• Revenue up 2.4% with growth across all segments
• Operating expenses increased to drive customer growth and ongoing efficiencies
• Simply Stronger Program on track with benefits realisation to increase in 2HFY25

McMillan Shakespeare Limited (MMS) reported its 1HFY25 results, with normalised revenue growth of 2.4% and statutory revenue growth of 7.9% across all segments. Operating expenses increased by 7.2% to drive customer growth and ongoing efficiencies, with a non-recurring cost of $4.4m in the GRS segment. Normalised EBITDA margin was 30.2%, down from 33.3% in the prior period, but excluding the non-recurring costs, the margin was 31.9%. The company's Simply Stronger Program is on track, with $12m in capex spent in 1HFY25 and around $1m expected in 2HFY25. Benefits realisation is expected to increase in 2HFY25, including improvements in GRS units per FTE and PSS invoice processing productivity. Onboard Finance continues to scale, with FY25 being the last year of the Normalisation period. The company completed a $300m Australian private placement in November 2024 to diversify its funding sources and improve its maturity profile. The balance sheet remains strong, with net debt to EBITDA of 0.5x and interest cover of 11.0x.

Normalised UNPATA for 2HFY25 is expected to be higher than 1HFY25, benefiting from novated sales growth, efficiencies from the Simply Stronger Program, and a reduction in non-recurring costs. The Onboard Finance Normalisation adjustment of approximately $8m is expected in FY25, which will be the last year the results are Normalised.

The company will focus on excelling in customer experience, driving simplicity and technology-enablement, and broadening its solutions and relationships. The FBT exemption for plug-in hybrids is scheduled to expire on 1 April 2025, while the exemption on battery EVs will continue with the Federal Government committed to review by mid-2027.