ASX:SIQ

Stock Analysis Report

Executive Summary

Smartgroup Corporation Ltd provides specialist employee management services in Australia and internationally.

Snowflake

Fundamentals

Flawless balance sheet with proven track record.

Risks

  • Smartgroup has significant price volatility in the past 3 months.

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

-2.5%

SIQ

0.8%

AU Commercial Services

1.0%

AU Market


1 Year Return

-1.7%

SIQ

5.3%

AU Commercial Services

6.9%

AU Market

SIQ underperformed the Commercial Services industry which returned 5.3% over the past year.

SIQ underperformed the Market in Australia which returned 6.9% over the past year.


Share holder returns

SIQIndustryMarket
7 Day-2.5%0.8%1.0%
30 Day8.7%-1.6%4.2%
90 Day34.5%-5.3%1.6%
1 Year5.3%-1.7%8.4%5.3%13.0%6.9%
3 Year93.3%67.3%22.3%11.8%39.6%20.9%
5 Year942.3%719.3%65.9%43.0%52.8%18.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Smartgroup undervalued based on future cash flows and its price relative to the stock market?

12%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Smartgroup's share price is below the future cash flow value, but not at a moderate discount (< 20%).

Smartgroup's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Smartgroup is overvalued based on earnings compared to the AU Commercial Services industry average.

Smartgroup is overvalued based on earnings compared to the Australia market.


Price Based on Expected Growth

Smartgroup is poor value based on expected growth next year.


Price Based on Value of Assets

Smartgroup is overvalued based on assets compared to the AU Commercial Services industry average.


Next Steps

Future Growth

How is Smartgroup expected to perform in the next 1 to 3 years based on estimates from 5 analysts?

9.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Smartgroup's revenue is expected to grow by 4.9% yearly, however this is not considered high growth (20% yearly).

Smartgroup's earnings are expected to grow by 9.8% yearly, however this is not considered high growth (20% yearly).

Smartgroup's revenue growth is expected to exceed the Australia market average.

Smartgroup's earnings growth is positive but not above the Australia market average.

Smartgroup's earnings growth is expected to exceed the low risk savings rate of 2.3%.


Earnings per Share Growth Estimates


Future Return on Equity

Smartgroup is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).


Next Steps

Past Performance

How has Smartgroup performed over the past 5 years?

43.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Smartgroup has delivered over 20% year on year earnings growth in the past 5 years.

Smartgroup's 1-year earnings growth is less than its 5-year average (13.8% vs 43%)

Smartgroup's earnings growth has not exceeded the AU Commercial Services industry average in the past year (13.8% vs 18.9%).


Return on Equity

Smartgroup has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).


Return on Assets

Smartgroup used its assets more efficiently than the AU Commercial Services industry average last year based on Return on Assets.


Return on Capital Employed

Smartgroup has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Smartgroup's financial position?


Financial Position Analysis

Smartgroup is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Smartgroup's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Smartgroup's level of debt (18.7%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (202.1% vs 18.7% today).

Debt is well covered by operating cash flow (155.5%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 22.3x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 2.2x debt.


Next Steps

Dividend

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

4.15%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Smartgroup's pays a higher dividend yield than the bottom 25% of dividend payers in Australia (2.46%).

Smartgroup's dividend is below the markets top 25% of dividend payers in Australia (5.58%).

Whilst dividend payments have been stable, Smartgroup has been paying a dividend for less than 10 years.

Dividend payments have increased, but Smartgroup only paid a dividend in the past 5 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.1x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.5x coverage).


Next Steps

Management

What is the CEO of Smartgroup's salary, the management and board of directors tenure and is there insider trading?

1.4yrs

Average management tenure


CEO

Deven Billimoria (49yo)

17.7yrs

Tenure

AU$1,154,627

Compensation

Mr. Deven Billimoria has been the Chief Executive Officer of Smartgroup Corporation Ltd since 2002 and has been its Managing Director since March 2014. Mr. Billimoria has been the Managing Director and Chi ...


CEO Compensation Analysis

Deven's remuneration is about average for companies of similar size in Australia.

Deven's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

1.4yrs

Average Tenure

The average tenure for the Smartgroup management team is less than 2 years, this suggests a new team.


Board Age and Tenure

5.5yrs

Average Tenure

The tenure for the Smartgroup board of directors is about average.


