Smartgroup Corporation Ltd

SIQ: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$3.20	Skd	Qwbhkvxm

Smartgroup Earnings: Drawbacks Remain Despite Expected Margin Improvements

Shaun Ler

Feb 21, 2024

No-moat Smartgroup’s underlying 2023 net profit after tax is slightly stronger than we expected, up 7% to AUD 63 million. This is despite margins being much weaker than we expected. Stronger revenue growth of 12% was held back by cost pressures, notably wage inflation, slow vehicle delivery times, and technology spending. Group EBITDA margin declined to 39% from 42%, contrasting with our expectation for margin expansion.

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