McMillan Shakespeare (MMS) H1 2025 earnings summary

Executive summary

• Revenue from continuing operations increased 7.9% year-over-year to $276.8m, with normalized revenue up 2.4% to $276.4m and growth across all three business segments.

• Net profit after tax attributable to members rose 20.3% to $45.2m, while statutory NPAT from continuing operations was $45.2m, up 3.4% year-over-year.

• Strategic investments in digital transformation and new business lines, including $11.9m in investments and $4.4m in non-recurring costs, supported customer growth and operational efficiencies.

• Interim fully franked dividend of $0.71 per share declared, representing a 100% payout of normalized UNPATA.

• Simply Stronger transformation program is delivering productivity and digital experience improvements, with benefits expected to increase in 2HFY25.

Financial highlights

• Normalized UNPATA was $49.6m, down 6.7% year-over-year due to higher costs.

• Normalized EBITDA from continuing operations fell 7.1% to $80.8m, impacted by $4.4m in non-recurring costs.

• EBITDA margin remained above 30% despite increased investment; margin was 30.2% (31.9% excluding non-recurring costs).

• Return on capital employed (ROCE) was strong at 61.7%.

• Onboard Finance receivables reached $411.4m, up 97.4% year-over-year, with a $300m private placement completed.

Outlook and guidance

• 2HFY25 Normalized UNPATA is expected to be higher than 1HFY25, driven by novated sales growth, new client wins, Simply Stronger efficiencies, and reduced non-recurring costs.

• Onboard Finance normalization adjustment of approximately $8m expected for FY25, the final year of normalization.

• FBT exemption for plug-in hybrids expires April 2025; battery EV exemption continues, with review by mid-2027.

• Non-recurring costs anticipated to reduce in the second half.