Smartgroup (SIQ) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 rose 27% year-over-year to AUD 148.5 million, driven by high novated leasing volumes and improved vehicle supply.

• EBITDA increased 20% to AUD 56.2 million, with a margin of 40% excluding South Australian Government contract costs.

• NPAT grew 16% to AUD 34.1 million, with statutory net profit after tax at AUD 34.3 million, and operating cash flow conversion at 108% of NPAT.

• Interim fully franked dividend of AUD 0.175 per share declared, payable 23 September 2024.

• Strategic priorities advanced, including digital transformation, customer experience, and divestment of non-core businesses.

Financial highlights

• Revenue: AUD 148.5 million, up 27% year-over-year.

• EBITDA: AUD 56.2 million, up 20% year-over-year; margin at 40% excluding contract costs.

• NPAT: AUD 34.1 million, up 16% year-over-year; statutory net profit: AUD 34.3 million.

• Operating cash flow: AUD 36.7 million, 108% of NPAT.

• Interim dividend: AUD 0.175 per share, up 13% year-over-year.

Outlook and guidance

• Continued focus on margin improvement, targeting above 40% EBITDA margin in the medium term.

• Robust demand for novated leasing and salary packaging expected to persist.

• Monitoring macroeconomic conditions and customer sentiment, but no current impact on demand.

• No material profit contribution expected from the South Australian Government contract in 2024.

• Additional strategic initiatives planned for H2 2024.