Annual
Report
2023
The McMillan Shakespeare Group is a provider of salary
packaging, novated leasing, disability plan management
and support co-ordination, asset management and
related financial products and services.
Through its subsidiaries, it offers a breadth of services
and expertise, designed to responsibly deliver long-
term value to its customers. The Group employs a highly
committed team of c.1,300 people across Australia,
New Zealand and the United Kingdom and domestically
manages programs for some of the largest public sector,
corporate and charitable organisations.
Annual General Meeting
The Annual General Meeting of the members of McMillan Shakespeare Limited
A.B.N. 74 107 233 983 will be held virtually and in person on 27 October 2023 at 10.00am.
Please refer to the AGM notice for further details.
mmsg.com.au
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Contents
Chair and Chief Executive Officer’s Joint Report
Our Strategy
Directors’ Report
2
6
7
Financial Report
Directors’ Declaration
Auditor’s Independence Declaration
Independent Audit Report
Shareholder Information
Corporate Directory
7
Directors
8
Directors’ meetings
9
Principal activities
9
Results
9
Dividends
10
Review of operations – Group
12
Segment review
14
Outlook
Risk management and key business risks
14
Directors’ experience and special responsibilities 18
19
Company Secretary
20
Remuneration report
36
Unissued shares
36
Directors’ interests
36
Change of auditor and non-audit services
36
Events occurring after the reporting date
37
Environmental regulations
37
37
37
37
38
Indemnification and insurance
Corporate governance practices
Auditor’s independence declaration
Directors’ declaration
Five year summary
39
40
41
95
101
103
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Chair and Chief Executive Officer’s
Joint Report
Underpinned by our clear strategy to deliver sustainable
growth and further simplification of the Group’s business,
the McMillan Shakespeare (MMS) Group delivered Normalised1
UNPATA of $86.2 million2, up 3% and Normalised earnings per
share (EPS) of $1.196 cps up 10.5%. A full year fully franked
dividend of 124 cents per share up 14.7% was declared.
Dear Shareholders,
On behalf of the McMillan Shakespeare (MMS, the Group or
Company) board of directors, management team and staff,
we are pleased to present the 2023 MMS Annual Report.
In FY23 we delivered growth in our normalised financial
and operating performance as the Group focussed on the
customer, a set of clear strategic priorities and simplifying
our portfolio of businesses with the divestment of our
Aggregation business and an agreement to divest our
UK businesses subsequent to FY23 year-end. This focus
enabled the Group to cement its market leadership position
in both salary packaging and novated leasing during the
period whilst helping to position our more streamlined
portfolio for future growth.
The Group’s financial performance in FY23 saw the
achievement of customer growth in all three of our segments,
and the advancement of our service offering to capture
future opportunities particularly with regard to our customers’
transition to Electric Vehicles (EVs).
Our performance reflected the benefit of rising interest rates
upon the Company’s salary packaging float, higher interest cost
due to the new corporate debt facility to support working capital,
increased wage pressure and investment in personnel to support
higher order levels and elevated carryover, and the continued
constraint in vehicle supply together with an economic
environment seeing increasing cost of living pressures for our
customers. We note that during these times of heightened
consumer cost pressures our services take on increased
relevance for our customers as they seek to maximise their
after-tax income via our salary packaging services in particular.
Importantly, during FY23 we introduced our clear strategy
to deliver sustainable growth. In support of our strategy,
we initiated our “Simply Stronger” program during the year.
The program across the FY23 – FY25 years, has three key
deliverables – firstly to deliver superior digital experience and
solutions for our customers; secondly to enhance technology-
enabled productivity; and thirdly to leverage competency-led
solutions to support and enable greater growth across our
businesses.
1 Normalised refers to adjustments made for the negative earnings transitional period for the implementation of the funding warehouse, Onboard Finance
(“Warehouse”). It normalises for the Warehouse’s in year operating and establishment expenses and for an adjustment for current commissions that
would have otherwise been received in period had the sales been financed via a principal and agency funder rather than through the Warehouse.
Normalised financials are stated for FY23 and FY22 (for comparative purposes) and are currently expected to be stated up to and including FY25.
2 Financial information includes discontinued operations relating to assets held for sale unless otherwise stated.
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Normalised Financial
Performance Growth
Clear Strategic
Priorities
As previously mentioned, during the year we announced
our clear strategy and priorities aimed at achieving our
vision of being a highly trusted partner, providing solutions
in making complex matters simple.
This strategic ambition has clear intent to deliver increased
productivity, continuing to drive customer advocacy through
strong Net Promoter Scores (NPS), whilst also generating
high ROCE and EPS growth. This will be achieved through
three strategic priorities:
Excelling in customer experience
Our first strategic priority aims to enable our business
segments to excel in digital and insights-led customer
experience. Our progress during FY23 included the
furthering of our digital programs to enable greater
personalised experience to support customer growth, the
launch of new digital dashboards for our PSS customers,
support coordinators and service providers, and the
introduction of Fleet Inspect a centralised digital solution
providing fleet managers with visibility of the condition
of their fleet throughout the life of vehicle leases.
Driving technology enabled productivity
Our second strategic priority aims to transform our use of
technology to reduce our cost to serve. In FY23 this has
seen us introduce the use of Application Programming
Interfaces (APIs) within our PSS segment, enable further
productivity improvements through enhancement of
AMS’s proprietary OneView system and Optical Character
Recognition technology, whilst we also concentrated on
the strength and rigour of our cyber security posture.
Competency-led solutions
Our third strategic priority aims to leverage our culture,
capabilities and experience to enhance value. During FY23
our GRS segment made substantial progress on new
EV novated lease products to enable customers to take
advantage of the Federal Government’s EV Bill, and within
our AMS segment we launched a new ‘On the Go’ EV charge
card and a driver vehicle charging app to support client and
driver EV needs.
In FY23, Group Net Profit After Tax (NPAT) was $32.3m which
represents a decrease of 54.1% on FY22. Group Normalised
UNPATA of $86.2m grew by 3% on the previous period and
Normalised revenue increased by 5.3% to $625.6m. Our
normalised Return on Capital Employed (ROCE) improved
to 40.0%, up from 38.6%, while Normalised EPS grew by
10.5% to 119.6 cents.
A key driver of this performance was our Group Remuneration
Services (GRS) business, which achieved total Normalised
revenue of $232.8m for FY23, an increase of 12.7% on FY22,
whilst Normalised UNPATA for the segment grew by 8.5% on
the previous period to $52.5m.
Salary packages grew by 23,300, while novated lease units
increased by 2,500, taking the total numbers to 394,200
and 73,400 respectively.
This growth reflects the strength of our longstanding
relationships with clients, our continued focus on evolving
our offering and improving the customer experience, the
onboarding of several new client wins achieved in the FY22
financial year and the benefit of rising interest rates on funds
administered.
Our Plan and Support Services (PSS) business achieved
UNPATA of $8m, an improvement of 21.3% on FY22. This
was driven by continued customer growth and margin
expansion following further investment in our scalable platform
for future growth while also supporting scheme outcomes,
integrity and sustainability. By period end the business
achieved 22.8% growth in total customers to 31,771 as use
of Plan Management services across the National Disability
Insurance Scheme (NDIS) continued to rise.
We made progress simplifying the Asset Management
Services (AMS) portfolio, selling the Aggregation businesses
on 31 July 2023 and also on 22 August 2023 signing an
agreement with a consortium of funders predominantly
associated with and including Praetura Group (UK) to divest
the UK businesses with net proceeds of approximately $20m.
The UK businesses sale is subject to limited conditions and
expected to close in the first half of FY24. These businesses
have been classified as discontinued operations relating to
assets held for sale in our financial statements and are no
longer part of the AMS segment and a $43m impairment in
relation to these assets is included in our FY23 NPAT.
Our AMS segment achieved UNPATA of $18.7m in FY23,
an increase of 4% on last period. This was driven by an
increase in net amount financed (NAF) and ongoing elevated
remarketing yields, moderated by a 1% increase in the written
down value of assets under management resulting from the
ongoing new vehicle supply constraints and the weakening of
used vehicle pricing whilst still remaining at elevated levels.
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Chair and Chief Executive Officer’s
Joint Report
Our Role in Australia’s
Transition to Electric Vehicles
The passage of the Treasury Laws Amendment (Electric
Car Discount) Bill 2022 (the Bill), which exempts certain
non-luxury zero and low emissions vehicles from Fringe
Benefits Tax (FBT), resulted in significantly elevated
activity during FY23 from customers seeking an EV.
This legislation, focussed specifically on employer
provided low and zero emissions vehicles, aims to
remove one of the key barriers for Australians when
considering switching to an EV – their traditionally
higher price over similar vehicles with an internal
combustion engine.
Since the Bill was legislated on 12 December 2022 and
supported by our increased focus on this transition, we
experienced a significant rise in interest and orders for
EVs, which comprised 12.3% of our total novated lease
orders across the FY23 period, up from just 3% in FY22.
In particular, interest in EVs gained significant momentum
throughout the second half of FY23, with the largest
number of EV novated lease orders achieved in June
2023 at 21.4% of all lease orders.
We are excited by this opportunity, and we will work to
support our clients and customers looking to transition
to EVs across our GRS and AMS businesses.
Capital Management
Consistent with our capital allocation framework, during
FY23 we completed a 10% off-market share buyback
at $11.66 per share, which incorporated a significant
franked dividend component.
We continued to progress our capital management
strategy through the ongoing implementation of Onboard
Finance, our warehouse funding initiative launched in
FY22, achieving our target of 20% of monthly volume of
leases financed in June 2023.
Our capital allocation framework remains unchanged
with our main priority to reinvest in the business in order
to deliver sustainable growth, after which we will fund
any strategic acquisitions, deleverage as appropriate,
before returning capital to shareholders as fully franked
dividends in the first instance and in alignment with our
dividend policy that aims to pay out between 70–100%
of Normalised UNPATA, depending on a number of
factors, including the ongoing investment and cash flow
required in the business.
Accordingly, a fully franked dividend of 124 cents
per share was delivered for the year inclusive of
the final dividend of 66 cents per share payable on
22 September 2023. This represents 100% of
Normalised UNPATA.
Our Commitment to Sustainability,
Environment and Accessibility
During the period we continued to deliver on our
Group Sustainability Strategy, which was introduced in
FY21 to provide a clear framework for driving positive
environmental and social outcomes for our stakeholders
and communities in which we operate. Our sustainability
strategy integrates with the provision of our services to
many of Australia’s frontline healthcare, not for profit,
public sector and emergency service workers as well
as individuals living with disability, and supporting the
transition to EVs.
Having already committed to reducing our own
operational carbon footprint to net zero by 2030,
during FY23 we developed a Climate Change Action
Plan which brings together in a clear framework, our
proposed actions to respond to climate-related risks and
opportunities over the next three years.
