McMillan Shakespeare Limited · ASX:MMS
McMillan Shakespeare — Morgan Stanley 2011 Emerging Companies Conference
16 slides from McMillan Shakespeare's conference presentation, June 2011
Slide 1: MMS Group Morgan Stanley 2011 Emerging Companies Conference Presentation
MMS Group Morgan Stanley 2011 Emerging Companies Conference Presentation June 2011
Slide 2: Company Overview
Page 2 Morgan Stanley 2011 Emerging Companies Conference Presentation Company Overview MMS is a unique provider of workplace benefits and vehicle solutions in Australia. Fleet management business of Interleasing Australia acquired in April 2010. The combined business provides salary packaging admini
Slide 3: Financial highlights 1HFY11
Page 3 Morgan Stanley 2011 Emerging Companies Conference Presentation Financial highlights 1HFY11 Consolidated NPAT of $20.5m. NPAT and EPS growth of 83% on PCP. Group Remuneration Services NPAT of $15.0m or 35% growth. Asset Management NPAT of $6.6m. Interim dividend of 16 cents per share (10 cents
Slide 4: Financial History
Page 4 Morgan Stanley 2011 Emerging Companies Conference Presentation Financial History FY05 FY06 FY07 FY08 FY09 FY10 $’000 $’000 $’000 $’000 $’000 $’000 Total revenue 35,838 48,721 54,536 66,624 77,259 131,021 Normalised pre tax profit from continuing operations 7,915 15,013 19,079 24,919 28,912 39
Slide 5: What is salary packaging?
Page 5 Morgan Stanley 2011 Emerging Companies Conference Presentation What is salary packaging? Australia’s taxation system allows tax concessions for certain employee benefits and for certain industry sectors which makes salary packaging attractive. Eligible employees increase their disposable inco
Slide 6: Tax benefits from salary packaging
Page 6 Morgan Stanley 2011 Emerging Companies Conference Presentation Tax benefits from salary packaging Yearly benefit schedule Yearly benefit schedule PBI $16,050 Health $9,095 Benefit Benefit 7,000 4,500 6,000 4,000 3,500 5,000 3,000 4,000 $ 2,500 $ 3,000 2,000 1,500 2,000 1,000 1,000 500 0 0 35,
Slide 7: What is a novated lease?
Page 7 Morgan Stanley 2011 Emerging Companies Conference Presentation What is a novated lease? Enables employees to finance and operate a personal vehicle using their pre-tax income. A three way agreement between financier, employee and employer. Employee enters into a lease directly with the financ
Slide 8: Federal Budget changes
Page 8 Morgan Stanley 2011 Emerging Companies Conference Presentation Federal Budget changes Annual distance travelled (km) 0 – 15,000 15,000 – 25,000 25,000 – 40,000 Over 40,000 Current statutory fraction 0.26 0.20 0.11 0.07 New rates – 10 May 2011 0.20 0.20 0.14 0.10 New rates – 1 April 2012 0.20
Slide 9: Tax benefits from novated leasing
Page 9 Morgan Stanley 2011 Emerging Companies Conference Presentation Tax benefits from novated leasing Cost of motor vehicle $33,600 Taxable income prior to packaging $80,000 Per annum benefit Kms Running costs Grandfathered 11-May-11 01-Apr-12 01-Apr-13 01-Apr-14 10,000 $15,600 $2,600 $3,200 $3,20
Slide 10: Why is the novated lease market growing?
Page 10 Morgan Stanley 2011 Emerging Companies Conference Presentation Why is the novated lease market growing? Relatively young <20 year old. In the majority of cases a novated lease provides a more cost effective outcome than using post tax income. Allows vehicle to be purchased without the paymen
Slide 11: Remuneration services income streams
Page 11 Morgan Stanley 2011 Emerging Companies Conference Presentation Remuneration services income streams Salary packaging administration fees: - annuity income stream; paid directly and regularly from employees’ salary. Interest income. Facilitation and procurement fees for assisting with novated
Slide 12: Asset Management
Page 12 Morgan Stanley 2011 Emerging Companies Conference Presentation Asset Management Financing and management services associated with motor vehicles, commercial vehicles and equipment. A financier can provide funding but this ignores the management of the asset during its life. Fleet Management
Slide 13: The Asset Life Cycle
Page 13 Morgan Stanley 2011 Emerging Companies Conference Presentation The Asset Life Cycle In-Life Procurement Finance Disposal Services Purchase the Owned, Operating Fuel, insurance, Sale of the asset – vehicle / asset lease, finance maintenance, tyres, auction, dealers, – preferred lease, CHP, ch
Slide 14: Income Streams
Page 14 Morgan Stanley 2011 Emerging Companies Conference Presentation Income Streams Income Streams Income streams – more than interest margin! Management fees & Disposal Finance Finance – brokerage / interest 34% 33% margin. Management fees and disposal income. Procurement & In-Life Services Procu
Slide 15: Managing Residual Value Risk
Page 15 Morgan Stanley 2011 Emerging Companies Conference Presentation Managing Residual Value Risk Residual Values are set for term and kilometres by a Residual Value Committee. Proactive contract re-writes are undertaken to mark-to-market residual values where vehicle usage varies to that at incep
Slide 16: Case Study Public Hospital
Page 16 Case Study Public Hospital Morgan Stanley 2011 Emerging Companies Conference Presentation NIM Mgt fees Card fees Equipment finance and management Admin fee Meal entertainment Exempt – Cap $17k NIM Mgt fees Commission RV Admin fee Mgt fee Commission Tool of trade operating lease Admin fee Nov
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