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- Employee management company Smartgroup Corporation (SIQ) is the pick of the litter of today’s big-cap financial reports
- Growth was muted but consistent across the board for the company
- Revenue grew by just over three per cent over the 2019 calendar year with profits rising four per cent compared to 2018
- This growth was despite some industry challenges which included weakened private vehicle sales over the year
- Importantly, the company paid out its highest-ever end-of-year dividend at 21.5 cents per share, fully franked
- Shares in Smartgroup gained 9.52 per cent, currently worth $7.36 each
Employee management specialist Smartgroup Corporation (SIQ) is the pick of the litter today as more of our market’s big-caps release financial reports.
Smartgroup released results for the 12 months from January to December 2019, posting muted-but-consistent growth across the board.
Revenue for the year grew by 3.3 per cent to $249.8 million compared to 2018’s $241.8 million. In line with this, earnings before tax, interest, depreciation and amortisation (EBITDA) grew just less than three per cent to $118.2 million.
Net profit after tax increased four per cent on a statutory level to $61.4 million over 2019.
Smartgroup Managing Director and CEO Deven Billimoria said the company’s steady growth was despite some “industry headwinds” presenting challenges for the company.
One such challenge, according to Smartgroup, is a downturn in private vehicle sales over 2019. While it may seem an unusual challenge for an employee management company to face, one of Smartgroup’s key services is helping employers salary package a new car to their employees — also known as novated leasing.
Though private new vehicle sales declined by eight per cent year-on-year, Smartgroup increased its novated leasing volumes by four per cent compared to the year before.
While working on its record financial year, the company also continued to work on company diversity in the form of inclusion. As such, Smartgroup was recognised by Diversity Council Australia as one of 35 Inclusive Employers for 2019 and 2020.
Nevertheless, what likely pleased investors most is Smartgroup’s bolstering of its end of year dividend to a fully franked 21.5 cents per share.
This brings the company’s full-year ordinary dividend payments to their highest-ever of 43 cents per share. Smartgroup, however, also paid out a special 20-cent fully-franked dividend in May — bringing the total dividends paid in 2019 to 63 cents per share, or $82.9 million.
After today’s report, Smartgroup shares are trading at their highest price of 2020 so far. At market close, shares are up 9.52 per cent and worth $7.36 each. The company has a market cap evaluation just shy of $1 billion.