As a leading provider of novated leasing and fleet
management services, promoting the uptake of EVs
and supporting our customers in their transition to a
low carbon future remained a key focus during the
period. We successfully transitioned 35% of MMS’ own
Australian and New Zealand fleet to Battery Electric
Vehicles during the period.
We also continued to work on a range of initiatives
through our Accessibility and Inclusion Plan during FY23
to make our products, services and workplaces more
inclusive for people with disabilities. As Chair I volunteer
my time to mentor a leader with a disability as part of
the Australian Network on Disability Directing Change
Mentoring Program. Directing Change looks to advance
the governance knowledge of leaders with a disability
while building disability confident boardrooms.
Through our Reflect Reconciliation Action Plan, we
took a number of steps to contribute towards national
reconciliation, from building our own cultural awareness
to supporting economic opportunities for First Nations
communities through membership of Supply Nation,
which facilitates procurement through Indigenous
businesses.
As a result of our continued efforts with regards to
sustainability practices, our Morgan Stanley Capital
International Environment, Social and Governance (ESG)
Rating increased from BBB to A.
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Group-wide, the priority focus for FY24 will be continuing
to execute the Group’s clear strategy and specifically,
our “Simply Stronger” program. Over the course of the
program (FY23–FY25) we expect to invest $35m in
capital expenditure, with an expected commitment in
FY24 of ~$23m in capital expenditure, that are expected
to deliver returns beyond the program’s completion.
As we enter FY24 we do so as a trusted partner
with positions in large and growing markets and
with businesses that are well positioned to meet the
challenges and capture the opportunities that lie ahead.
We would like to especially thank our people for their
dedication to supporting our customers and embodying
our purpose of making a difference to people’s lives. We
also appreciate and thank our clients, customers and
shareholders for their ongoing support.
Helen Kurincic
Chair
Rob De Luca
Managing Director &
Chief Executive Officer
Board Succession
During FY23, Non-Executive Director and previous Chair,
Tim Poole, departed MMS as previously announced. On
behalf of the Board, we thank Tim for his tremendous
commitment and outstanding contribution to the Group.
We welcomed Arlene Tansey, who joined the Board as
an independent Non-Executive Director effective
7 November 2022. Arlene is a highly experienced
director of ASX listed companies, high growth businesses
and government entities with a financial services
background in commercial and investment banking.
Arlene will stand for election at our 2023 AGM.
Focus and Outlook
Many of the market conditions experienced in FY23,
including potential further interest rate rises, inflationary
pressures and vehicle supply constraints, are expected to
carry into FY24. In this environment MMS, together with
its streamlined portfolio of businesses, is well positioned
to continue to execute its strategic priorities to deliver
sustainable growth.
Within our GRS business we will continue our focus
on key client renewals and tenders and to target 20% of
novated leases funded through Onboard Finance with
an estimated FY24 UNPATA normalisation adjustment of
~$12m. The strategic and financial benefits of Onboard
Finance include diversifying our funding sources,
increased annuity based income, a new source of
income and higher overall value (NPV) per transaction.
We also note the future expected benefit from novated
lease carry over revenue of $32.3m as at the end of
June 2023, continuing increased demand for low and
zero emissions vehicles, and further NDIS participant
growth within our PSS business. We will also continue
to consider inorganic opportunities within the plan
management sector.
The NDIS Independent Review, which is assessing
the design, operation and sustainability of the NDIS,
is scheduled to be completed by October 2023.
Importantly our Plan Management services are directly
supporting the NDIS objectives of providing choice
and control to participants and supporting the financial
integrity and sustainability of the Scheme.
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Our Strategy
Our Purpose
To make a difference to people’s lives
Our Vision
To be the trusted partner, providing solutions in
making complex matters simple
Our Common
Compentencies
Managing
E2B2C
relationships
Navigating
complexity
in regulated
environments
Leveraging
technology
and data
Claims and
payment
processing
at scale
Managing
benefit
arrangements
Our Strategic
Priorities
1
2
3
Excel in customer
experience
Technology-enabled
productivity
Competency-led
solutions
Excel in digital
and insights-
led customer
experiences to
enhance our
market position
Drive simplicity
and technology
enablement
to increase
productivity
Leverage our
culture and extend
our competency-led
solutions to
enhance value
Our Outcomes
Strong
NPS
Increase
Productivity
High
ROCE
Employer
of Choice
EPS
Growth
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Directors’ Report
The Directors of McMillan Shakespeare Limited
(MMS, the Group or Company) present this report on
the consolidated entity, consisting of the Company
and the entities that it controlled at the end of,
and during, the financial year ended 30 June 2023.
Details of the qualifications, experience and special
responsibilities of the Directors are set out on pages
18 and 19.
Independent Directors, as determined in accordance
with the Company’s definition of independence,
were independent as at 30 June 2023.
Directors
The Directors of the Company during the whole
of the financial year and up to the date of this report
(Directors) are as follows:
Ms Helen Kurincic
(Independent Non-Executive Director)
Mr Bruce Akhurst
(Independent Non-Executive Director)
Ms Kathy Parsons
(Independent Non-Executive Director)
Mr Tim Poole
(Independent Non-Executive Director)
(resigned 31 August 2022)
Mr John Bennetts
(Non-Executive Director)
Mr Ross Chessari
(Non-Executive Director)
Ms Arlene Tansey
(Non-Executive Director)
(appointed 7 November 2022)
Mr Rob De Luca
(Managing Director and CEO)
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Directors’ Report
Directors’ meetings
The number of meetings held and attended by the board of Directors (Board) (including meetings of committees of the Board)
during the financial year ended 30 June 2023 were as indicated in the table below.
Director
Ms H. Kurincic (Chair)
Mr R. De Luca (Managing Director and CEO)
Mr B. Akhurst
Ms K. Parsons
Mr J. Bennetts
Mr R. Chessari
Ms A. Tansey
Mr T. Poole
Director
Ms H. Kurincic (Chair)
Mr R. De Luca (Managing Director and CEO)
Mr B. Akhurst
Ms K. Parsons
Mr J. Bennetts
Mr R. Chessari
Ms A. Tansey1
Mr T. Poole
1 Ms A Tansey was appointed to the Nomination Committee 15 May 2023.
Board Meetings
Audit, Risk & Compliance
Committee Meetings
Eligible to
Attend
Attended
Eligible to
Attend
Attended
20
20
20
20
20
20
9
7
20
20
20
20
20
20
9
7
11
-
11
11
-
-
5
4
11
-
10
11
-
-
5
4
People, Culture and
Remuneration Committee
Nomination
Committee
Eligible to
Attend
Attended
Eligible to
Attend
Attended
4
-
4
4
-
-
1
2
4
-
4
4
-
-
1
2
2
-
2
-
-
-
1
-
2
-
2
-
-
-
1
-
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Principal activities
The principal activities of the Company and its controlled entities were the provision of salary packaging, novated leasing,
disability plan management and support co-ordination, asset management and related financial products and services.
In the opinion of the Directors, there were no significant changes in the nature of activities of the Company and its controlled
entities during the course of the financial year ended 30 June 2023 that are not otherwise disclosed in this Annual Report.
Results
The Group’s profit after income tax for the year amounted to $32,272,419 (2022: $70,348,376). Refer to the Chair and Chief
Executive Officer’s Joint Report and the Review of Operations on page 10 for further commentary.
Dividends
Dividends paid by the Company during the financial year ended 30 June 2022 are as follows:
Dividends
Final dividend for the financial year ended 30 June 2022
of 74 cents (2021: 31.1 cents) per ordinary share
(2022: fully-franked at the tax rate of 30%)
2023
2022
$51,535,838
$24,065,527
Interim dividend for the financial year ended 30 June 2023
of 58 cents (2022: 34 cents) per ordinary share paid on
24 March 2023 fully-franked at the tax rate of 30% (2022: 30%)
$40,392,954
$26,309,576
Total
$91,928,792
$50,375,103
Subsequent to the financial year ended 30 June 2023, the Directors declared a final dividend of 65.9 cents per ordinary
share (2022: 74 cents per ordinary share) (fully franked at the tax rate of 30%) to be paid on 22 September 2023, bringing
the total dividend to be paid for the financial year ended 30 June 2023 to 124 cents per ordinary share (2022: 108 cents
per ordinary share).
Ex-dividend date
Record date for determining entitlements to the dividend
Dividend payment date
7 September 2023
8 September 2023
22 September 2023
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The passage of the Treasury Laws Amendment (Electric Car
Discount) Bill 2022 on 12 December 2022, which exempts
certain non-luxury zero and low emissions vehicles from
FBT, resulted in elevated inquiry and activity during FY23
from customers seeking an EV, with demand significantly
increasing through the period.
We made progress simplifying the Asset Management
Services (AMS) portfolio, selling the Aggregation businesses
on 31 July 2023 and also on 22 August 2023 signing an
agreement with a consortium of funders predominantly
associated with and including Praetura Group (UK) to divest
the UK businesses with net proceeds of approximately $20m.
The UK businesses sale is subject to limited conditions and
expected to close in the first half of FY24. These businesses
have been classified as discontinued operations relating to
assets held for sale in our financial statements and are no
longer part of the AMS Segment.
Consistent with the stated capital strategy, the Company also
completed a 10% off market share buyback, which included
a significant franked dividend component, in October 2022 at
$11.66 per share for a total cost of $90m.
Directors’ Report
Review of operations – Group
MMS delivered ongoing growth in normalised financial and
operating performance in FY23 as the Group focussed on
the customer, a set of clear strategic priorities announced
during the period and simplifying its portfolio of businesses
to reinvest capital for future growth.
The Group’s clear strategy introduced during FY23, aims to
deliver sustainable growth by focussing on three priorities:
1. Excelling in customer experience:
Excel in digital and insights-led customer experience
to enhance our market position;
2. Driving technology-enabled productivity:
Drive simplicity and technology enablement and
transformation to increase productivity; and
3. Delivering competency-led solutions:
Leverage our culture and extend our competency-led
solutions to enhance value.
The Group’s focus on the customer and in particular the
emerging uptake and interest in EVs, together with further
NDIS participant growth and continued elevated remarketing
yields saw MMS grow salary packages and novated leases
under management, NDIS plans managed, and Asset
Management’s net amount financed. The Group’s financial
performance also benefited from rising interest rates on the
Company’s salary packaging float.
This performance was achieved in the context of ongoing
wage inflation pressures, additional investment in people
to support service delivery to an expanded client base,
continued constrained vehicle supply and an economic
environment resulting in increasing cost of living pressures
for the Group’s customers. Noting that during these times
of heightened consumer cost pressures, our services take
on increased relevance for our customers as they seek to
maximise their after-tax income via our salary packaging
services in particular.
