Smartgroup Corporation has reported a robust first half of 2025, with a 12% rise in NPATA and nearly half of new car leases now electric vehicles. The company’s strategic digital initiatives and strong customer growth underpin its confident outlook.
- Revenue up 7% to $159.1 million
- NPATA increased 12% to $38.1 million
- Electric vehicles represent 48% of new lease orders
- Interim fully franked dividend raised by 11% to 19.5 cents per share
- Strong balance sheet with net debt at 0.3x EBITDA
Solid Financial Momentum
Smartgroup Corporation Ltd (ASX, SIQ) has delivered a strong financial performance for the first half of 2025, reporting revenue growth of 7% to $159.1 million and a 12% increase in net profit after tax adjusted (NPATA) to $38.1 million. The company’s operating EBITDA rose 13% to $63.6 million, pushing its EBITDA margin up by two percentage points to a robust 40%. These results reflect Smartgroup’s effective execution of its growth strategy amid a competitive and evolving market landscape.
Electric Vehicles Accelerate Leasing Demand
One of the standout features of Smartgroup’s half-year results is the surge in electric vehicle (EV) leasing. EVs accounted for 48% of all new car novated lease orders, including 12% plug-in hybrid EVs (PHEVs). This shift aligns with broader market trends and government incentives, although the Federal Government’s Electric Car Discount Policy for PHEVs ended in March 2025. Despite this, demand for battery electric vehicles (BEVs) remains strong, supported by ongoing fringe benefits tax exemptions. Meanwhile, internal combustion engine (ICE) vehicle orders also rose by 9%, underscoring Smartgroup’s broad appeal across vehicle types.
Record Customer Numbers and Strategic Enhancements
Smartgroup’s customer base continues to expand, with active salary packaging customers reaching 484,000, up 82,000 year-on-year. Novated leasing customers grew by 15,400 to 80,000, driven by a 19% increase in new lease vehicle orders. The company’s strategic priorities, announced in early 2024, are progressing well. Notably, Smartgroup launched a new digital salary packaging sign-up journey to streamline onboarding and improve scalability. Additionally, the application of AI to analyze customer call sentiment is enhancing service quality and operational efficiency.
Financial Discipline and Shareholder Returns
Smartgroup maintains a strong and flexible balance sheet, with net debt at a modest 0.3 times EBITDA. Operating cash flow remains robust at $52.5 million, representing 138% of NPATA, reflecting effective working capital management. The board declared an interim fully franked dividend of 19.5 cents per share, an 11% increase from the prior corresponding period, signaling confidence in ongoing cash generation and profitability.
Looking Ahead
CEO Scott Wharton highlighted that some external uncertainties have eased, and demand remains strong. The company targets a mid-forties EBITDA margin by 2027, supported by continued investment in automation and agentic capabilities. Strategic partnerships with BMW Financial Services and Stratton Finance are expected to broaden distribution channels and fuel future growth. While the market environment remains dynamic, Smartgroup’s disciplined approach and innovation-driven strategy position it well for sustained profitable expansion.
Bottom Line?
Smartgroup’s blend of strong financials, EV leadership, and digital innovation sets the stage for ambitious margin gains by 2027.
Questions in the middle?
- How will Smartgroup sustain growth amid evolving government EV incentives?
- What impact will rising interest rates have on novated leasing demand and yields?
- How effectively can AI and digital onboarding scale customer acquisition and retention?