Smartgroup Corporation (ASX: SIQ) – Smartgroup Half Year Results 2026

Smartgroup Corporation delivered record results in the first half of 2026, reporting revenue of $179.5m, up 13% from the prior year period, while operating EBITDA increased 16% to $73.8m. The stronger earnings growth relative to revenue growth signals meaningful operational leverage, with EBITDA margin expanding to 41%, up one percentage point despite operating expenses rising 12%. This margin expansion reflects disciplined cost management and improved scale across the Group’s core novated leasing and salary packaging businesses.

The standout feature of the results has been the surge in battery electric vehicle adoption. Smartgroup reported BEV new-vehicle orders increased 162% during the half, now representing 68% of total new-vehicle orders. This shift reflects broader market trends toward electrification but also indicates that Smartgroup’s digital platform and dealer partnerships have positioned the company well to capture demand as consumers transition to electric vehicles. The 17% growth in novated leasing settlements demonstrates the underlying strength of the core business independent of the EV cycle, though the EV acceleration has clearly provided a tailwind to current period results.

Statutory net profit after tax reached $42.4m, up 11% year on year, while adjusted NPATA was also $42.4m. Return on equity remained strong at 31% after tax, matching the prior year despite higher earnings, indicating the company has maintained capital efficiency while growing the business. The balance sheet remains robust with net debt at just 0.2x EBITDA, providing substantial flexibility for future investments and shareholder returns. Capital expenditure guidance for calendar year 2026 of $13m to $15m suggests measured investment without major capex cycles emerging.

Management declared an interim dividend of 21.5 cents per share, fully franked, representing a 10% increase on the prior year interim dividend. The higher payout signals confidence in earnings sustainability and the strength of cash generation. In commentary, Managing Director Scott Wharton noted that while demand has moderated from the exceptional levels in H1 2026, activity remains robust. The company continues to see opportunities to grow customer numbers across salary packaging and novated leasing penetration, with fleet services identified as a significant growth opportunity warranting continued investment.

For investors, the key consideration is how sustainable these results are as EV adoption normalizes. Management’s cautious tone regarding moderation in demand suggests visibility into potential headwinds, but the 31% ROE and expanding margins indicate strong underlying business momentum. The investor focus should remain on whether the company can maintain or grow market share in salary packaging and novated leasing as EV purchasing cycles settle, and whether fleet services can emerge as a meaningful earnings contributor. This announcement has been designated as price sensitive and flagged as material by the ASX.

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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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