In addition, FY23 was a material year for the growth of the
Group’s funding warehouse, Onboard Finance (Warehouse),
which at 30 June 2023 had funded ~$100m of novated
leases and achieved the target of financing 20% of monthly
GRS novated lease volumes in June 2023.
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Group Financial Performance Summary
Continuing operations
Statutory revenue
Normalised Revenue1,2 ($m)
Normalised EBITDA1,2,3 ($m)
Normalised UNPATA1,2,4 ($m)
UNPATA1,4 ($m)
Statutory NPAT ($m)
Discontinued operations relating to assets held for sale
UNPATA3 ($m)
Statutory NPAT ($m)
Total operations
Normalised Revenue1,2 ($m)
Normalised EBITDA1,2,3 ($m)
Normalised UNPATA1,2,4 ($m)
UNPATA1,4 ($m)
Statutory NPAT ($m)
Normalised EPS1,2 (cents)
Total dividend per share (cents)
Return on capital employed5 (%)
2023
$’000
464,004
471,375
131,283
77,920
66,413
64,449
8,327
(32,177)
625,566
143,357
86,248
74,741
32,272
119.6
124.0
40.0%
20226
$’000
418,657
418,814
118,035
71,479
69,785
66,874
12,288
3,475
594,295
132,762
83,766
82,072
70,348
108.3
108.0
38.6%
Change
%
10.8%
12.5%
11.2%
9.0%
(4.8%)
(3.6%)
(32.2%)
<100%
5.3%
8.0%
3.0%
(8.9%)
(54.1%)
10.5%
14.8%
1.4pts
1 Normalised revenue, Normalised EBITDA, Normalised UNPATA, UNPATA and Normalised EPS are non-IFRS metrics used for management reporting.
The Group believes Normalised UNPATA and UNPATA reflects what it considers to be the underlying performance of the business.
2 Normalised refers to adjustments made for the negative earnings transitional period for the implementation of the funding warehouse, Onboard Finance
(“Warehouse”). It normalises for the Warehouse’s in year operating and establishment expenses and for an adjustment for current commissions that would have
otherwise been received in period had the sales been financed via a principal and agency funder rather than through the Warehouse. Normalised financials are
stated for FY23 and FY22 (for comparative purposes) and are currently expected to be stated up to and including FY25. Normalised impacts of FY23 revenue
$(7.4)m, EBITDA $(15.3)m, EBIT $(16.4)m and UNPATA of $(11.5)m and FY22 revenue $(0.2)m, EBITDA $(2.2m), EBIT $(2.1)m and UNPATA of $(1.7)m.
3 Earnings before interest, tax, depreciation (excluding fleet and warehouse depreciation) and amortisation (EBITDA) excludes the pre-tax impact of acquisition and
divestment related activities, and non-operational items otherwise excluded from UNPATA on a post-tax basis.
4 Underlying net profit after tax and acquisition amortisation (UNPATA), being net profit after tax but before the after-tax impact of acquisition and divestment related
activities, accounting standard changes and non-operational items.
5 Return on capital employed (ROCE), is based on last 12 months’ Normalised earnings before interest and tax (EBIT). Normalised EBIT is before the pre-tax
impact of acquisition and divestment related activities, accounting standard changes, and non-operational items otherwise excluded from UNPATA on a post-tax
basis. Capital employed (excluding lease liabilities) used in the calculations includes the add back of impairment of acquired intangible asset charges incurred in
the respective financial period and also includes add back for the Warehouse in FY22 and FY23.
6 FY22 comparatives in continuing operations include discontinued operations relating to assets held for sale.
7 The information presented in this Review of Operations has not been audited in accordance with the Australian Auditing Standards.
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Directors’ Report
Segment Review
Group Remuneration Services
Revenue
Normalised Revenue1,2
Normalised EBITDA1,2,3
Normalised UNPATA1,2,4
2023
$m
225.5
232.8
90.2
52.5
2022
$m
206.5
206.6
82.2
48.4
Variance
%
9.2%
12.7%
9.7%
8.5%
Refer notes on Group Financial Performance Summary table above.
GRS revenue growth was driven by a 13.3% increase in
novated lease sales, which were at a record high over the
period, an additional 23,300 salary packages and an uplift in
interest received from funds administered of $10.2m. Novated
lease sales momentum benefited from ongoing customer
and client focus, with total novated lease units rising by 3.6%
to a record 73,400. MMS is the market leader in both salary
packaging and novated leasing as at the period end.
During FY23 the number of novated lease orders for EVs
increased substantially to 12.3% of total orders, up from 1.7%
in FY22. Inquiry for EVs increased markedly through FY23,
with the highest number of orders in a month occurring in
June 2023, representing 21.4% of all novated lease orders.
The higher average cost of EVs over their internal combustion
engine equivalent contributed to an increase in novated NAF
and yields in FY23.
Whilst some stabilisation in vehicle supply occurred, ongoing
constraints and elevated order levels resulted in a continued
growth of novated lease orders carry over. Total carry over
revenue to benefit future periods as at 30 June 2023 was
$32.3m, up from $25.6m as at 30 June 2022.
Uplift in salary packages was underpinned by the transitioning
of new client wins achieved in FY22, including as the sole
provider of salary packaging and novated leases to the
Victorian Department of Education and Training, as well as
through the increased penetration of existing clients.
With select zero and low emissions vehicles exempt from FBT
whilst interest rates and cost of living pressures increased
through the period, more Australians sought to capitalise on
the value proposition of novated leasing an EV.
Increased GRS revenues were offset by investment in
personnel to support higher order levels, service levels and
elevated carryover, and the decision on wage increases as
well as costs associated with transitioning new clients which
will benefit future periods.
Asset Management Services (AMS)
.
Revenue
EBITDA1
UNPATA2
2023
$m
187.4
28.7
18.7
2022
$m
170.6
27.8
18.0
Variance
%
9.9%
3.3%
4.0%
Refer notes on Group Financial Performance Summary table above. FY22 comparatives exclude discontinued operations relating to assets held for sale.
The AMS segment benefited from a 4.1% increase in net
amount financed (NAF) and sustained remarketing yields with
revenues up 9.9% to $187.4m and UNPATA up 4% to $18.7m.
The Asset Written Down Value (WDV) of $320.8m
(including fleet assets funded utilising principal and agency
arrangements) was up 1% on FY22, reflecting the impact
of ongoing vehicle supply constraints.
With more organisations and governments seeking to
transition their fleets to EVs, the ANZ segment experienced
increased rates of inquiry regarding EVs during FY23.
A focus for the period was on implementing digital tools to
better manage customer interactions and ultimately provide
straight through processing efficiencies. During FY23 over
260 individual processes were managed through the OneView
platform, which facilitates the automation of management and
operational tasks, an increase of 20% on FY22. The increased
utilisation of Optical Character Recognition technology also
drove productivity improvements.
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MMS ANNUAL REPORT 2023 Plan and Support Services (PSS)
Revenue
EBITDA3
UNPATA4
Refer notes on Group Financial Performance Summary table above.
2023
$m
48.6
12.3
8.0
2022
$m
41.3
10.1
6.6
Variance
%
17.7%
21.3%
21.3%
PSS achieved strong customer growth and margin expansion
through the continued investment in building a scalable
platform and digital tools to enhance the customer experience.
Growth in segment revenue for FY23 was attributable to a
22.8% increase in plan management and support coordination
customers and a 21.5% increase in support coordination
billable hours.
A focus for FY23 was on improving systems and applications
functionality for both customers and suppliers to provide
greater insights into customer spending and payment
processing times. Enhancements were made to our customer
and service provider dashboards, aiming to provide our
customers with tools to help them better navigate the NDIS
and improve their outcomes, and providing enhanced
payments visibility and processing for providers in support of
scheme efficacy.
The Plan Tracker business, acquired by MMS in FY22, was
successfully migrated to a common technology platform
during the period. This significant milestone enables the
business to focus on delivering future efficiencies for the
segment whilst driving growth opportunities as the National
Disability Insurance Scheme’s (NDIS) participants are
projected grow to over a million by 2032.
During FY23 there were no structural adjustments via
indexing made by the NDIS to the pricing arrangements for
plan management supports to reflect the inflationary cost
environment in which such services are being delivered. The
NDIS has also experienced a general shift towards participants
receiving NDIS plan extensions rather than renewals as the
Scheme focuses on longer plan durations.
The impact of PSS’s ongoing focus on creating an accessible
and customer-centric experience was reflected in the
segment’s strong NPS of 59.
Discontinued operations relating to assets held for sale
Revenue
EBITDA3
UNPATA4
Refer notes on Group Financial Performance Summary table above.
2023
$m
154.2
12.1
8.3
2022
$m
175.5
14.7
12.3
Variance
%
(12.1%)
(17.9%)
(32.2%)
The Aggregation and UK businesses are classified as
discontinued operations relating to assets held for sale.
The sale of the Aggregation business completed on
31 July 2023 and on 22 August 2023 an agreement was
executed to divest the UK businesses.
Financial performance was impacted by the scheduled
run down of the Maxxia UK lease portfolio and increased
competition in the Australian Aggregation business’ market,
in part offset by growth in Anglo Scottish UK where NAF
increased 14.6%.
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MMS ANNUAL REPORT 2023 Directors’ Report
Outlook
Many of the market conditions experienced in FY23, including
potential further interest rate rises, inflationary pressures and
vehicle supply constraints, are expected to carry into FY24.
In this environment MMS, together with our streamlined
portfolio of businesses, is well positioned to continue to
execute its strategic priorities to deliver sustainable growth.
Within our GRS business we will continue our focus on
key client renewals and tenders and to target 20% of novated
leases funded through Onboard Finance with an estimated
FY24 UNPATA normalisation adjustment of ~$12m. The
strategic and financial benefits of Onboard Finance include
diversifying our funding sources, increased annuity based
income, a new source of income and higher overall value
(NPV) per transaction.
We also note the future expected benefit from our novated
lease carry over revenue of $32.3m as at the end of
June 2023, continuing increased demand for low and zero
emissions vehicles, and further NDIS participant growth
within our PSS business. We will continue to consider non-
organic opportunities within the plan management sector.
Group-wide, the priority focus for FY24 will be continuing
to execute the Group’s clear strategy and specifically, our
“Simply Stronger” program. Over the course of the program
(FY23–FY25) we expect to invest $35m in capital expenditure,
with an expected commitment in FY24 of ~$23m in capital
expenditure, that we expect to deliver returns beyond the
program’s completion.
As we enter FY24 we do so as a trusted partner with
positions in large and growing markets and with businesses
that are well positioned to meet the challenges and capture
the opportunities that lie ahead.
