McMillan Result Meets Expectations but Potential Client Loss Causes Jitters

No-moat McMillan Shakespeare locked in another strong year, delivering 19% growth underlying net profit after tax, or NPAT, to AUD 87.2 million. EPS increased 17.2% to AUD 1.05. The result was boosted by well-performing acquisitions and a good performance from the main division, Group Remuneration Services, or GRS. While the result met our fiscal 2016 NPAT forecast of AUD 87.6 million, we believe a tougher operating environment and absence of acquisitions will result in lower growth in 2017. We are expecting NPAT and EPS growth of 3%.