Key Highlights

• Smartgroup reported H1 2026 Revenue of $179.5 million, up 13%, with operating EBITDA rising 16% to $73.8 million and a 41% EBITDA margin.

• Battery electric vehicles accounted for 68% of all new novated leasing orders during the half, with BEV orders increasing 162%.

• The company declared an Interim Dividend of 21.5 cents per share, fully franked, a 10% increase over the prior corresponding period.

Shares of Smartgroup Corporation Ltd (ASX:SIQ), a leading employee services and fleet solutions provider, were trading at A$11.425 during the session on 05 November 2026, up 1.11%. The S&P/ASX 200 (XJO) advanced 2.61%, adding 230.60 points to 9,065.10, while the S&P/ASX 200 Industrials index (XNJ) rose 2.21%, gaining 182.50 points to 8,422.80. Overnight Wall Street gains following a decisive Democratic victory in the U.S. midterm elections provided a positive backdrop for global equities. Smartgroup delivers salary packaging, novated leasing, and fleet management services to more than 500,000 active customers across Australia.

Record H1 2026 Financial Performance

On 27 August 2026, Smartgroup released its half-year results for the six months ended 30 June 2026. Revenue increased 13% to $179.5 million, with operating EBITDA rising 16% to $73.8 million. The EBITDA Margin expanded one percentage point to 41%. Net profit after tax adjusted (NPATA) grew 11% to $42.4 million. The result was supported by continued growth in both novated leasing and salary packaging, along with disciplined cost management and Investment in digital capabilities. Operating Cash Flow of $50.8 million represented 120% of NPATA.

EV Adoption Driving Novated Leasing Growth

A defining feature of the half was the continued acceleration in battery electric vehicle (BEV) adoption within Smartgroup's novated leasing business. BEVs accounted for 68% of all new novated leasing orders during H1 2026, with BEV orders increasing 162% compared to the prior corresponding period. Plug-in hybrid vehicles accounted for 5%, while internal combustion engine vehicles represented 27%. New Lease vehicle orders increased 34%, and total novated leasing settlements rose 17%. At 30 June 2026, Smartgroup had 91,600 novated leasing customers, an increase of 11,600 year-on-year. The Australian Government's reaffirmation of the Electric Car Discount policy in May 2026 provided further certainty for the sector.

Salary Packaging and Fleet Expansion

Active salary packaging customers reached 518,000, an increase of 34,000 year-on-year, with 609,000 customers having used Smartgroup's packaging services over the preceding twelve months. In fleet management, the company reached 36,200 managed vehicles, representing 12% growth. Smartgroup continued to expand its automotive partner ecosystem, integrating novated leasing solutions into dealership networks to create additional customer Acquisition channels. The Partnership with Volkswagen Financial Services supports a capital-light fleet growth model.

About the Company

Smartgroup Corporation is an ASX-listed employee services provider specialising in salary packaging, novated leasing, and fleet management. The company operates primarily in the Australian market, serving a large base of eligible employees across government, healthcare, not-for-profit, and corporate sectors. Its digital platform enables salary packaging and vehicle leasing transactions, with the company generating revenue from administration fees, leasing margins, and fleet management services.

Sector Context

The industrials sector on the ASX advanced on 05 November 2026, with the Industrials index gaining 2.21%. The transition to electric vehicles has been a structural driver for the novated leasing industry in Australia, supported by government policy settings including the Electric Car Discount and Fringe Benefits tax exemptions for eligible zero and low emissions vehicles. Companies positioned at the intersection of employee benefits and the EV transition have experienced elevated customer acquisition activity.

Risks

The elevated pace of BEV adoption during H1 2026 may moderate, with management noting that Demand trends have slowed from their peak levels. Changes to the Electric Car Discount policy or fringe benefits tax exemptions could affect the attractiveness of novated leasing for EVs. Competitive pressures from other salary packaging and leasing providers, along with potential shifts in residual values for leased vehicles, present additional considerations.

Catalysts on Watch

Smartgroup has indicated a target of achieving EBITDA margins in the mid-40s range during 2027 as its transformation program progresses. The continued expansion of automotive partnerships with dealership networks and manufacturers may provide additional customer acquisition channels. Growth in the fleet management Business and digital platform enhancements could support revenue diversification.

What It All Means

Smartgroup's H1 2026 results reflected a business benefiting from the intersection of employee benefits services and Australia's EV adoption curve. The 162% increase in BEV leasing orders and 16% EBITDA growth illustrate the company's positioning in a market where government policy settings remain supportive. With 518,000 active packaging customers, expanding fleet management operations, and a target for mid-40s EBITDA margins by 2027, Smartgroup continues to scale its digital platform across the employee services sector.