Risk Management and Key Business Risks
MMS maintains a Risk Management Framework to support
the identification, assessment, management, monitoring, and
reporting of internal and external sources of risk that could
impact on the Group’s operations and strategic objectives.
The Framework is based on the principles and guidelines
identified in Risk Management Standard AS ISO 31000:2018
and is underpinned by a proactive risk management culture.
Risk management is a continuous process that is
embedded within day-to-day operational activities of the
Group with active involvement of the Executive Leadership
Team and oversight from the Audit, Risk & Compliance
Committee (ARCC), and the Board. The Group’s Risk
Management Policy and Framework Statement and the
Board Audit, Risk and Compliance Committee Charter can
be found on the Company’s website: https://mmsg.com.au/
overview/#governance.
Outlined below are key risks to which the Group is exposed
together with the strategies employed to mitigate and manage
those risks. This is not an exhaustive list of all actual or
potential risks that may affect the Group.
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Key risks
Strategy and Growth
Macroeconomic environment
A downturn in economic conditions may affect
customer demand for our products and services,
our access to and cost of funding, and the financial
condition of our customers, partners, and suppliers,
resulting in an adverse impact to the Group’s
operations and/or financial performance.
Changes in government policy and regulation
Changes to government policy and regulation and
particularly those applicable to Financial Services,
the National Disability Insurance Scheme (NDIS),
taxation (including Fringe Benefits Tax (FBT)), and
Climate Change may have an adverse impact on the
Group’s operations and/or financial performance.
Global motor vehicle supply chain dynamics
Disruption or capacity constraints within the global
motor vehicle supply chain may affect business
segment sales volumes and customer order
backlogs, resulting in an adverse impact to the
Group’s financial performance.
Risk management strategy
– Regular monitoring of the external environment including
the economic outlook to inform strategic planning, portfolio
management, and corporate treasury activities.
– Active management of credit, residual value, liquidity, funding,
and interest rate risks in line with policies approved by the
Board.
– Ongoing oversight of the Group’s financial risk profile by the
Executive Credit, Residual Value and Interest Committees.
– Business model and client diversification to reduce reliance on
any single business segment and/or client relationship.
– Regular monitoring of regulatory change and industry
developments.
– Proactive engagement across governments and regulators,
including making submissions relating to proposed changes in
laws, regulatory and licensing environments which may impact
the Group.
– Active participation and support of peak industry bodies such
as NALPSA and Disability Intermediaries Australia.
– Business model diversification and development of products
and services to support clients and customers transition to
electric vehicles.
– Maintain a strategic approach to procurement including
strengthening and broadening of our relationships with supply
chain partners and dealer groups.
Competition and customer contracts
The Group’s businesses are affected by competing
suppliers of salary packing, leasing, financing, and
NDIS plan management and support coordination
products and services. A sustained increase in
competition from existing competitors, new entrants
or disruptors, or loss of a material client contract(s),
may result in a failure to grow and/or loss of market
share or revenues in some segments.
– Focus on continual improvement in product and service
offerings to attract and retain customers, including client
engagement and relationship management, delivering high
levels of customer service, and ongoing product and digital
innovation.
– Ongoing monitoring of market trends (e.g., customer,
competitor and technology) and disciplined approach to pricing.
– Business model and client diversification to reduce reliance on
any single business segment and/or client relationship.
Transformation and delivery of strategic initiatives
The Group’s growth strategy is underpinned by a
comprehensive transformation program aimed at
delivering innovation of products and services, and
productivity benefits, through digitisation. These
initiatives may not be delivered in line with the
planned scope, timeline, or budget, and/or the
anticipated benefits may not be realised.
– Chief Transformation Officer appointed, and Group
Transformation Office established.
– Development and implementation of Project and Organisational
Change Frameworks, Methodologies and Tools.
– Transformation initiatives overseen by project steering
committees and the Executive Program Governance
Committee.
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Directors’ Report Directors’ Report
Key risks
Risk management strategy
Financial and Balance Sheet Risks
Funding and liquidity
An inability to access equity capital, maintain debt
funding on acceptable terms and/or effectively
manage cashflows could have a material
adverse impact on the Group’s operations,
financial condition and performance. In addition,
changes in stakeholder expectations in relation
to environmental, social, and governance (ESG)
practices may adversely impact the Group’s ability
to access capital or financing in the future.
Interest rates and credit spreads
The Group’s competitive position and financial
performance may be impacted by fluctuations in
interest rates and credit spreads which affect the
interest income earned on assets, the interest paid
on liabilities, and create upward pressure on pricing.
– Active management of funding and liquidity risk including
diversification of funding sources and adherence to financial
covenants in line with policies approved by the Board.
– Ongoing oversight of liquidity and funding risk profile by the
Executive Interest Committee.
– The Group has adopted a Sustainability Framework, with
various activities and programs in place aligned with the
Group’s material ESG topics.
– Active management of interest rate risk including asset and
liability matching and hedging strategies in line with policies
approved by the Board.
– Ongoing oversight of the Group’s interest rate risk profile by
the Executive Interest Committee.
– Maintain diversity of funding channels to maintain market
competitive pricing for our customers.
Credit and residual values
The Group’s financial condition and performance may
be affected by counterparties defaulting on their lease
obligations and/or if leased assets can only be resold
or re-leased at price below their residual value.
– Active management of credit and residual value risk through
underwriting, pricing, portfolio management practices, and
stress testing in line with policies approved by the Board.
– Ongoing oversight of credit and residual value risk profile by
the Executive Credit and Residual Value Committees.
Operations and Service Delivery
Technology, data availability, and integrity
A failure or disruption of information technology
services (including infrastructure, hardware, software,
digital platforms) and/or the availability and integrity
of data could have a material adverse impact on
the Group’s reputation, operations and financial
performance.
Cybersecurity, data protection, and privacy
A cyber incident could disrupt the Group’s operations
and result in the loss or compromise of information
assets. In addition, any unauthorized disclosure or
misuse of confidential information and/or a failure
to maintain adequate data protection and privacy
controls may have an adverse impact on the Group’s
reputation, operations and financial performance.
– The Group’s Technology and Digital team dedicate resources,
systems, and technical expertise to the mitigation of technology
and data risks.
– Ongoing oversight of technology risk by the Information &
Communication Technology Risk Committee and the
Executive Risk and Compliance Committee.
– Crisis management framework in place incorporating business
continuity plans, disaster recovery plan, and cyber security
incident response plan.
– Active management of cyber security risk through policies,
technical controls, operating procedures, and awareness and
training in line with policies approved by the Board.
– A dedicated Cyber Security Team is tasked with protecting
key information assets, identifying, and effectively responding
to threats. Support arrangements for cyber incident response
and recovery are also in place.
– The Group holds a cyber insurance policy.
– The Group maintains a privacy compliance framework
including a Privacy Policy, supporting procedures, training,
and other controls including regular internal monitoring of
privacy process compliance.
– Ongoing oversight of the Group’s cybersecurity, data
protection and privacy compliance risk profile by the
Executive Risk and Compliance Committee and the Board
Audit, Risk and Compliance Committee.
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Key risks
Risk management strategy
Operations and Service Delivery (cont.)
Key suppliers
A sustained interruption or reduction in the quality
of the products and services that are provided by
our key suppliers may have an adverse impact on
the Group’s reputation, operations and/or financial
performance.
Regulatory compliance and licensing
The Group’s businesses are regulated by various
laws, licenses, regulations, and rules. A material
breach of relevant obligations or a failure to meet
compliance and conduct requirements may have
an adverse impact on the Group’s reputation,
operations, and/or financial performance.
Talent acquisition, retention, and wage pressure
The Group’s ability to attract and retain key senior
management and operating personnel may be
affected by a range of factors including competition
across the market, labour shortages, our employee
value proposition, and organisational culture. These
dynamics may also contribute to increased direct
and indirect labour costs which could impact the
Group’s financial performance.
– The Group’s procurement function and designated supplier
relationship owners maintain commercial and contractual
arrangements across the supplier base including ongoing
oversight of supplier performance in line with the Group’s
Procurement Policy and Supplier Code of Conduct.
– Where commercially appropriate, the Group will seek to
engage suppliers that contribute to positive community and
environmental outcomes, including those that maintain
relevant sustainability certifications.
– The Group has implemented risk management and
compliance frameworks including policies, procedures, tools,
training, and other controls.
– Ongoing monitoring and oversight of compliance with
obligations by Executive Management, including regular
reporting to the Executive Risk and Compliance Committee
and the Board Audit, Risk and Compliance Committee.
– Internal Audit function periodically reviews and provides
independent assurance regarding the adequacy of controls
and processes for managing risks and compliance obligations.
– The Group has adopted strategies, policies and processes
for the recruitment, development, and retention of talent, and
for fostering an inclusive, diverse, and engaged workforce.
– Succession plans are maintained for Key Management
Personnel (KMPs) and other key operational executives.
– The Group’s remuneration framework aims to attract, motivate,
and retain high performing individuals and provide market
competitive remuneration.
– The Board People, Culture and Remuneration Committee,
Chief People Officer, and relevant management committees
and working groups have responsibility for overseeing
strategies and programs related to people, culture, and
remuneration.
Workplace health and safety
A failure to appropriately manage the physical and
psychological health and wellbeing of employees,
other workers or visitors to the Group’s premises,
or a failure to comply with relevant workplace health
and safety laws and regulations could expose
the Group (and individuals) to civil, criminal, and/
or regulator action with associated financial and
reputational consequences.
– The Group has implemented a health, safety and wellbeing
framework including policies, procedures, reporting, training
and education in line with policies approved by the Board.
– The Board People, Culture and Remuneration Committee,
Chief People Officer, and relevant management committees
and working groups have responsibility for overseeing
strategies and programs related to workplace health and
safety.
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Directors’ experience
and special responsibilities
Helen Kurincic MBA, FAICD, FGIA
Appointed: 15 September 2018 (Non-Executive Director), 21 October 2020 (Chair)
Positions: Chair of the Board, Chair of the Nomination Committee
Member of the Audit, Risk and Compliance Committee
Member of the People, Culture and Remuneration Committee
Ms Kurincic is Non-Executive Chair of Integral Diagnostics Limited, Non-Executive Director of
Estia Health Limited and HBF Health Limited. Formerly, Ms Kurincic was the Chief Operating
Officer and Director of Genesis Care from its earliest inception, creating and developing the first
and largest radiation oncology and cardiology business across Australia. She has also formerly
held Board roles across the publicly listed, private, not-for-profit and government sectors as
well as being the former CEO of Benetas and Heart Care Victoria. Ms Kurincic is a Fellow of the
Australian Institute of Company Directors and Governance Institute of Australia. She has also
completed the Cambridge Institute for Sustainability Leadership NED Programme. Ms Kurincic
is considered an independent director under the Company’s definition of independence.
