The Smartgroup Corporation Ltd (ASX: SIQ) share price is edging higher in early morning trade. This follows an announcement from the salary packaging and novated leasing company that it has renewed a significant contract.
At the time of writing, Smartgroup shares are fetching for $7.24 apiece, up 0.42%.
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Smartgroup extends partnership
Investors took the time to digest the company's release overnight which have pushed its shares slightly higher.
In yesterday's after market statement, Smartgroup advised it has been successful in securing a contract renewal from the Department of Defence. The continued partnership will see the company provide salary packaging and novated leasing services until June 2026.
The latest win comes after Smartgroup entered into a competitive tender process against other salary packaging and fleeting management companies.
It's worth noting, the Department of Defence is Smartgroup's largest single client since first winning the contract in 1999.
Smartgroup CEO, Tim Looi commented on the positive news, saying:
We are delighted that Smartgroup will be able to continue its long-term relationship with Department of Defence. We have strong client relationships across our diversified client base and continue to focus on customer experience as a key driver of those relationships.
In 2020, we renewed or extended all eight top 20 contracts that fell due and we have now renewed or extended the bulk of the top 20 contracts that fell due in 2021.
About the Smartgroup share price
In the last 12 months, Smartgroup shares have risen from the $6 mark to $7.21 as of yesterday's closing price. This roughly represents an increase of 20% for shareholders. The company's shares reached a 52-week high of $7.85 in early February ahead of its full-year results. However, once the financial report was released to the ASX, Smartgroup shares tanked to $5.95.
Based on valuation grounds, Smartgroup commands a market capitalisation of about $962 million, with approximately 133 million shares on issue.
