Smartgroup's Record Half Marks a Strategic Pivot: Fleet Sale and EV Momentum Fuel Growth
A Strong Half, Powered by EVs
Smartgroup Corporation Ltd delivered a robust set of first-half results, with revenue up 13% to $179.5 million and EBITDA up 16% to $73.8 million, as the company continued to execute on its strategic priorities. The standout was a 162% surge in new battery electric vehicle orders, with BEVs now comprising 68% of all new novated leasing orders. As CEO Scott Wharton noted, “We saw a significant shift in consumer preferences toward battery electric vehicles” — Scott Wharton, Managing Director and CEO · 2026-08-26, driven by improving affordability and broader model availability. This helped drive record settlements and a 17% increase in novated leasing volumes, reinforcing the company's leadership in novated leasing.
Strategic Priorities in Action
The company is two and a half years into a deliberate transformation program, and the half-year numbers show tangible progress. Beyond the EV boom, the digital platform is scaling: customers per operational FTE rose from 1,389 in 2023 to 1,837 today, and 85% of compute infrastructure now runs in the cloud, up from 45% at end-2025. Management reiterated its target of mid-40s EBITDA margin during 2027, driven by continued technology investment and automation. CFO Jason King explained the investment rationale: “We are investing to support future growth opportunities across our core markets, strategic partnerships and expanding customer base while maintaining strong operational discipline.” — Jason King, Chief Financial Officer · 2026-08-26 The company also reduced its brand footprint from 8 to 4 and divested noncore businesses, simplifying the operating model.
Capital Discipline and Outlook
Perhaps the most significant strategic move was the agreement to sell the majority of the self-funded fleet book to Volkswagen Financial Services, which closed in July. This reduces capital intensity and allows the fleet business to scale through third-party funding. As Jason King noted, “We are investing to support future growth opportunities across our core markets, strategic partnerships and expanding customer base” — Jason King, Chief Financial Officer · 2026-08-26, adding that the company will “reinvest the profit from this sale into the acceleration of our fleet proposition.” The company declared an interim fully franked dividend of $0.215 per share (70% of NPATA) and maintained a conservative balance sheet with net debt of $35.4 million and leverage of just 0.2x.
Management expressed confidence in the outlook, citing fleet business momentum and strong inquiry levels across all segments. The second half has started well, with orders, settlements, and direct yield all ahead of the prior corresponding period. As Scott Wharton commented,
We see a supportive environment for continued growth. While we remain mindful of the broader economic conditions and consumer sentiment, demand for novated leasing remains robust.
The story here is a company executing well on a clear plan, riding the EV wave, and making smart capital choices. The fleet divestment to a strategic partner like VWFS signals a new phase of asset-light growth, while the investment in digital infrastructure sets the stage for margin expansion. For investors, the combination of record results, a clear runway, and disciplined capital management makes this a name worth watching.