MCMILLAN SHAKESPEARE LIMITED (MMS)
Share Price Analysis and Chart

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01/09/2025

1

Overweight

$20.00

15.54%

McMillan Shakespeare's FY25 results were modestly ahead of consensus, notes Morgan Stanley with profit of $103.2m up 2% on $100.8m expected.

Group revenue of $293.4m was -2% below consensus, but underlying profit of $74m was 2% ahead, with novated leasing resilient despite lower salary package volumes following contract losses, explain the analysts.

The Group Remuneration Services (GRS) division delivered stable revenue trends, supported by ex-SA Government growth of 7.4%, highlights Morgan Stanley.

Non-recurring costs in GRS fell to -$1.7m in the second half, implying to the broker a $2.7m release, with no further warehouse adjustments expected in FY26 and a potential tailwind from FY27.

The analysts expect business momentum across all segments, supported by customer growth and reduced non-recurring costs. 

Overweight rating. Target $20. Industry view: In-Line.

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07/09/2025

3

Hold

$20.05

15.83%

Canaccord Genuity notes McMillan Shakespeare's FY25 underlying net profit was broadly in line with its forecast. While cost reductions supported margins, the broker highlights the divisional outlook remains mixed for FY26.

The GRS unit was impacted by the loss of the South Australian government contract, but this was offset by retail channel growth. The broker expects some yield moderation in 1H26 vs 2H25, though still above 1H25 levels.

FY26 EBITDA for the AMS business is expected to benefit from stable used car pricing, with a modest uplift expected in remarketing yields. The PPS unit is expected to continue benefiting from strong NDIS growth.

Overall, the broker lifted FY26 EPS forecast by 4.4% and FY27 by 5.3% to reflect operational improvements and cost efficiencies.

Target rises to $20.05 from $16.50, with an increase in GRS and AMS multiples the key reason. Hold maintained.

FORECAST
Canaccord Genuity forecasts a full year FY26 dividend of 171.00 cents and EPS of 162.00 cents.
Canaccord Genuity forecasts a full year FY27 dividend of 171.00 cents and EPS of 173.00 cents.