Insider Trading

Smartgroup individual insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellAU$1,787,95722 Aug 19
John Prendiville
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares163,433
Max PriceAU$10.94
SellAU$718,82922 Aug 19
Point Capital Pty Ltd
EntityCompany
Shares64,469
Max PriceAU$11.15
SellAU$110,88024 May 19
Challenger Limited
EntityCompany
Shares14,142
Max PriceAU$7.84
BuyAU$21,112,41424 May 19
Challenger Limited
EntityCompany
Shares2,600,589
Max PriceAU$8.12
BuyAU$36,95009 Apr 19
Ian Watt
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares5,000
Max PriceAU$7.39
BuyAU$10,14008 Apr 19
Deborah Homewood
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares1,300
Max PriceAU$7.80
BuyAU$222,90003 Apr 19
John Prendiville
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares30,000
Max PriceAU$7.43
BuyAU$1,122,00003 Apr 19
Michael Carapiet
EntityIndividual
Role
Chairman of the Board
Chairman
Shares150,000
Max PriceAU$7.48
BuyAU$20,63603 Apr 19
Gavin Bell
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,800
Max PriceAU$7.37
BuyAU$408,65003 Apr 19
Andrew Bolam
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares55,000
Max PriceAU$7.43
BuyAU$22,32003 Apr 19
Carolyn Colley
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,000
Max PriceAU$7.44
SellAU$8,359,99903 Apr 19
Deven Billimoria
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares1,100,000
Max PriceAU$7.60
BuyAU$4,572,37618 Mar 19
Pengana Capital Ltd.
EntityCompany
Shares519,515
Max PriceAU$8.80
SellAU$5,375,35318 Mar 19
Pengana Capital Ltd.
EntityCompany
Shares608,646
Max PriceAU$8.83
BuyAU$3,514,70208 Nov 18
Pengana Capital Ltd.
EntityCompany
Shares345,485
Max PriceAU$11.37

Ownership Breakdown


Management Team

  • Deven Billimoria (49yo)

    MD, CEO & Director

    • Tenure: 17.7yrs
    • Compensation: AU$1.15m
  • Tim Looi

    Chief Financial Officer

    • Tenure: 0yrs
    • Compensation: AU$744.69k
  • Bijal Desai

    Chief Risk Officer

    • Tenure: 1.3yrs
  • Amanda Morgan

    General Counsel

    • Tenure: 0yrs
  • Sophie MacIntosh

    Chief Legal Officer & Joint Company Secretary

    • Tenure: 2.8yrs
    • Compensation: AU$384.00k
  • Sarah Haas

    Chief Executive of Salary Packaging

    • Tenure: 1.5yrs
    • Compensation: AU$386.93k
  • Richard Jackson

    Chief of Staff

    • Tenure: 1.5yrs
  • Justine Carmichael

    Chief Human Resources Officer

    • Tenure: 1.1yrs
  • Elizabeth Hall-Walsh

    Chief Information Officer

    • Tenure: 0.2yrs
  • Jonathan Swain

    Joint Company Secretary

    • Tenure: 0.08yrs

Board Members

  • Michael Carapiet (61yo)

    Chairman

    • Tenure: 5.6yrs
    • Compensation: AU$251.85k
  • Deborah Homewood

    Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: AU$131.40k
  • Deven Billimoria (49yo)

    MD, CEO & Director

    • Tenure: 17.7yrs
    • Compensation: AU$1.15m
  • Gavin Bell

    Independent Non-Executive Director

    • Tenure: 5.6yrs
    • Compensation: AU$145.09k
  • John Prendiville

    Non-Executive Director

    • Tenure: 5.6yrs
    • Compensation: AU$147.83k
  • Andrew Bolam

    Non-Executive Director

    • Tenure: 7.7yrs
    • Compensation: AU$145.09k
  • Carolyn Colley

    Independent Non-Executive Director

    • Tenure: 0.5yrs
  • Ian Watt

    Independent Non-Executive Director

    • Tenure: 4.2yrs
    • Compensation: AU$134.14k

Company Information

Smartgroup Corporation Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Smartgroup Corporation Ltd
  • Ticker: SIQ
  • Exchange: ASX
  • Founded: 1999
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: AU$1.529b
  • Shares outstanding: 128.72m
  • Website: https://www.smartgroup.com.au

Number of Employees


Location

  • Smartgroup Corporation Ltd
  • 133 Castlereagh Street
  • Level 8
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SIQASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 2014
SIQCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 2014

Biography

Smartgroup Corporation Ltd provides specialist employee management services in Australia and internationally. It operates through Outsourced Administration (OA); Vehicle Services (VS); and Software, Distri ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/21 10:39
End of Day Share Price2019/09/20 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.