Why Industrials Chrysos (ASX:C79) and McMillan Shakespeare (ASX:MMS) Need Different Valuation Lenses Beyond the S&P/ASX 200

Meta Category: Industrials

Chrysos Corporation (ASX:C79) and McMillan Shakespeare (ASX:MMS) ended FY26 with almost identical EBITDA margins, about 31 per cent and 30 per cent. Yet Chrysos turned its $27.2 million of EBITDA into just $1.8 million of net profit, while McMillan Shakespeare converted $180.7 million into $106.7 million.

That gap is the short answer to the headline. Both sit in the industrials sector and outside the S&P/ASX 200, but one is a capital-hungry technology rollout valued on growth and contracted units, and the other is a cash-generative services Business whose shareholders look first at Earnings and dividends.

Two industrials, two very different machines

Chrysos, based in Adelaide, leases PhotonAssay units to miners and laboratories. The machines use high-energy X-rays to measure gold and other elements in ore samples, replacing traditional fire assay. Chrysos builds and owns the units, so each deployment requires Capital before any Revenue arrives.

McMillan Shakespeare, known as MMS, administers salary packaging and novated leases for employers, manages vehicle fleets, and provides plan management for National Disability Insurance Scheme (NDIS) participants. A novated Lease is a three-way arrangement in which an employer deducts car costs from an employee's pre-tax salary. MMS earns administration fees and commissions rather than owning a large asset base.

What Chrysos reported for FY26

Chrysos released its FY26 results on 11 August 2026 for the year to 30 June 2026. Revenue rose 33 per cent to A$88.1 million and EBITDA (earnings before interest, tax, Depreciation and amortisation) rose 68 per cent to $27.2 million. Operating cash inflow was $17.9 million.

Revenue comes in two layers. Minimum monthly assay payments, contracted floors under each lease, grew 12 per cent to $62.5 million. Additional assay charges, earned when customers process more samples than the minimum, jumped 153 per cent to $25.5 million.

The company's 2026 Annual Report shows 46 units deployed at 30 June, up from 39 a year earlier, with 83 units under contract or committed. Chrysos signed 24 lease agreements during FY26, plus four more after balance date.

Statutory net profit after tax was $1.79 million, reversing an $8.22 million loss in FY25. Capital Expenditure was $41.0 million, and the company ended the year with $25.9 million cash and $140 million undrawn from a new $200 million syndicated Debt facility.

For FY27, management has guided to revenue of $108 million to $118 million and EBITDA of $35 million to $42 million.

What McMillan Shakespeare reported for FY26

MMS published its FY26 results announcement on 28 August 2026, also for the year to 30 June 2026. Revenue rose 6.8 per cent to $602.1 million, EBITDA rose 14.1 per cent and underlying net profit after tax and Amortisation (UNPATA) rose 13.8 per cent to $107.9 million.

The results presentation shows the salary packaging and novated leasing segment, Group Remuneration Services, doing most of the work. Its UNPATA rose to $82.5 million from $66.0 million, with novated leases reaching 90,000 and salary packages 402,000. Asset management UNPATA fell to $17.7 million, and plan and support services slipped to $9.8 million.

Shareholders received a final Dividend of 70 cents, fully franked, taking the full-year total to $1.32. Net debt was 0.4 times EBITDA. Chief executive Rob De Luca called FY26 "a record year for MMS".

Why the valuation lens differs

Our original comparison uses each company's reported FY26 figures. Dividing statutory net profit by EBITDA, Chrysos kept about 6.6 cents of profit for each dollar of EBITDA ($1.79 million ÷ $27.2 million). MMS kept about 59 cents ($106.7 million ÷ $180.7 million).

The difference lies below EBITDA. Chrysos depreciates a growing fleet of owned machines and paid $7.6 million in finance costs, according to its annual report. MMS carries far fewer owned assets, so most of its EBITDA reaches the bottom line.

Cash tells a similar story. By our calculation, Chrysos's Operating Cash Flow of $17.9 million minus capex of $41.0 million left a shortfall of about $23 million, funded partly by debt. That is normal for a company expanding its installed base, but it means earnings-based measures such as the price-to-earnings ratio say little about Chrysos today.

For Chrysos, more informative measures include Enterprise value to EBITDA, units deployed, contracted Backlog and growth in additional assay charges. For MMS, profit, dividend payout and return on capital are more meaningful. By our calculation, the $1.32 dividend is about 85 per cent of underlying Earnings Per Share of $1.55. MMS reported return on capital employed of 62.1 per cent.

Where each business is exposed

Chrysos depends on Mining activity, and additional assay charges rise and fall with sample volumes. The annual report flags geopolitical risk in several African countries, supply-chain disruption from Middle East conflict, and the risk that contracts are cancelled before units are deployed. The 37 contracted units not yet deployed represent future revenue, but only once they are built and installed.

MMS relies heavily on novated leasing, which has benefited from the Fringe Benefits tax (FBT) exemption for eligible electric vehicles. Any change to that policy would matter to the largest segment. The plan and support services business is exposed to NDIS reforms, and the asset management arm has seen profits ease.

Limits of the comparison

Both companies share a 30 June year-end, which helps. However, MMS reports an underlying measure, UNPATA, that excludes certain items, while Chrysos's EBITDA is a non-IFRS measure. The businesses also differ greatly in size, with MMS revenue nearly seven times larger.

Neither index status nor sector label explains either company's economics. Both are classified in the industrials sector, but iShares holdings data dated 24 September 2026 show MMS in the S&P/ASX Small Ordinaries, while Chrysos is not included.

Signposts for the months ahead

For Chrysos, the key indicators are the pace at which contracted units are deployed and whether FY27 revenue and EBITDA track within guidance. Growth in additional assay charges will show how intensively customers use each unit.

For MMS, the notice of meeting confirms its Annual General Meeting on 23 October 2026 in Melbourne. Beyond that, novated lease volumes, the policy settings for electric vehicles and the trajectory of the NDIS-linked segment are worth monitoring.