McMillan Shakespeare (ASX:MMS) share price plummets 9% despite 2500% rise in NPAT

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The McMillan Shakespeare Limited (ASX: MMS) share price is in freefall after the release of the company's full-year results for FY21.

At the time of writing, shares in the salary packaging and asset management provider are trading for $12.18 – down 8.97%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.18% higher.

Let's take a closer look.

McMillan Shakespeare share price slumps despite dividend almost doubling

What happened in FY21 for McMillan Shakespeare?

The biggest story in the world, and one that had a material impact on the McMillan Shakespeare share price in FY21, was the coronavirus pandemic.

The company talked about the effect of the pandemic on its finances in its annual report. To quote:

In response to the pandemic, we instituted a wage freeze for FY21 and no bonuses relating to FY20 were paid. Additionally, we extended senior debt maturities and non-essential spending was restricted. The Australian Government JobKeeper funding received ($7.3 million after-tax) in FY21 enabled the retention of our employees despite the challenges of COVID-19 and the negative impacts on our financial performance compared to FY19. The business by period end had returned to around 90% of its pre-pandemic performance, equating to approximately 80% in the absence of JobKeeper.

What's next for McMillan Shakespeare?

McMillan Shakespeare said it expects the uncertain trading environment of the pandemic to continue in FY22.

"We expect the abnormal trading conditions that characterised FY21 to continue throughout FY22, in particular given the ongoing response of governments to the global pandemic, and motor vehicle supply constraints," the company said.

"Our strategic focus in FY22 centres on growth and efficiency across our businesses…"

McMillan Shakespeare share price snapshot

Despite today's massive correction, the McMillan Shakespeare share price has increased 25% over 12 months. It has dropped just over 1% year-to-date, however.

McMillan Shakespeare has a market capitalisation of around $1 billion.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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