Smartgroup shares soar on smashed expectations

Smartgroup Corporation Ltd (ASX: SIQ) smashed the market's low expectations.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Smartgroup Corporation Ltd (ASX: SIQ) share price has soared 22 per cent to $11.02 this morning after it posted a net profit excluding amortisation of $40.5 million on revenue of $125.8 million for the half-year period ending June 30, 2019. The profit and revenue are up 5% and 3% respectively over the prior year. 

The employee management services provider will pay an interim dividend of 21.5 cents per share, which is up 5% on the prior corresponding period. 

Smartgroup CEO, Deven Billimoria, said, "It has been another successful 6 months for the Group with positive financial performance, client growth and continued success in expanding our service offering. We have made progress with the integration of acquired businesses and we remain focused on operational excellence and improving customer outcomes."

The shares are rising today as the company has comfortably beat the market's low expectations framed by a difficult FY 2019 for the local economy.  

Earnings per share came in at 23.9 cents to put the stock on 23x annualised earnings, with a 3.8% trailing yield or even higher if you account for a 20 cent per share special dividend paid in May 2019.

Shares in rival operator in McMillan Shakespeare Limited (ASX: MMS) caught an updraft as well today on the back of Smartgroup's result to be 5% higher at $12.18 this lunchtime. 

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »