Smartgroup (SIQ) investor relations material

Executive summary

• Achieved record financial results in H1 2026, with revenue up 13% to $179.5 million and EBITDA up 16% to $73.8 million, driven by strong novated leasing, salary packaging growth, and digital transformation.

• NPATA and statutory NPAT both increased 11% to $42.4 million, with return on equity stable at 31%.

• Customer base reached record levels, with 518,000 active salary packaging customers (+7%) and novated leases under management up 15% to 91,600.

• Significant progress on strategic priorities, including digital transformation, brand consolidation, and operational efficiency.

• Interim fully franked dividend of 21.5 cents per share declared, up 10%, representing 70% of NPATA.

Financial highlights

• Revenue increased 13% year-over-year to $179.5 million; EBITDA margin improved to 41%.

• NPATA up 11% to $42.4 million; net operating cash inflow was $50.8 million, 120% of NPATA.

• Operating expenses rose 12% to $100.6 million, reflecting higher leasing demand and transformation investments.

• Dividend payout ratio at 70% of NPATA.

• Basic EPS increased to 32.6 cents.

Outlook and guidance

• Management targets EBITDA margin in the mid-40s during 2027, with further upside through continued investment in technology, automation, and AI.

• Second half to date shows increased orders, settlements, and direct yield versus prior period.

• Continued robust demand for novated leasing, supported by EV adoption and government policy.

• CY26 capex expected to be $13–15 million, supporting digital and fleet strategy.

• Ongoing focus on enhancing operating leverage and productivity through technology and process improvements.