the same period a year earlier. Second-half EBITDA was up 56.6 percent to $19.1 million. Smartgroup declared a final fully franked dividend of 8.7 cents a share, up from 6.1 cents a year earlier.
