McMillan Shakespeare gains as brokers remain positive despite contract loss

McMillan Shakespeare

12/12/2023 03:59

(Updates with Citi comments)
    ** Shares of Australia's McMillan Shakespeare  MMS.AX  rise
as much as 3.7% to A$17, set for their biggest intraday jump
since Oct. 25, if gains hold
    ** Macquarie says despite losing recent South Australian
govt contract, market conditions around motor vehicle leases
remain favourable for novated leasing firm
    ** Novated lease is a motor vehicle lease whose obligations
have been transferred from one party to another
    ** Citi expects co's novated volume rise in 1Q24 to continue
into Q2
        ** Sees further growth ahead for co as awareness of
novated leasing continues to build in local market; retains
"buy"
  
    ** The govt contract represented around 38,000 salary
packaging arrangements, which contributed around A$16.3 mln
($10.74 mln) to co's Group Remuneration Services' unit's FY23
revenue
    ** Macquarie says market factors remain attractive with
increased motor vehicle supply and policy-driven demand for MMS'
services 
    ** Maintains "outperform" rating
    ** Stock has risen 22.2% this year, as of last close 


($1 = 1.5181 Australian dollars)

 (Reporting by Megha Rani in Bengaluru)