ASX:MMS

Stock Analysis Report

Executive Summary

McMillan Shakespeare Limited provides salary packaging, novated leasing, asset management, and related financial products and services in Australia, the United Kingdom, and New Zealand.


Snowflake Analysis

Good value with proven track record and pays a dividend.

Share Price & News

How has McMillan Shakespeare's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MMS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.8%

MMS

4.1%

AU Professional Services

4.0%

AU Market


1 Year Return

-39.1%

MMS

-17.7%

AU Professional Services

-16.5%

AU Market

Return vs Industry: MMS underperformed the Australian Professional Services industry which returned -20.6% over the past year.

Return vs Market: MMS underperformed the Australian Market which returned -16.2% over the past year.


Shareholder returns

MMSIndustryMarket
7 Day4.8%4.1%4.0%
30 Day-22.4%-22.6%-15.4%
90 Day-42.3%-32.3%-23.5%
1 Year-35.4%-39.1%-15.3%-17.7%-12.8%-16.5%
3 Year-33.8%-43.1%-0.6%-9.1%-0.9%-14.5%
5 Year-20.6%-38.0%11.3%-1.9%11.2%-13.9%

Price Volatility Vs. Market

How volatile is McMillan Shakespeare's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is McMillan Shakespeare undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MMS (A$7.45) is trading below our estimate of fair value (A$21.22)

Significantly Below Fair Value: MMS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MMS is good value based on its PE Ratio (9.6x) compared to the Professional Services industry average (12x).

PE vs Market: MMS is good value based on its PE Ratio (9.6x) compared to the Australian market (13.4x).


Price to Earnings Growth Ratio

PEG Ratio: MMS is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: MMS is overvalued based on its PB Ratio (1.9x) compared to the AU Professional Services industry average (1.4x).


Next Steps

Future Growth

How is McMillan Shakespeare forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

8.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MMS's forecast earnings growth (8.5% per year) is above the savings rate (1.1%).

Earnings vs Market: MMS's earnings (8.5% per year) are forecast to grow slower than the Australian market (10.7% per year).

High Growth Earnings: MMS's earnings are forecast to grow, but not significantly.

Revenue vs Market: MMS's revenue (2.1% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: MMS's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MMS's Return on Equity is forecast to be high in 3 years time (24.4%)


Next Steps

Past Performance

How has McMillan Shakespeare performed over the past 5 years?

-5.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MMS has high quality earnings.

Growing Profit Margin: MMS's current net profit margins (11.6%) are higher than last year (9%).


Past Earnings Growth Analysis

Earnings Trend: MMS's earnings have declined by -5.9% per year over the past 5 years.

Accelerating Growth: MMS's earnings growth over the past year (28.6%) exceeds its 5-year average (-5.9% per year).

Earnings vs Industry: MMS earnings growth over the past year (28.6%) exceeded the Professional Services industry 12.9%.


Return on Equity

High ROE: Whilst MMS's Return on Equity (21.44%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is McMillan Shakespeare's financial position?


Financial Position Analysis

Short Term Liabilities: MMS's short term assets (A$269.0M) exceed its short term liabilities (A$135.7M).

Long Term Liabilities: MMS's short term assets (A$269.0M) do not cover its long term liabilities (A$358.9M).


Debt to Equity History and Analysis

Debt Level: MMS's debt to equity ratio (110.9%) is considered high.

Reducing Debt: MMS's debt to equity ratio has increased from 95.5% to 110.9% over the past 5 years.

Debt Coverage: MMS's debt is well covered by operating cash flow (43.6%).

Interest Coverage: MMS's interest payments on its debt are well covered by EBIT (12.2x coverage).


Balance Sheet


Next Steps

Dividend

What is McMillan Shakespeare's current dividend yield, its reliability and sustainability?

9.93%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MMS's dividend (9.93%) is higher than the bottom 25% of dividend payers in the Australian market (3.1%).

High Dividend: MMS's dividend (9.93%) is in the top 25% of dividend payers in the Australian market (8.08%)


Stability and Growth of Payments

Stable Dividend: MMS's dividend payments have been volatile in the past 10 years.

Growing Dividend: MMS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (95.1%), MMS's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MMS's dividends in 3 years are forecast to be covered by earnings (62.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure


CEO

Mike Salisbury

5.5s

Tenure

AU$787,874

Compensation

Mr. Michael Neil Salisbury, also known as Mike, MBA has been the Chief Executive Officer of McMillan Shakespeare Ltd. since October 1, 2014 and has been its Managing Director since February 5, 2015. Mr. Sa ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD480.18K) is below average for companies of similar size in the Australian market ($USD779.51K).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Salisbury
MD, CEO & Director5.5yrsAU$787.87k0.021% A$115.5k
Mark Blackburn
CFO & Company Secretary8.5yrsAU$643.42k0.0039% A$21.0k
Geoff Kruyt
Managing Director of Maxxia UKno dataAU$911.97kno data
Simon Haidar
Group Executive of Sales & Product Servicesno datano datano data
Julia Edwards-Smith
Group Executive of Marketing1.25yrsno datano data
Suzanne Shepherd
Group Executive of Human Resourcesno datano datano data
Sean Dempsey
Chief Executive Officer of Plan Management Partnersno datano datano data
Andrew Suckling
Group Executive of Innovationno dataAU$213.80kno data
Ron Steiner
Group Executive of Customer Relations2.42yrsno datano data

4.0yrs

Average Tenure

Experienced Management: MMS's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Salisbury
MD, CEO & Director5.5yrsAU$787.87k0.021% A$115.5k
Ian Elliot
Independent Non-Executive Director5.92yrsAU$133.75k0.0016% A$8.8k
John Bennetts
Non-Executive Director16.33yrsAU$124.38k4.32% A$23.4m
Ross Chessari
Non-Executive Director16.33yrsAU$122.50kno data
Timothy Poole
Non-Executive Chairman4.5yrsAU$208.84k0.039% A$209.7k
Helen Kurincic
Independent Non-Executive Director1.58yrsAU$108.85k0.026% A$139.8k

5.9yrs

Average Tenure

57.5yo

Average Age

Experienced Board: MMS's board of directors are considered experienced (5.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MMS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

McMillan Shakespeare Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: McMillan Shakespeare Limited
  • Ticker: MMS
  • Exchange: ASX
  • Founded: 1988
  • Industry: Human Resource and Employment Services
  • Sector: Commercial Services
  • Market Cap: AU$540.894m
  • Shares outstanding: 77.38m
  • Website: https://www.mmsg.com.au

Number of Employees


Location

  • McMillan Shakespeare Limited
  • The Tower
  • Level 21
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MMSASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMar 2004
MMSCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMar 2004
NMNDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2004

Biography

McMillan Shakespeare Limited provides salary packaging, novated leasing, asset management, and related financial products and services in Australia, the United Kingdom, and New Zealand. It operates in three segments: Group Remuneration Services, Asset Management, and Retail Financial Services. The Group Remuneration Services segment offers employee benefits administration services for salary packaging and ancillary services, including novated leasing asset and finance procurement, motor vehicle administration, and other services. The Asset Management segment provides financing and finance brokerage services, and ancillary fleet management related with motor vehicles, commercial vehicles, and equipment; and retails used motor vehicles. The Retail Financial Services segment offers retail brokerage services; and engages in the aggregation of finance originations and extended warranty cover. The company also provides plan management and software development services. It serves federal and state governments, health groups, not-for-profit organizations, and private corporations. The company was founded in 1988 and is headquartered in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 10:31
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.