Why the McMillan Shakespeare (ASX:MMS) share price has slipped today

The McMillan Shakespeare (ASX MMS) share price has slipped 2.46% following the release of its half-year results. Here’s the low down.

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The McMillan Shakespeare Limited (ASX: MMS) share price is falling after the financial products and services firm put out its half-year results today.

At the time of writing, the McMillan Shakespeare share price is trading at $12.68, down 2.46%. Let’s look at the company’s performance for the six months ended 31 December 2020 (1H21).

Key financial updates

McMillan Shakespeare reported an 8.4% loss in revenues for a 1H21 total of $247.6 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 19.1% from $57.2 million in 1H20 to $68.2 million in 1H21.

Net profit after taxes (NPAT) tumbled 25% to $25.5 million in 1H21 compared to $34 million in 1H20. Underlying net profit after taxes (UNPATA) was 13% higher totalling $42.7 million for 1H21.

The firm’s free cash flow pumped 23.4%, hitting $42.2 million for 1H21.

Basic earnings per share (EPS) was 42.1 cents per share, a notch up from the 1H20 EPS of 41.6 cents per share.

McMillan Shakespeare declared a fully franked dividend of 30.2 cents per share for the period.

Half-year insight and outlook

The company advised that it continued to manage “extremely challenging trading conditions” during 1H21 brought about by the coronavirus pandemic.

Such conditions included lockdown restrictions in Australia, New Zealand and the UK that negatively impacted sales activities.

The federal government’s JobKeeper program provided the company with $7.3 million (after tax) to retain staff during the COVID-19 economic downturn.

Looking ahead, McMillan Shakespeare expects improved conditions in the broader motor industry.

It advised that it expected COVID-19 would continue to impact operations, business and consumer activity. The company also said there was potential for further disruption.

McMillan Shakespeare predicted the business outlook for 2H21 performance to be similar to that of 1H21, excluding the JobKeeper payment.

McMillan Shakespeare share price snapshot

Despite the challenges, the McMillan Shakespeare share price has gained 8.06% over the past 12 months.

The company’s market capitalisation is $975.1 million, and there are presently 76.8 million shares outstanding.

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Motley Fool contributor Gretchen Kennedy owns shares of McMillan Shakespeare Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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