A technology and service sector company, Smartgroup Corporation Ltd has posted a decent top line and bottom line growth. Its latest acquisitions and partnerships make it one of the most searched stock in the investors’ radar. Let's see how this stock has performed based on its recent updates.
Smartgroup Corporation Ltd (ASX: SIQ)
Smartgroup Corporation Ltd (ASX: SIQ) is majorly involved in providing administration services, primarily salary packaging, novated leasing, fleet management and software, distribution and group services. The company recently presented its operational and financial highlights for CY18 at Wilson Rapid Insights Conference. SIQ posted continued strong financial performance, wherein its revenue increased by 18% to $241.8 million as compared to the prior period, and its NPATA increased by 22% to $78 million as compared to the prior period. Its EBITDA for the period increased by 19% to $111.8 million as compared to the previous period.
SIQ’s operating cash flow of $78 million represented 100% of NPATA, which reflects the company’s ability to maintain strong cash flow generation. It remained conservatively geared with net debt of $14.6 million as on December 31, 2018, representing a net debt per EBITDA of around 0.1x. Due to the strong balance sheet, the Board of Directors declared a final fully franked dividend of 21 cps, which is 14% more than 2017 final dividend, with payment date and record date on March 15, 2019, and March 1, 2019, respectively. It brings the total dividend (fully franked) for the period to 41.5 cps, which is 19% more than the prior year. SIQ reported organic growth of around 2,750 leases and ~18K packages.
CY18 Financial Metrics (Source: Company Reports)
In another update, Smartgroup Corporation announced that Challenger Limited and its entities became substantial holder to the company with 5.02% voting rights, effective from May 22, 2019.
SIQ also entered into an eight-year agreement with EML Payments Limited (ASX: EML) to get benefitted from EML’s branded general purpose reloadable card programs for the payout of salary packaging benefits. This revolutionary product allows customers to have multiple benefit accounts funding a single card managed by a virtual wallet. In its acquisition update, Smartgroup acquired novated leasing assets of Mylease for $6.9 million in cash, including $1 million retained in escrow, from iNovation Pty Ltd.
On the stock information front, at market close on May 31, 2019, the stock of Smartgroup Corporation was trading at $8.750, down 1.353% with a market capitalisation of ~$1.17 billion. Its current PE multiple is at 18.99x, and its last EPS was noted at $0.467. Its annual dividend yield has been noted at 4.68%. Today, it reached day’s high at $8.870 and day’s low at $8.730, with a daily volume of 483,137. Its 52 weeks high and low price stands at $13.017 and $7.079, with an average volume of 661,159 (yearly). Its absolute returns for the past one year, six months and three months are -19.35%, -10.55%, and 5.29%, respectively.
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