Smartgroup has reported solid first-half results that demonstrate the salary packaging specialist is translating market tailwinds into both revenue growth and margin expansion. Revenue rose 13 percent to $179.5 million while EBITDA climbed 16 percent to $73.8 million, with the company managing to expand EBITDA margins by one percentage point despite the competitive pressures facing the sector. This margin story matters because it shows management is generating returns on the back of organic growth rather than simply riding volume increases. The net profit after tax adjusted figure, or NPATA, grew 11 percent to $42.4 million, and the board backed this confidence with a 10 percent dividend increase to 21.5 cents per share, fully franked.
The operational drivers underscore genuine momentum in the business. Active customers grew seven percent to reach 518,000, but the more telling numbers come from the specialised segments Smartgroup targets. Novated leasing remains the crown jewel, with leases under management surging 15 percent to 91,600, up 11,600 in the period. Fleet-managed vehicles climbed 12 percent to 36,200, and perhaps most intriguingly, new vehicle orders for battery electric vehicles exploded 162 percent year-on-year. These figures point to the company capturing growth from structural shifts in the auto market, not just taking market share from competitors.
Productivity metrics signal that the company’s technology investments are starting to pay off operationally. The company achieved a 19 percent improvement in customers served per operations full-time equivalent, driven by the new mobile app and continued platform enhancements. Direct yield, a key measure for the salary packaging segment, grew two percent. Management also expanded its partnership with Volkswagen Financial Services to support fleet growth, a move that locks in scale and distribution for EV products as that market accelerates.
The business sits squarely on several tailwinds. The addressable market for salary packaging in Australia remains large at roughly 2.5 million potential customers, while EV incentive policies and population growth should continue driving volumes. Customer retention in the core segments is strong, backed by long-term client contracts, which provides revenue visibility. The company’s market leadership in digital platforms gives it an operational edge as the industry consolidates.
What stands out to investors is the combination of organic growth, margin expansion, and shareholder returns happening simultaneously. The 10 percent dividend increase signals management confidence that the earnings growth trajectory is sustainable. The EV tailwind remains early-stage with BEV orders up 162 percent coming from a smaller base, but the trajectory is unmistakable.
For investors monitoring the stock, key metrics to track going into the full year are the rate of new customer acquisition, whether the company can maintain or further expand margins as it scales, and whether novated lease growth remains in the double-digit range. Management’s execution against these targets will largely determine investor sentiment through the remainder of 2026. This announcement is classified as price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Smartgroup Corporation Ltd (ASX: SIQ)
Smartgroup Corporation is an Australian company that provides employee management services including salary packaging, novated leasing, vehicle fleet management, and payroll administration. The company operates three main segments covering outsourced administration, vehicle services, and software solutions. Headquartered in Sydney, it serves employers and employees across Australia.
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