Smartgroup Targets AU$94 Million Adjusted Profit as Novated Leasing Demand Accelerates

Highlights:

• Novated leasing settlements climbed 31%, signalling stronger demand across Smartgroup’s vehicle financing platform.

• Smartgroup expects CY2026 adjusted earnings of AU$92–94 million despite increased investment.

• Expanding automotive partnerships and digital transformation could strengthen its profitability through 2027.

Smartgroup Raises Confidence in Earnings Outlook

Smartgroup Corporation Ltd (ASX: SIQ), an Australian employee services and fleet solutions provider, has reaffirmed its earnings outlook after recording stronger demand for novated leasing during the September quarter. In its trading update released on 9 November 2026, the company forecast CY2026 net profit after tax and amortisation (NPATA) of AU$92 million to AU$94 million, supported by improving operational momentum and favourable market conditions.

The forecast relates to adjusted NPATA rather than statutory net profit, with the measure excluding specified non-cash amortisation and significant non-operating items.

Novated Leasing Growth Strengthens Business Momentum

Smartgroup reported a 31% year-on-year increase in total novated leasing settlements during the third quarter of 2026. New leasing orders, excluding refinanced vehicles, advanced 33%, highlighting continued customer interest in vehicle financing through salary packaging arrangements.

Electric vehicles also remained an important growth contributor. Approximately 73% of new battery electric vehicle orders were priced below AU$75,000, indicating sustained demand for relatively affordable electric mobility options.

The company also reported expanding customer numbers across its business operations. By the September quarter, active salary packages reached 524,000, while novated leases under management increased to 98,000. Fleet-managed vehicles also climbed to 36,300, reflecting broader business expansion.

Strategic Investments and Expansion Opportunities

Managing Director and Chief Executive Officer Scott Wharton indicated that Smartgroup would accelerate reinvestment during the second half of 2026 to strengthen its technology infrastructure and support future expansion.

The company maintained its CY2026 capital expenditure guidance of AU$13 million to AU$15 million. Management anticipates that EBITDA margins in the second half of 2026 will remain broadly in line with the levels achieved during the first half.

Smartgroup is also expanding distribution partnerships with automotive manufacturers and dealer groups, including BYD, Hyundai, Genesis, Mahindra and AutoLeague. These initiatives are intended to broaden customer access and strengthen its leasing proposition.

Outlook: Profitability Remains in Focus

Looking ahead, Smartgroup is targeting EBITDA margins in the mid-40% range during 2027. Continued digital transformation, fleet expansion and stronger automotive partnerships could support this ambition. However, the ability to balance reinvestment with margin improvement will remain important in determining whether its current operational momentum translates into sustainable earnings growth.

Note- All data presented is based on information available at the time of writing.

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