Smartgroup Corporation (ASX: SIQ) has wrapped up 2024 with an impressive financial and operational performance, delivering 22% revenue growth to $305.8 million and a 15% rise in NPATA to $72.4 million. The company’s novated leasing and salary packaging businesses flourished, supported by strong customer demand and digital transformation initiatives.
Financial Strength and Dividend Boost
Smartgroup’s operating EBITDA climbed 18% to $118.7 million, with an EBITDA margin of 39%. The company’s strong cash flow (108% of NPATA) enabled it to maintain a low net debt level of 0.4x EBITDA, reinforcing its financial flexibility. Shareholders will be pleased with a fully franked final dividend of 20 cents per share, plus a special dividend of 11 cents, bringing total dividends for 2024 to 90% of NPATA.
Booming Novated Leasing and EV Adoption
The novated leasing segment saw a 20% increase in settlements, with EVs making up 44% of all new car lease orders—demonstrating growing demand for sustainable transport solutions. Meanwhile, ICE vehicle orders still rose 12%, reflecting broad-based strength in the leasing market. The successful onboarding of the South Australian Government’s salary packaging program, covering over 110,000 employees, was another highlight.
Strategic Priorities Driving Growth
Smartgroup continued to streamline operations and enhance customer experience, including:
- Launching Smart.com.au, a new digital customer platform
- Enhancing the car leasing portal for a smoother user experience
- Expanding partnerships, including with Qantas and Intellihub
- Divesting non-core businesses, sharpening its focus on salary packaging, leasing, and fleet
2025 Outlook: Optimistic but Cautious
Looking ahead, CEO Scott Wharton remains cautiously optimistic, keeping an eye on consumer sentiment, interest rates, and the phase-out of the PHEV government incentive in March 2025. However, continued investment in digital assets and customer experience is expected to drive further efficiencies and scalability. Technology capex for 2025 is projected at $11-13 million, consistent with last year.
With a strong balance sheet, growing customer base, and continued strategic execution, Smartgroup is well-positioned to deliver profitable growth in 2025 and beyond.
