– By Caroline Falls –
It’s been a good year for Australian Stock Exchange listed fleet-service providers. MacMillan Shakespeare, SG Fleet and Smartgroup all recently posted double-digit profit growth.
MacMillan Shakespeare, which provides fleet asset management, vehicle finance and salary packaging services, reported a 23 percent increase in net profit to $67.5 million for the year ended June 30, compared with the previous year.
Revenue for the group rose 12 percent to $389.6 million, almost half of it from its asset management division, which includes fleet management services such as vehicle purchasing and maintenance management. This division though wasn’t the group’s star performer.
“Our asset management segment delivered a softer result owing to a higher residual value provision, continuing fleet inertia across the market and some credit losses that can be attributed to the slowdown in the mining sector and related services,” said CEO Mike Salisbury in the company’s annual report.
MacMillan Shakespeare has operations in Australia, the UK and New Zealand. Its brands include Maxxia, RemServe and Holden Interleasing. Since the balance date, the group has acquired two more businesses, Presidian and United Financial Services, both providing brokerage and financial services chiefly in the used car market. These two new businesses will help MMS boost earnings in the current financial year, directors said.
SG Fleet, also a provider of novated leasing and fleet management services as well as salary packaging, posted a 14.4 percent rise in full-year net profit to $40.5 million. The group’s revenue rose 9.5 percent to $171.4 million for the year ended June 30. The results beat the group’s forecasts published in its prospectus in March last year.
Listing itself had been a positive for the company, helping win customers and experienced staff, said SG Fleet MD Robbie Blau, in a statement to the stock exchange. “This progress gives us the confidence to target similar levels of growth in underlying profit for the current financial year.” Blau said the company’s internal development of technology such as telematics had also been a positive.
“A common theme of the feedback we receive from customers is that our in-house developed technology is providing them with unparalleled real time support and a wealth of information,” said Blau.
Smartgroup, a provider of novated leasing and salary packaging services, is another newcomer to the ASX board. Its financial year ends December 31, but it has recently posted its first-half results showing strong growth.
Smartgroup Chairman Michael Carapiet said the group had renewed contracts with several key clients including its largest.
“The business continues to be highly cash generative,” he said in a press release announcing the results. The group’s after-tax profit rose 47 percent to $12.5 million in the six months ended June 30, compared with the same period a year earlier. Revenue for the group rose 29 percent to $44.8 million.
Like SG and MMS, Smartgroup is saying its future looks prosperous. “We are well on track to deliver another strong year,” said Smartgroup CEO Deven Billimoria.