Weak car sales, tighter regulation slow McMillan Shakespeare
An 8 per cent fall in Australian new car sales during the year to June was one of a couple of challenges that held back revenue growth for salary packaging and leasing company McMillan Shakespeare Group in the 2018/19 financial year.The company earned revenue of A$549.7 million - largely unchanged from the previous year. Net profit rose 26.6 per cent to $63.7 million.Rather than NPAT, the company prefers to focus on its UNPATA. This is net profit after tax but before the after-tax impact of acquisition related items, including impairment charges for goodwill and other intangible assets, acquisition expenses and the amortisation of acquired intangible assets. On that basis, earnings were down from $93.5 million to $88.7 million.In its group remuneration services division, which includes salary packaging and novated leasing, revenue grew 6.8 percent from $207.8 million to $221.9 million. The novated leasing business grew 7.4 per cent.In retail financial services, the finance broker aggregation business increased finance volume by 5.1 per cent to $1 billion.The company had sought to grow by acquisition but without success. During the year, it entered into a scheme of arrangement to acquire Eclipx Group - a provider of fleet vehicle leasing and management services. But in April the scheme was terminated.In response to changes in the regulatory environment, the company wrote off $18.3 million of intangibles associated with its warranty business. It introduced a redesigned suite of warranty and insurance products.The company faces a class action brought against warranty provider Davantage Group, a subsidiary of Presidian Holdings, which McMillan Shakespeare acquired in 2015.