Rob De Luca B Ec, MBA
Appointed: 16 May 2022 (Chief Executive Officer and Managing Director)
Positions: Chief Executive Officer
Managing Director
Mr De Luca joined MMS in May 2022 and has over 20 years’ experience in the
Financial Services, Wealth Management, Disability and Healthcare sectors, including roles
as Managing Director of Bankwest, CEO of the National Disability Insurance Agency (NDIA)
and prior to joining MMS, Mr De Luca was CEO of Zenitas Healthcare.
Kathy Parsons B Comm, CA
Appointed: 22 May 2020
Positions: Non-Executive Director
Chair of the Audit, Risk and Compliance Committee
Member of the People, Culture and Remuneration Committee
Ms Parsons is currently a Non-Executive Director of Nick Scali Limited and
Shape Australia Corporation Limited. Formerly, Ms Parsons was an audit partner at
Ernst & Young where she spent time as a partner in the firm’s US, UK and Australian
practices. In addition to her audit client responsibilities, she was part of the firm’s
Oceania Assurance Leadership team as the Professional Practice Director with
responsibility for assurance quality and risk management in the region. Ms Parsons is
considered an independent Director under the Company’s definition of independence.
Bruce Akhurst B Ec (Hons), LLB, FAICD
Appointed: 1 April 2021
Positions: Non-Executive Director, Chair of the Remuneration and Nomination Committee
Member of the Audit, Risk and Compliance Committee
Member of the Nomination Committee
Mr Akhurst is currently the Chairman of Tabcorp Holdings Limited and a member of the
Audit Committee, Technology Committee, Nomination Committee, People, Culture and
Remuneration Committee and Risk, Compliance and Sustainability Committee. Mr Akhurst is
also Chair of the Peter McCallum Cancer Foundation and Council Member of RMIT University
chairing the Infrastructure and Information Technology Committee. Mr Akhurst was previously
the CEO of Sensis, Group MD and General Counsel of Telstra and a Partner of Mallesons
Stephen Jaques. Mr Akhurst is considered an independent director under the Company’s
definition of independence.
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John Bennetts B Ec, LLB
Appointed: 1 December 2003
Positions: Non-Executive Director
Mr Bennetts is an experienced investor and has been the founder and director
of a number of successful Australian companies. He owns businesses in varied
industries including technology and finance. Mr Bennetts is a Non-Executive
Director of Sacred Heart Mission. He was a founder of Cellestis Limited and private
equity investment firm, Mooroolbark Investments Pty Limited (M-Group). He has
also provided corporate advisory services to a range of companies in Australia and
Asia. Prior to the establishment of M-Group, he was a senior executive of pioneering
Australian multinational IT company, Datacraft Limited and also practised as a
commercial lawyer.
Ross Chessari LLB, M Tax
Appointed: 1 December 2003
Positions: Non-Executive Director
Mr Chessari is a founder and director of the investment manager, SciVentures
Investments Pty Limited (SciVentures). Prior to founding SciVentures, Mr Chessari
was the Managing Director of ANZ Asset Management and the General Manager of
ANZ Trustees. Mr Chessari has participated in the growth and development of the
Company and has significant interest in the Company’s continued success.
Arlene Tansey BBA, MBA, Juris Doctor, FAICD
Appointed: 7 November 2022 (Non-Executive Director
Positions: Non-Executive Director, Member of the Audit, Risk and Compliance Committee
Member of the People Culture and Remuneration Committee
Member of the Nomination Committee
Ms Tansey is a Non-Executive Director of TPG Telecom, Aristocrat Leisure Limited, Lend
Lease Real Estate Investments Limited, and the Australian Institute of Company Directors
(NSW Division Council) and the Australian National Maritime Museum. Before becoming a
non-executive Director, Ms Tansey worked in commercial and investment banking in Australia
(ANZ Banking Group and Macquarie Bank) and in investment banking and law in the United
States. She holds a Juris Doctor from the University of Southern California Law Centre
and an MBA from New York University. She is a member of Chief Executive Women, the
International Women’s Forum and a Fellow of the Australian Institute of Company Directors.
Ashley Conn B Comm, CA, MBA
Appointed: 5 October 2020
Positions: Chief Financial Officer
Company Secretary
Mr Conn is the CFO and Company Secretary and has over 20 years of financial
services experience. Previously Mr. Conn was the CFO of CSG Ltd and prior to that
had been an investment banker working in Australia and New York predominantly
for Goldman Sachs and Morgan Stanley.
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Remuneration Report (audited)
Letter from the Chair of the People,
Culture and Remuneration Committee
Dear Shareholders,
On behalf of the People, Culture and Remuneration Committee
(PCRC) and Board of McMillan Shakespeare Limited (MMS,
the Group or Company), I am pleased to present the Financial
Year 2023 (FY23) Remuneration Report (the Report).
The Report explains how our remuneration approach and
the Executive Remuneration Framework proposed in last
year’s report has been implemented in FY23. The report also
demonstrates how the Company’s remuneration approach
supports the short and longer-term alignment of the
Company’s performance for the benefit of shareholders.
At MMS, we are committed to achieving long-term, sustainable
growth and returns for our shareholders by focusing on
our strategic priorities of exceling in customer experience,
pursuing technology enabled productivity, and delivering
competency-led solutions in a rapidly changing landscape.
Company Performance:
FY23 has seen the Group deliver customer growth in all
three of our segments and seen some benefits associated
with rising interest rates. This commitment to our strategic
priorities, management of environmental challenges and the
customer, enabled MMS to deliver ongoing growth in both
Normalised performance in FY23, achieving 10%+ growth
in Normalised earnings per share (EPS)1, and Normalised
ROCE2 improving to 40.0% – up from 38.6%.
The past 12 months have presented challenges to our
business and our customers including ongoing wage inflation
pressures, continued constrained vehicle supply and an
economic environment resulting in increasing cost of living
pressures for our customers. These have caused household
spending to tighten and increased the cost of doing business
as we made additional investment to support service delivery
to an expanded client base. Our focus has been the pursuit
of sustainable growth and simplification of our portfolio of
businesses, while continuing to help our customers make the
most of their benefit arrangements across salary packaging,
novated leasing, asset management, and NDIS plan
management.
Remuneration Outcomes:
In our last report, we outlined the introduction of a Short-Term
Incentive Program (STIP) for FY23, which rewards annual
Company and individual performance that aligns with MMS’s
strategic priorities. The STIP comprises financial and non-
financial targets including Financial, Sustainability, Strategic,
Customer and People measures. Further details of performance
against STIP are included in Section 3 of the report.
The Long-Term Incentive Program (LTIP) award performance
measures are; (i) 50% normalised earnings per share (EPS),
through achieving a compound annual growth rate (CAGR)
and (ii) 50% average return on capital employed (ROCE).
The LTIP normalised EPS target for the FY21 and FY22
LTIP grants relating to FY23 performance hurdles were not
achieved and thus did not vest. The 2 year average ROCE
target for the FY21 LTIP grants was achieved and will vest
while the 3 year average ROCE target for the FY21 grant
and the FY22 LTIP grants relating to the average ROCE
performance were not achieved and hence will not vest.
The Board reviewed company performance as it relates to the
outcomes for STIP and LTIP and in light of FY23 performance,
deemed the results and subsequent remuneration outcomes
as appropriate.
Our People and Sustainability
Throughout the year we communicated the MMS strategy
with our workforce, including our ongoing strong focus on
attraction, retention and providing development opportunities
that support sustainable growth.
87% of our workforce took the time to provide feedback
through our Employee Engagement Survey, our sustainable
engagement score remains high at 80%, reflecting a slight
3% decrease from 2022. We are acting on employee
feedback to make MMS an even better place to work and
grow our people’s careers.
MMS considers various sustainability metrics and targets as
they relate to remuneration, performance, and diversity.
Gender Diversity has remained a focus and we are pleased
to have made further progress towards our 40:40:20 target
by 30 June 2030. At the end of FY23, we have made strong
progress demonstrated in the following female representation:
Board (including CEO/MD) at 43%, other Executive and
General Management at 40%. We continue to focus on our
Senior Management level, currently at 33% (up 4%).
We also made positive progress on the gender pay gap,
achieving 101% (up 3.2%) pay equity, against a target of 95-
105%, for like-for-like roles with greater than 10 occupants.
Through our Accessibility and Inclusion Plan and our
Reconciliation Action Plan, we are further cultivating a culture of
understanding and acceptance creating opportunities at MMS.
We thank you for your support and look forward to your
feedback on the report.
Bruce Akhurst
Non-Executive Chair of the People,
Culture and Remuneration Committee
1 Normalised earnings per share is based on Normalised UNPATA. UNPATA
is calculated as net profit before-tax but before the after-tax impact of
acquisition related items and non-business operational items (as outlined
within Note 2.1 of the Financial Report). Normalised refers to adjustments
made for the negative earnings transitional period for the implementation of
the funding warehouse,
2 Return on capital employed (ROCE) is adjusted to reflect 12 months’ trading
for acquisitions made in the financial year based on underlying earnings
before interest and tax (EBIT). Underlying EBIT is before the pre-tax impact
of acquisition related and non-business operational items (as outlined
within Note 2.1 of the Financial Report). Capital employed (excluding lease
liabilities) used in the calculations includes the add back of impairment of
acquired intangible asset charges incurred in the respective financial year.
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Contents
Section
Key Management Personnel
FY23 Executive Remuneration
Framework and Policy – Overview
FY23 Outcomes and the
Link to Performance
Remuneration
Governance
Executive Remuneration
Tables
Non-Executive Director
Remuneration
Reference
Section 2
Page 21
Section 3
Page 22
Section 4
Page 27
Section 5
Page 29
Section 6
Page 31
Section 7
Page 34
1. Remuneration report introduction
The Remuneration Committee is responsible for making
recommendations to the Board on remuneration policies
and packages applicable to Non-Executive Directors (NEDs),
the Chief Executive Officer & Managing Director (CEO & MD)
and approves recommendations on remuneration for the
Executive Leadership Team (ELT).
2. Key Management Personnel
This Report has been prepared in accordance with Section
300A of the Corporations Act 2001 and outlines the
remuneration arrangements in place for the Key Management
Personnel (KMP) of the Company. This comprises all
NEDs and those senior employees who have authority and
responsibility for planning, directing and controlling the
activities of the Company.
The table below sets out the Company’s Executive KMP and
Non-Executive Directors during FY23.
