Smartgroup (SIQ) H2 2024 earnings summary

Executive summary

• Revenue grew 22% year-over-year to $305.8 million, driven by higher novated leasing volumes, improved vehicle supply, and digital transformation initiatives.

• EBITDA rose 18% to $118.7 million, with a full-year margin of 39% and a second-half margin of 40%.

• NPATA increased 15% to $72.4 million; statutory NPAT was $75.6 million, up 22% year-over-year.

• Active customers increased 12% to 445,000, with novated leases under management up 22% to 74,300.

• Strategic priorities advanced, including digital platform launches, brand consolidation, and improved customer experience.

Financial highlights

• Operating cash flow conversion was 108% of NPATA, with net cash from operating activities at $78.1 million.

• Fully franked dividends for 2024 totaled 48.5 cps, representing 90% of NPATA, including a special dividend.

• Net debt stood at $45.4 million, or 0.4x EBITDA, reflecting a strong and flexible balance sheet.

• Capitalised IT development costs were $12 million in 2024, with similar CapEx expected for 2025.

• Return on equity ranged from 24.1% to 29% after tax.

Outlook and guidance

• Cautiously optimistic for 2025, monitoring macroeconomic conditions, consumer sentiment, and regulatory changes.

• Technology CapEx for 2025 guided at $11–$13 million, similar to 2024.

• Focus on driving operating leverage, cost management, and efficiency programs to support scalable growth.

• Expecting revenue per customer to improve through digital and additional services in the medium term.

• PHEV government incentive ending March 2025 may impact future EV demand.