Smartgroup’s Share Price Climbs 9% with Positive FY18 Results

At time of writing, Smartgroup Corporation Ltd [ASX:SIQ] shares are trading at $8.91, marking a 9% increase from last trading last week.

Today, the employee management service company, who delivers salary packaging and fleet management, released their FY18 results presentation on the ASX.

The overwhelmingly positive results from this presentation are likely the catalyst for the impressive spike in share price today.

All round solid growth for Smartgroup

The results showed a company revenue of $241.8 million, marking an 18% increase over the 12-month period to 31 December 2018.

EBITDA (earnings before interest, tax, depreciation and amortisation) was up a similar 19%, sitting at $111.8 million compared to $93.6 million for at end of 2017.

This has led to a net profit increase of 22% for the company, from $64.1 million to $78 million in 12 months.

The report also revealed a net debt of $14.6 million as of 31 December 2018, which the company believes makes them ‘conservatively geared’.

As a result, the Board of Directors declared a fully franked final dividend of 21 cents per share, which is a 14% increase from the 2017 final dividend.

CEO of Smartgroup Deven Billimoria added in the report:

In addition to growth across all key financial and operational metrics, our continued focus on customer service has gained recognition from our clients, customers and the industry’.

What this means for Smartgroup’s share price

In their presentation to shareholders, Smartgroup defined CY2018 as ‘another year of growth…building on our track record since company inception’.

And this most recent company update certainly supports this claim.

Plus, the announced dividend payment — which has a record date of 1 March — will bring total dividends for CY2018 for the company to 41.5 cents per share. This is a great incentive for investors.

The company has also doubled the number of full-time employees since November 2015, which is a sign of sustained operational growth.

While nothing is for certain in the stock market, we can’t deny that this update currently paves a positive road ahead for Smartgroup.


Ryan Clarkson-Ledward
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

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