The Smartgroup Corporation Ltd (ASX: SIQ) share price has tumbled following its H1 FY25 results announcement this morning.
At the time of writing, the shares are trading in the red, down 3.11% at $7.79 each. Over the year, the share price is 0.13% higher.
Smartgroup's H1 FY25 results
Here are the key numbers:
- Revenue was up 7% to $159.1 million
- Operating EBITDA was up 13% to $63.3 million
- NPATA was 12% higher at $38.1 million
- Interim dividend of 19.5 cents per share fully franked, up 11%
What happened?
For the six months ended 30 June, Smartgroup posted a 7% lift in its operating revenue to $159.1 million from the prior corresponding period (pcp). Operating expenses were also 4% higher than H1 FY24.
Operating EBITDA was 13% higher than the pcp at $63.6 million, meaning the EBITDA margin was 40%, up 2ppt.
Net profit after tax adjusted to exclude the non-cash affected amortisation (NPATA) was $38.1 million, up 12% on pcp. Meanwhile, statutory NPAT was $38.1 million, up 11% on pcp.
The company said Electric Vehicles (EV) accounted for 48% of H1 2025 new car lease orders, including plug-in hybrid EVs (PHEV) at 12%. Internal Combustion Engine (ICE) new car lease orders increased 9% compared to the previous period.
The business enjoyed a continued strong Return on Equity (ROE) of 30.7%, up 1.9ppt on pcp.
The board declared an interim fully franked dividend of 19.5 cents per share for the six months to 30 June 2025, representing a payout ratio of 69% of NPATA. The record date for the dividend is 9 September 2025 and the payment date is 23 September 2025. There is no dividend reinvestment plan in place.
Company commentary on the results
Commenting on the ASX 200 company's performance over the first half of 2025, managing director and CEO Scott Wharton said:
We continue to grow customer numbers to record levels across salary packaging, novated leasing and fleet, highlighting the strength of our offering and the trust we continue to build with our clients.
Our Strategic Priorities, announced in February 2024, are progressing to plan. We are well positioned within the industry to deliver profitable growth. During the first half of the year, we continued to enhance digital marketing and lead generation activities. We also launched our new digital salary packaging signup journey to improve customer onboarding and deliver scalable growth.
Wharton also commented that, regarding the company's outlook, some of the external short-term uncertainties have eased.
Demand for our products and services remains strong, driven by solid operating momentum and ongoing enhancements in digital marketing and customer engagement.
We are executing our Strategic Priorities to deliver profitable growth and improve efficiency while strengthening Smartgroup's market position. Based on current market conditions, we are targeting midforties EBITDA margin during 2027. With sustained investment, including automation and agentic capabilities, we see continued opportunities to further elevate business performance beyond 2027.
