Overview of McMillan Shakespeare's 1HFY24 financial results

McMillan Shakespeare Limited (ASX: $MMS) has released its financial results for the first half year ended 31 December 2023 ('1HFY24'). The company reported a strong growth in financial performance and margin expansion, with novated lease sales up 25.7% and Electric Vehicles accounting for 36.9% of new novated leases. The normalised EBITDA from continuing operations increased by 42.9% to $86.9m compared to 1HFY23, and the statutory NPAT for total operations rose to $37.6m, representing a 5.8% increase from 1HFY23. The company also declared an interim fully franked dividend of 76.0 cps, reflecting a 100% payout ratio of Normalised UNPATA.

Executive commentary on 1HFY24 financial performance

The Group's strong financial performance was achieved by supporting our customers with the benefits of novated leasing and salary packaging in maximising their take home salary during a period of increased cost of living and higher interest rates. Supported by the Federal Government's Electric Vehicle FBT exemption, we have seen a clear move by Australians to transition to zero emission and more fuel-efficient vehicles. Our strong performance was supported by increasing demand and availability of Electric Vehicles reflected in novated lease sales being up 25.7% for the period with electric vehicles now accounting for 36.9% of new leases in the period. The first half saw us continue to increase customer numbers across business segments while making good progress on our Simply Stronger program focused on supporting the Group's strategic priorities of excelling in customer experience, technology enabled productivity and competency led solutions to deliver sustainable growth.

Summary of 1HFY24 financial results and outlook

McMillan Shakespeare Limited (ASX: $MMS) has reported strong financial results for the first half year ended 31 December 2023 ('1HFY24'). The company experienced significant growth in financial performance and margin expansion, driven by a 25.7% increase in novated lease sales and a notable shift towards Electric Vehicles, which accounted for 36.9% of new novated leases. The Group's strategic priorities of excelling in customer experience, technology enabled productivity, and competency led solutions have contributed to sustainable growth. Looking ahead, the company anticipates continued demand for Electric Vehicles, supported by new brands and models entering the Australian market, as well as ongoing wage and cost of living pressures. McMillan Shakespeare aims to capitalize on the current EV market opportunity while focusing on delivering enhanced digital experience and solutions for customers, technology enabled productivity, and sustainable growth through its 'Simply Stronger' program. The company also plans to invest approximately $23m in capital expenditure in the Simply Stronger program over FY24.