Executive KMP
Name
Position
Mr R. De Luca
Chief Executive Officer (CEO)
and Managing Director
Term as
KMP in
2022
Full year
Mr A. Conn
Group Chief Financial Officer
(CFO) and Company Secretary
Full year
Non-Executive Directors
Name
Position
Ms H. Kurincic
Non-Executive Chair
Term as
NED in
2022
Full year
Mr B. Akhurst
Non-Executive Director
Full year
Mr J. Bennetts
Non-Executive Director
Full year
Mr R. Chessari
Non-Executive Director
Full year
Ms K. Parsons
Non-Executive Director
Full year
Mr T. Poole 1
Non-Executive Director
Part year
Ms A. Tansey 2
Non-Executive Director
Part year
1 Retired 31 August 2022.
2 Appointed 7 November 2022.
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Remuneration Report (audited)
3. FY23 Executive Remuneration Framework and Policy – Overview
Our FY23
Executive Remuneration
Framework and Policy
Guiding Principles
MMS’ executive remuneration
– A framework that is clear, consistent and simple to understand.
framework and policies support our
strategy. Our executive remuneration
policy is designed to align the interests
of executives and shareholders while
attracting and retaining key executive
talent who are critical to the growth and
success of the Company.
– A framework that rewards executives for performance and contribution to the
Company’s objectives.
– Attract and retain key talent through fair and market competitive remuneration for the role.
– Incentivise high performance through STIP and LTIP performance measures aligned
with the Company’s strategy.
– Retention of key talent. Applies deferred access to Share or Performance rights to
promote ongoing commitment and employment with the company.
FY23 Remuneration Framework
Executive KMP Remuneration
Fixed pay
Short-term incentive
Long-term incentive
Fixed pay adjustments are made
to reflect general market conditions
and remuneration offered to
comparable roles within related
industries.
STI metrics are set to reflect
both financial and non-financial
measures and align to deliver
strategic priorities.
An annual scorecard will apply an
appropriate mix of financial and
non financial metrics.
STI will be part delivered in
cash and part delivered in rights
following a one year service based
deferral.
LTI is based on financial
performance hurdles.
LTI will be an annual grant of
performance rights with a single
three year performance window set
at the beginning of year one and
measured at the end of year three.
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Grant / Payment
Vest
FY23 Executive Remuneration Framework
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Fixed Annual
Remuneration
Cash
Share Rights
One year deferral
Performance Rights
1
2
3
Vesting Period (years)
4
The Board believes this is an appropriate mix to ensure that executives are focussed on generating value for
shareholders over the short and long term based on targeted metrics.
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Remuneration Report (audited)
Each element of remuneration is outlined in more detail below:
Element
Strategic Link
Fixed remuneration
Fixed remuneration comprises base
salary and superannuation (and, in some
cases, benefits such as motor vehicle
packaging payments).
Fixed remuneration of the Executive KMP is set to attract and retain the calibre of
talent required to drive outcomes for the Company’s shareholders and deliver on the
Company’s strategy.
Fixed remuneration is determined on an individual basis including having regard to:
– The individual’s role, duties and responsibilities and performance levels;
– General market conditions; and
– Remuneration offered to comparable roles within related industries.
The PCRC reviews fixed remuneration annually (or on promotion) to ensure fixed
remuneration levels remain fair, appropriate and market competitive.
Short-term incentive
STIP metrics are set to reflect both
financial and non-financial measures
and align to deliver strategic priorities
measured through an annual scorecard.
STI is awarded for annual Company and individual performance in line with the achievement
of MMS’s short term strategic and financial objectives. In this way, it aligns the interests of
Executive KMP with that of Company performance for the benefit of shareholders
STI will be part delivered in cash and part delivered in Rights following a one year service
based deferral. An annual scorecard will apply an appropriate mix of financial and non
financial metrics.
Long-term incentive
Incentives are delivered through
indeterminate and/or performance rights
(Rights or Performance Rights) in a LTIP,
with Performance Rights measured
over a three year period and subject to
performance measures.
By delivering part variable reward as a long-term incentive, our framework encourages
sustainable decision making and a focus on the long-term health of the business (including
the interests of customers), to drive long term value for shareholders.
Vesting of LTI is subject to the achievement of performance hurdles to drive a high-
performance culture amongst our Executive KMP and Executive Leadership Team.
The ROCE and EPS hurdles are aligned with our strategic priorities and our focus on
both earnings and capital optimisation.
Pay mix
FY23 Reward Mix
We set out below the mix between fixed remuneration, STI and LTI at maximum opportunity for current Executive KMP.
Note: Executive KMP Fixed remuneration was increased during FY23 for the 0.5% increase in the superannuation
guarantee contribution.
Key
Chief Executive Officer
Chief Financial Officer
Fixed remuneration
Short-term incentive
Long-term incentive
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40%
40%
20%
28%
21%
51%
Split between Cash vs Rights
Total Cash
Total equity
CEO
50%
50%
CFO
61.5%
38.5%
STIP in FY23
FY23 Short term incentive scorecards included both financial and non-financial measures, with both a target and
stretch target set. Measures were a mix of Financial, Sustainability, Strategy, Customer and People.
Focus Area
Objectives
Financial
Deliver operating
performance growth
CEO
Weighting %
CEO
Assessment
CFO
Weighting %
CFO
Assessment
50%
100%
50%
100%
Implement sustainability
strategies to support low and
zero emission vehicle solutions
Deliver business strategies to
support sustainable growth
Outperform market growth
through customer experience
Implement people and culture
strategies to improve staff
productivity
Sustainability
Strategy
Customer
People
Total
10%
100%
10%
100%
N/A
20%
20%
100%
N/A
N/A
83%
77%1
10%
15%
15%
N/A
50%
84%
100%
80%1
1 FY23 STI outcomes are delivered 50% in cash and 50% in rights with a one year service based deferred.
All of the following STI Risk, Compliance and Conduct Gateway hurdles must be met, for any eligibility to be awarded:
– All compliance training is confirmed as successfully completed
– There are no material breaches to any company policy or risk appetite
– There are no regulatory or reputational risk issues of a material or significant nature.
LTI awarded in FY23
In FY23, the Executive KMP were granted Performance Rights to value of:
– Mr R. De Luca 100% of Total Fixed Remuneration (TFR); and
– Mr A. Conn 55% of Total Fixed Remuneration (TFR).
The Performance Rights will vest subject to conditions such as an ongoing employment and the following
vesting conditions being met:
– Tranche 1: 50% of rights offered will be subject to the Company’s Normalised Earnings Per Share (EPS)
achieving a Compound Annual Growth Rate (CAGR) for the three financial years FY23 to FY25 of between
7% and 12%; and
– Tranche 2: 50% of the rights offered will be subject to the Company’s average Normalised Return on
Capital Employed (ROCE) for the three financial years FY23 to FY25 of between 36% to 40%.
Specific details on the Performance Rights granted to Executive KMP during FY23 are provided in section 6
of the report, and the table below outlines the terms of the grants.
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Split between Cash vs Rights
Total Cash
Total equity
CEO
50%
50%
CFO
61.5%
38.5%
Remuneration Report (audited)
Detailed summary – FY23 LTIP grant
Element
Description
Opportunity levels
(% of fixed remuneration)
The opportunity levels offered to the Executive KMP in FY23 were:
− 100% of fixed remuneration for the CEO; and
− 55% of fixed remuneration for the CFO
Allocation methodology
Performance period
Performance Rights: Rights were allocated on a face value basis in FY23.
This is calculated by the volume weighted average price (VWAP) of the shares listed on
ASX based on the last 5 trading days prior to 30 June.
Three years in respect of meeting financial targets. The vesting of any LTIP is subject to either the
good leaver provisions in the incentive plan or continued employment with the Company on the date
that the Company’s financial report is lodged with the ASX for the year ending 30 June 2025.
Performance hurdles
Subject to the Executive KMP remaining employed for the performance period, vesting of the
Performance Rights is subject to the achievement of two performance hurdles:
Financial targets
− The Company’s CAGR in Normalised EPS which applies to 50% of the Performance Rights; and
− Average Normalised ROCE over the performance period which applies to 50% of the
Performance Rights.
The following vesting schedules apply to Performance Rights (with vesting on a straight-line
basis between each level of performance).
Normalised EPS (CAGR)
Performance
Period
Level of
performance (%)
Percentage of
awards vesting
Allocation of
total grant
3 years to FY25
<7%
-
7% – 12%
50% – 100%
-
50.0%
Average Normalised ROCE
Performance
Period
Level of
performance (%)
Percentage of
awards vesting
Allocation of
total grant
3 years to FY25
<36.0%
-
36.0% – 40.0%
50% – 100%
-
50%
Calculation of Normalised EPS (CAGR) shall be based on comparing the Normalised EPS results
in the final year of the performance period (including any impairment losses) to the Normalised EPS
results for FY22 as the base year.
The ROCE performance condition is based on the Company’s average Normalised ROCE over the
performance period.
To determine the full extent to which the performance hurdles are satisfied, the PCRC relies
on the audited financial results, adjusted to reflect normalised performance and vesting is
determined in accordance with the LTIP Rules.
The PCRC believes this method of assessment provides an appropriate assessment of
performance. The PCRC considers adjustments for one off material items to ensure metrics are
correctly adjusted to take into account these changes.
In the event that the Executive KMP takes approved unpaid leave for a period exceeding three
months during FY23, FY24, of FY25 the vesting criteria outlined above with respect to the
performance hurdles and the executive’s continued employment will be deemed on a pro-rata
basis to reflect the period of continuous service during the relevant financial year, unless the
Board determines otherwise.
Process for assessing
performance conditions
Voting and dividend entitlements
No voting rights or dividend entitlements attach to the Rights.
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Element
Description
Malus
(i.e. forfeiture of awards)
If the Board determines that an act of fraud, defalcation, gross misconduct, or that any other
circumstance has occurred in relation to the affairs of the Group and the Board determines an
inappropriate benefit has been obtained by the Participant, the Participant will forfeit any right or interest
in the Shares, Rights or Options or other entitlements under the Long term Incentive Plan Rules.
Treatment upon cessation
of employment
If the Executive KMP leaves employment with the Company prior to the date specified in the
Invitation Letter, the Rights will lapse without any payment to the employee (subject to the
discretion of the Board).
Change of control
On a change of control, the Board has discretion to waive the performance conditions attached
to the Performance Rights.
Hedging
No Executive KMP can enter a transaction that is designed or intended to hedge the executive’s
exposure to any unvested option or Right. Executive KMPs are required to provide declarations
to the Board on their compliance with this policy from time to time.
4 FY23 Outcomes and the Link to Performance
MMS financial performance FY19 to FY23
The table below sets out the Company’s performance over the past three years in respect of key financial and
non-financial indicators.
