– By Caroline Falls –
Smartgroup Corp, one of four listed fleet management services groups, has posted double-digit revenue and profit growth for the six months ended June 30, thanks to strong growth in its core business of salary packaging and novated leasing. It cited recent acquisitions of Autopia and Selectus as drivers of future growth.
Smartgroup reported a 45 percent increase in net profit to $18.1 million for its first half, compared with the same period a year ago. This so-called statutory profit figure excludes the newly acquired units, both announced in July after the close of the reporting period. The statutory profit is based on a 36 percent increase in revenue to $60.9 million and a widening of its operating margin to a whopping 42 percent.
The company said the number of salary packages it manages increased 52 percent to 185,000 in the six months ended June 30, compared with 122,000 in the same corresponding period a year earlier. That number jumps to 210,000 when adding in 22,000 packages acquired with Selectus and another 3,000 packages from Autopia.
Its novated leases under management increased 13 percent to 35,000 from 31,000 in the first half. It has since risen a further 16,000 to 51,000 when adding in leases under management obtained through Selectus and Autopia.
“The recent acquisitions of Autopia and Selectus strengthen our core business, enabling us to service all segments of the salary packaging market,” said Deven Billimoria, CEO of Smartgroup. Autopia increases Smartgroup’s presence in the corporate segment bringing in a further 300 employer clients, while Selectus adds in more than 500 employer clients and takes Smartgroup into the private school domain.
In a promise of further good news, the company’s results presentation said, “Smartgroup is well placed to deliver another year of strong results with growth across financial and operational metrics.”
For the sake of comparison Smartgroup provided in its financial reports estimated contributions of Autopia and Selectus for the period. The company indicated net profit of $24.2 million for the first half when taking into account the addition of Selectus and Autopia, Smartgroup said its guidance for full-year net profit, taking into account part-year contributions from its recent acquisitions, was for between $41.2 million and $43.2 million
Among the highlights cited by Smartgroup in its first half was retention of big government clients in its salary-packaging business, including Queensland Government, and adding in new ones, including Queensland Health.
Other milestones for the group in the first half included being selected by NSW as one of two fleet management administrators. Smartgroup said it had on-boarded about 1,000 of the state government’s vehicles through that retainer.
Smartgroup’s workforce management unit, health-e workforce solutions, was also singled out as a success — for retaining three clients including Royal Adelaide Hospital and attracting another two including ACT Health.
