Overview of McMillan Shakespeare's 1H FY24 interim results

McMillan Shakespeare Limited (ASX: $MMS) has released its 1H FY24 interim results, reporting a 37.7% increase in net profit after tax (NPAT) from continuing operations. The Group's statutory NPAT from continuing operations in 1HFY24 was $43.8 million, reflecting the economic climate of increased cost of living pressures and the transition to zero emission and more fuel-efficient vehicles.

Executive commentary on financial performance and strategic initiatives

The Group's Normalised revenue from continuing operations saw an 8.1% increase to $261.1 million, with Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) up 42.9% to $86.9 million. The return on capital employed ('ROCE') also saw a significant increase of 7.5% points to 46.2%. McMillan Shakespeare's strategic focus on excelling in customer experience, technology-enabled productivity, and competency-led solutions has been supported by the Simply Stronger program, with $7.3 million of capital expenditure invested during 1HFY24.

Summary of McMillan Shakespeare's outlook and financial position

Looking ahead, McMillan Shakespeare anticipates the automotive supply dynamics experienced in 1HFY24 to continue through 2HFY24, with a focus on capitalizing on the current electric vehicle (EV) market opportunity. The Group also aims to minimize the impact of the loss of the South Australian Government contract on future earnings. Additionally, the Board declared an interim fully franked dividend of 76.0 cents per ordinary share, payable on 22 March 2024, reflecting the Group's positive outlook and financial position.