Metric
FY23
FY22
FY21
FY20
FY19
Net profit attributable to Company members ($’000)
$32,272
$70,349
$61,065
$1,269
$63,672
Underlying net profit after income tax (UNPATA)1 ($’000)
$74,741
$82,072
$79,213
$69,028
$88,697
Normalised UNPATA2 ($’000)
$86,248
$83,766
$71,898
N/A
NPAT growth
(54.1%)
15.2%
>100%
(98.0%)
Normalised UNPATA growth
3.0%
3.6%
14.8%
(22.2%)
N/A
26.6%
(5.1%)
Dividends paid ($’000)
Dividend payout ratio3
Share price as at 30 June
Market capitalisation (A$m)
Normalised earnings per share (cents)
Normalised earnings per share growth
ROCE5
$91,929
$50,375
$23,369
$59,591
$61,173
100%
$18.06
100%
$9.74
66%
$12.95
42%
$9.08
69%
$12.21
$1,257.8
$753.7
$1,002.1
$702.6
$1,016.0
119.6
10.5%
40%
108.3
78.9
37.2%
(9.73%)
39%
33%
1.6
N/A
20%
77.0
N/A
21%
1 UNPATA is calculated as net profit before-tax but before the after-tax impact of acquisition related items and non-business operational items
(as outlined within Note 2.1 of the Financial Report).
2 Normalised refers to adjustments made for the negative earnings transitional period for the implementation of the funding warehouse, Onboard Finance
(“Warehouse”). It normalises for the Warehouse’s in year operating and establishment expenses and for an adjustment for commissions that would have
otherwise been received in period had the sales been financed via a principal and agency funder rather than through the Warehouse. Normalised financials
are stated for FY23 and FY22 (for comparative purposes) and are currently expected to be stated up to and including FY25. For FY21 normalisations only
include an adjustment to remove the impact of JobKeeper.
3 Dividend payout ratio is calculated as total dividends declared for the financial year divided by Normalised UNPATA for the financial year
4 Normalised earnings per share is based on Normalised UNPATA.
5 Return on capital employed (ROCE) is adjusted to reflect twelve months’ trading for acquisitions made in the financial year based on underlying earnings
before interest and tax (EBIT). Underlying EBIT is before the pre-tax impact of acquisition related and non-business operational items (as outlined within
Note 2.1 of the Financial Report). Capital employed (excluding lease liabilities) used in the calculations includes the add back of impairment of acquired
intangible asset charges incurred in the respective financial year.
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Remuneration Report (audited)
Company performance outcomes linked to the LTIP
The following table outlines the performance against the LTIP financial performance measures that have been used
across the Executive KMP in FY23.
Alignment between Performance and Remuneration
FY21 Grant –
2 & 3 Year
Performance
LTIP Metrics
Normalised
ROCE 3
FY20 1
FY21
FY22
FY23
Metric
Achieved
Period
Achieved
Vesting
Target
Range
Vesting
Target Met
N/A
29.5% 35.5% 29.7%
Normalised
EPS growth (cps) 2
87.4
81.0
98.9
63.3
32.5%
2 Year
29.5% – 32.5%
31.6%
3 Year
31.5% – 34.5%
6.3%
2 year
11.5% – 15.5%
(10.7%)
3 year
9.5% – 13.5%
Yes
Yes
No
No
FY22 Grant – 2 & 3 Year
Performance LTIP Metrics
FY211
FY22
FY23
Metric
Achieved
Period
Vesting Target
Range
Vesting
Target Met
ROCE 2,3
N/A
34.8% 22.4%
28.6%
2 year
36.0% – 41.0%
No
3 year
36.0% – 41.0% To be tested
Normalised EPS growth (cps) 2
81.0
98.9
63.3
(11.6%)
3 year
6.0% – 10.0%4
To be tested
FY23 Grant – 3 Year
Performance LTIP Metrics
FY221
FY23
Metric
Achieved
Period
Vesting Target
Range
Vesting
Target Met
27.5%
27.5%
3 year
36.0% – 40.0% To be tested
63.3
(33.8%)
3 year
7.0% – 12.0%
To be tested
Normalised ROCE 3
Normalised EPS growth (cps)
N/A
95.6
1 Base year for Normalised EPS.
2 No normalisation adjustments relate to FY21
3 ROCE is based on the average in the performance period.
4 Underlying EPS of 3.6% to 7.7% as per FY22 annual report.
Incentive outcomes
The table below outlines the LTIP that qualified for vesting based on the performance against the metrics in FY23.
The vesting entitlement is subject to Executive KMP’s meeting the employment conditions or good leaver provisions.
Mr R.De Luca3
Mr A. Conn
Portion qualified for vesting
FY21 Grant 1
FY22 Grant 2
FY23 Grant
-
46.4%
-
14.0%
-
-
1 The achievement of the FY21 grants by Mr A. Conn was based on having met the 2 year average ROCE tranche (17.5%) and the strategic targets tranche (20.0%)
and the 3 year average ROCE tranche (8.9%).
2. The achievement of the FY22 grants by Mr A. Conn was based on having met strategic targets tranche (14.0%).
3 Mr R. De Luca commenced 16 May 2022.
The Rights that have qualified and are subject to meeting the relevant employment conditions in the table above
will result in 22,461 ordinary MMS shares being provided to Mr A. Conn as detailed above and will be issued by the
MMS Employee Share Trust.
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5. Remuneration Governance
Responsibility for setting remuneration
Responsibility for setting a remuneration policy and determining Executive and Non-Executive Director remuneration rests
with the Board.
The PCRC’s objectives are to oversee the formulation and implementation of remuneration policy and make
recommendations to the Board on remuneration policies and packages applicable to Non-Executive Directors (NEDs),
the Chief Executive Officer & Managing Director (CEO & MD) and approves recommendations on remuneration for the
Executive Leadership Team (ELT).
For further details on the composition and responsibilities of the PCRC, please refer to the Corporate Governance
Statement on our website www.mmsg.com.au/overview/#governance.
The following chart outlines key stakeholders in the governance of remuneration at MMS.
Remuneration
Consultants
Board
Provide independent advice,
information and recommendations
relevant to remuneration decisions.
Responsibility for setting
a remuneration policy and
determining Executive and Non-
Executive Director remuneration
rests with the Board.
Shareholder
and Advisory Bodies
Includes consultation, investor and
proxy meetings and engagement
at the Annual General Meeting.
People, Culture
and Remuneration
Committee and
Nomination Committee
Assist the Board to achieve
its objective by making
recommendations to the Board
in relation to its composition and
recruitment, retention, remuneration
and succession planning for
Directors and Senior Executives.
Audit, Risk and
Compliance Committee
Support the People, Culture and
Remuneration Committee by
providing relevant information as
required for incentive awards.
Use of independent remuneration consultants
The PCRC obtains external independent advice from remuneration consultants when required and will use it to guide
and inform their decision-making. During FY23, no remuneration recommendations (as defined in the Corporations Act
2001 (Cth)) were received.
Board discretion
The Board has adopted a set of guiding principles when it considers adjustments to performance outcomes under the
STIP and LTIP. The process for adjustments and principles applied are:
1. Transparency: for any adjustments made, MMS will provide clear disclosure and rationale.
2. Timing of adjustments: adjustments will be made to reward outcomes at the time of vesting, applying to both
positive and negative adjustments.
3. Shareholders and management alignment: adjustments will be made in the interests of balancing the shareholder
and management alignment ensuring consistency in Company objectives.
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Remuneration Report (audited)
Details of executive service agreements
The table below sets out key information in respect of the service agreements of the CEO and Managing Director
and CFO and Company Secretary.
Element
Duration
Notice period
Description
Ongoing
− CEO: 9 months’ written notice by the Company or CEO. The agreement may,
however, be terminated by the Company for cause without notice or any payment.
− CFO: 6 months written notice by the Company or CFO. The agreement may,
however, be terminated by the Company for cause without notice or any payment.
Termination payments
The Company has discretion to make a payment in lieu of notice in respect of the above
notice periods.
No contracted retirement benefits are in place with any of the Company’s Executives.
Restraint of trade
A restraint period not exceeding 12 months.
Minimum shareholding requirements
The Company has minimum shareholding requirements for its Executive KMP and Non-Executive Directors to facilitate
share ownership and encourage an ‘ownership’ mindset. Refer section 7 for further details on current KMP and
director share ownership.
The table below sets out key information in respect of this Policy1. Please refer to the ‘Share Ownership and Retention
Policy’ on the Company’s website for further detail www.mmsg.com.au/overview/#governance.
Directors and officers
Description
Requirement
Executive KMP
50% of one year’s
fixed remuneration
− 5 years from date of commencement as Executive KMP
Non-Executive Directors1
100% of one year’s
base director fees
− 5 years from date of commencement as Non-Executive Director
1 Share Ownership and Retention Policy reviewed and updated 26 June 2023.
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6. Executive Remuneration Tables
Executive remuneration
The following table sets out the executive remuneration for FY23 in accordance with the requirements of the
Accounting Standards and Corporations Act 2001 (Cth). No rights were exercised or sold during FY23.
Executive KMP
Mr M. Salisbury
(CEO and
Managing Director)
Mr R. De Luca5
(CEO and
Managing Director)
Mr A. Conn
(Group CFO and
Company Secretary)
Total
Remuneration
Cash
salary/
fees
Annual
Leave
Entitlements
Other
Benefits 1
Superannuation
$
-
FY23
$
-
$
-
$
-
Long
Service
Leave
$
-
Rights 2,3
Total
remuneration
Percentage of
remuneration
as rights
Value of
remuneration
received 4
$
-
$
-
%
-
$
-
FY226
817,692
12,086
11,645
21,755
13,314
402,368
1,278,860
31%
851,092
FY23
804,755
31,397
1,540
25,293
14,549
361,688
1,239,222
29%
831,587
FY22
74,657
7,527
-
2,719
1,628
-
86,531
n/a
77,376
FY23
602,710
47,646
17,570
25,293
27,216
246,208
966,643
25%
645,572
FY22
587,046
12,159
9,490
23,568
10,277
170,830
813,370
21%
620,104
FY23
1,407,465
79,043
19,110
50,586
41,765
607,896
2,205,865
28%
1,477,161
FY22
1,479,395
31,772
21,135
48,042
25,219
573,198
2,178,761
-
1,548,572
1 Other benefits reflect motor vehicle packaging payments,.
2 The equity value comprises the value of Performance Rights issued. No shares were issued to any Non-Executive Director (and no Performance Rights were
granted to any Non-Executive Director) during the financial years ended 30 June 2022 and 30 June 2023. The value of Performance Rights issued to Executive
KMP (as disclosed above) are the assessed fair values at the date that the Performance Rights were granted to the Executives, allocated equally over the period
from when the services are provided to vesting date. Fair values at grant date are determined using a Black-Scholes pricing model that takes into account the
exercise price, the expected term of the right, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the right.
