– By Caroline Falls –
Smartgroup has grown. The novated leasing and salary packaging group posted a 63 percent increase in net profit to $30.3 million for its first half, the six months ended June 30. That was on the back of a whopping 57 percent increase in revenue to $95 million.
“It has been a good half year for the group,” said Deven Billimoria, Smartgroup CEO. “We have continued to work on integrating the businesses acquired last year and achieving the synergies. The group continues to focus on operational excellence to retain and grow our client base, while engaging with our clients at multiple levels to ensure strong ongoing relationships.”
Billimoria and his chief financial officer Tim Looi said in a presentation on the results that the group’s recent acquisitions Autopia, Selectus and AccessPay, were performing well and tracking to expectations.
It’s always good to hear how a company is going onboarding bolt ons. Another recent results announcement by a company in a different industry showed how badly things can go. Media monitoring company Isentia earlier this month announced a full-year loss after making a $39 million write-off against its newly acquired King Content business, a unit that it paid $48 million for and which was supposed to expand its foray into managing such things as website content for clients. Isentia also announced it would kill the brand after a 30 percent drop in revenue in the content unit.
At Smartgroup, the Selectus acquisition in August 2016 had spawned a synergy bonanza of $3.4 million in the six months ended June 30. The Selectus acquisition added in 22,000 salary packaging customers and 13,000 novated lease customers.
Smartgroup said other highlights of the first half included renewal of contracts with WA Health and WA Education.
Salary packages managed by Smartgroup rose 44 percent to 267,000 as at June 30, 2017, compared with 185,000 a year earlier. At least 40,000 of those packages were acquired when Smartgroup paid $15 million for AccessPay in May.
Novated leases managed by the group rose 57 percent to 55,000 from 35,000 a year earlier, including 600 active leases brought in by AccessPay.
Billimoria said the interim results set the group up to deliver another positive result for the full-year, with growth across all key financial and operational metrics. He declared an interim dividend of 16.5 cents per share, up 68 percent from the same period a year earlier.
