Smartgroup Fair Value Reduced to Reflect Cash Cost of Retaining Staff

Smartgroup provides employee management services, with salary packaging, novated leasing, fleet management, and software solutions as the key offerings. Together with McMillan Shakespeare, it is an oligopoly in Australia’s salary packaging market, and has a sizable presence in the novated leasing market. Entities in the government, healthcare, not-for-profit, and education industries make up 97% of Smartgroup’s client base. These industries are defensive, typically comprise low- to middle-class workers, and have favorable fringe benefits tax exemptions. They are regular users of Smartgroup’s services, and underpin the firm's steady revenue.