Smartgroup Stock Earnings Reports

Smartgroup delivered a strong FY2025 with broad-based growth, margin expansion and high cash conversion. Revenue rose 8% to $329.3m, EBITDA grew 14% to $135.3m (41% margin) and NPATA increased 11% to $80.2m. Key volume metrics: active salary packages +10% to 491k, novated leases under management +15% to 85.3k, and fleet-managed vehicles +9% to 35.2k. Management reiterated a clear multi‑phase strategy focused on digital & technology, leasing innovation, product breadth and fleet competitiveness; they expect EBITDA margin to reach the mid‑40s in 2027 as platform modernization, consolidation and automation deliver scale benefits. Capital allocation: conservative balance sheet (net debt $38.1m, 0.3x leverage), continued allocation to tech (2026 capex guidance $11–13m), intention to pay fully franked ordinary dividends in line with policy (60–70% of NPATA) and opportunistically return excess capital. For FY25 the Board declared a final ordinary dividend $0.215 and a special dividend $0.12, bringing full‑year fully franked dividends to $0.53 per share (90% of NPATA). Other notable points: EV adoption within novated leasing is accelerating (battery EV orders +49% YoY) while ICE orders also grew (+4% YoY); management does not currently see vehicle supply constraining growth. The main near‑term risk cited is potential government policy changes from the electric car discount review, though management believes demand drivers remain robust across segments.