3 The expense in FY23 comprises the fair value expense of Performance Rights granted in FY21, FY22 and FY23 based on the number of Rights estimated to
vest based on the Company’s performance against the EPS and ROCE performance targets (subject to continuing employment) with vesting periods in FY23,
FY24 and FY25. FY23 rights include STIP share rights and LTIP performance rights. The FY23 rights include an estimated cost of STI.
4 Value of remuneration received comprises salary, benefits and superannuation salary packaged, annual and long service leave used and bonuses paid in the year
(excludes the value of Rights).
5 Mr R De Luca commenced on 16 May 2022.
6 Mr M Salisbury retired on 16 May 2022.
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O
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2
0
2
3
31
Remuneration Report (audited)
Detail of LTIP securities
The terms and conditions of each grant of Performance Rights to Executive KMP affecting their remuneration in FY23
and each relevant future financial year are set out below.
Grant Date
Type of LTI securities
Expiry Date
Share price at
valuation date
Value per option
at grant date 1
Date Exercisable
20/10/202
3 Year Performance Right
30/10/20
3 Year Performance Right
15/10/21
3 Year Performance Right
22/11/213
3 Year Performance Right
15/11/224
3 Year performance Right
Date that the FY23
financial statements
are lodged
Date that the FY23
financial statements
are lodged
Date that the FY24
financial statements
are lodged
Date that the FY24
financial statements are
lodged
Date that the FY25
financial statements are
lodged
$9.46
$8.51
3 Year Lodgement Date
(expected to be September 2023)
$9.34
$8.40
3 Year Lodgement Date
(expected to be September 2023)
$14.52
$12.82
3 Year Lodgement Date
(expected to be September 2024)
$13.18
$11.54
3 Year Lodgement Date
(expected to be September 2024)
$13.31
$10.54
3 Year Lodgement date
(expected to be September 2025)
1 Reflects the fair value at grant date for options or rights granted as part of remuneration, calculated in accordance with AASB2 Share-based Payment.
2 The issue to Mr Mike Salisbury occurred on 20 October 2020, after shareholder approval at the Company’s AGM.
3 The issue to Mr Mike Salisbury occurred on 22 November 2021, after shareholder approval at the Company’s AGM.
4
The issue to Mr R De Luca occurred on 28 October 2022, after shareholder approval at the Company’s AGM.
Details of the LTIP securities over ordinary shares in the Company provided as remuneration to each Executive KMP
are set out below.
Executive
KMP
(Name)
Date of grant
Type of
LTIP securities
Number of
securities
granted
Value
of one security
granted during
the year $
Number of
securities
vested during
year
Vested %
Number of
securities
forfeited /
lapsed
Forfeited or
lapsed %
Year in
which
securities
may vest
M
r
R
.
D
e
L
u
c
a
M
r
A
.
C
o
n
n
15/11/2022
3 Year
Performance Rights
82,822
$10.54
30/10/2020
3 Year
Performance Rights
48,362
15/10/2021
3 Year
Performance Rights
47,322
-
-
15/11/2022
3 Year
Performance rights
35,374
$10.54
-
-
-
-
-
-
-
-
-
19%
FY26
(8,436)
19%
FY24
(9,938)
21%
FY25
-
-
FY26
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Movement of STIP and LTIP securities granted
The table below reconciles the Performance Rights held by each Executive KMP from the beginning to the end of FY23.
Executive KMP
Security type
Mr R De Luca2
Performance Rights (LTIP)
Mr R De Luca2
Share Rights (STIP)
Balance at
the start of
the year
-
-
Number
Granted
during
year 1
82,822
20,706
Mr A Conn
Performance Rights (LTIP)
90,848
35,374
1 Granted pursuant to the Company’s Executive Remuneration Plan
Vested
during
the year
Exercised
during the
year
Forfeited
during
year
Other
changes
during the
year
Vested and
exercisable
at the end
of the year
Unvested
at the end
of the year
-
-
-
-
-
-
-
-
(18,401)
-
-
-
-
-
-
82,822
20,706
107,820
2 The issue to Mr R. De Luca was approved by shareholders at the AGM held on 28 October 2022 and issue of rights occurred on 15 November 2022,
at a fair value of $10.64.
Shares issued on Performance Options
No ordinary shares in the Company were issued following the exercise of Performance Options by Executive KMP
during FY23.
Other transactions and balances with KMP
There were no loans made during the year, or remaining unsettled at 30 June 2023, between the Company and its
KMP and/or their related parties.
Executive KMP and Director share ownership
The following table sets out the number of shares held directly, indirectly or beneficially by Directors and Executive KMP
(including their related parties).
Balance
at the start
of the year
Shares
acquired
through
option
exercise
Other
changes
during
the year
Balance
at the end
of the year
Value of
Shares 1
$
Minimum
Shareholding
Requirement 2
$
Non-Executive Directors
Ms H. Kurincic
Mr B. Akhurst
Mr J. Bennetts
Mr R. Chessari
Ms K. Parsons
Ms A. Tansey 3
Executive KMP
Mr R. De Luca
Mr A. Conn
20,000
25,000
3,068,025
6,050,941
8,000
-
-
-
-
-
-
-
-
-
-
-
5,000
25,000
451,500
212,044
-
-
-
25,000
451,500
116,050
3,068,025
55,408,532
116,050
6,050,941
109,279,994
116,050
5,000
13,000
234,780
116,050
-
-
-
-
-
-
-
-
-
116,050
400,862
311,299
1 Calculated as the number of shares multiplied by the share price as at 30 June 2023 of $18.06.
2 Minimum shareholding required as outlined under section 6(e) based on the FY23 fixed remuneration.
3 Ms A. Tansey commenced 7 November 2022.
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Remuneration Report (audited)
7. Non-Executive Director Remuneration
Remuneration policy and arrangements
The Board sets the fees for the Chair and the other Non-Executive Directors. The Board’s policy is to remunerate the
Chair and Non-Executive Directors:
− at market competitive rates, having regard to the fees paid for comparable companies, the need to attract
Directors of the requisite calibre and expertise and their workloads (taking into account the size and complexity
of the Company’s operations and their responsibility for the stewardship of the Company); and
− in a matter which preserves and safeguards their independence. Neither the Chair nor the other Non-Executive
Directors are entitled to any performance-related pay. The primary focus of the Board is on the long-term strategic
direction of the Company.
The Non-Executive Directors are remunerated for their services from the maximum annual aggregate amount approved by
the shareholders of the Company on 28 October 2022 (currently $1,200,000 per annum).
Fees and other benefits
The table below sets out the annual fees payable (inclusive of superannuation) to the directors of MMS. The fee schedule
has been determined having regard to fees paid to comparable roles within MMS’s peers.
Fees are inclusive of superannuation contributions required under legislation and are made by the Company on behalf of
Non-Executive Directors. There is no scheme for the payment of retirement benefits or termination payments (other than
payments relating to accrued superannuation entitlements).
Effective 1 July 2022 NED fees were increased to reflect an adjustment to superannuation (SGC) moving these from
10% to 10.5%. This will similarly increase to 11% superannuation effective 1 July 2023 (FY24). No other fee changes
were implemented.
Role
Chair
Non-executive Directors
Audit, Risk and Compliance
Committee
People, Culture and Remuneration
Committee
Nomination Committee
Chair
Membership
Chair
Membership
Chair
Membership
FY23 Fee
$212,044
$116,050
$25,228
$12,614
$20,183
$10,091
$Nil
$Nil
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Non-Executive Director remuneration – statutory disclosure
The fees paid or payable to the directors of the Company in respect of the 2023 financial year are set out below.
Cash
salary/fees
Other
Benefits 1
Superannuation
Total value of
remuneration
received
Total
remuneration
Non-Executive Directors
Ms H. Kurincic
(Non-Executive Chair)
Mr B. Akhurst
(Non-Executive Director)
Mr J. Bennetts
(Non-Executive Director)
Mr R. Chessari
(Non-Executive Director)
Ms K. Parsons
(Non-Executive Director)
Mr T. Poole2
(Non-Executive Director)
Ms A. Tansey3
(Non-Executive Director)
Total Remuneration
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
$
191,895
191,895
141,775
134,703
105,023
105,023
105,023
105,023
131,244
131,243
20,928
125,571
81,441
-
777,329
807,831
1 Other benefits reflect motor vehicle packaging.
2 Mr T Poole – resigned 31/08/22.
3 Ms A Tansey – joined 7/11/22.
$
-
-
-
-
-
-
-
-
5,743
5,743
-
-
-
-
5,743
1,454
$
20,149
19,190
7,072
13,470
11,027
10,502
11,027
10,502
14,384
13,699
2,197
12,557
8,551
-
74,407
76,883
$
212,044
211,085
148,847
148,173
116,050
115,525
116,050
115,525
151,370
150,685
23,126
$
212,044
211,085
148,847
148,173
116,050
115,525
116,050
115,525
151,370
150,685
23,126
138,128
138,128
89,992
89,992
-
857,479
886,168
-
857,479
886,168
Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors.
Bruce Akhurst
Non-Executive Chair of the PCRC
Helen Kurincic
Non-Executive Chair of the Board
End of the audited Remuneration Report
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Directors’ Report
Unissued shares
At the date of this Annual Report, there were no unissued ordinary shares of the Company under option. No options were
granted to the Directors or any of the five highest remunerated officers of the Company since the end of the financial year.
Directors’ interests
At the date of this Annual Report, the relevant interest of each Director in the securities issued by the Company and its
controlled entities, as notified by the Directors to the Australian Securities Exchange Limited (ASX) in accordance with section
205G(1) of the Corporations Act 2001 (Cth), is as follows:
Director
Ms H. Kurincic (Chair)
Mr R. De Luca
Mr B. Akhurst
Mr J. Bennetts
Mr R. Chessari
Ms K. Parsons
Mr. T. Poole
Ms A. Tansey
Rights
Ordinary shares
-
103,528
-
-
-
-
-
-
20,000
-
25,000
3,068,025
6,050,941
8,000
30,000
-
No Director during FY23, became entitled to receive any benefit (other than a benefit included in the aggregate amount of
remuneration received or due and receivable by the Directors shown in the Remuneration Report or the fixed salary of a full time
employee of the Company) by reason of a contract made by the Company or a controlled entity with the Director or an entity in
which the Director has a substantial financial interest or a firm in which the Director is a member.
Change of Auditor and non-audit services
In accordance with an ordinary resolution made by the Company’s members at the Annual General Meeting held on
28 October 2022 Ernst & Young were appointed as auditor of the Company. This followed the resignation of the Company’s
previous auditor, Grant Thornton Audit Pty Ltd and ASIC’s consent to the resignation in accordance with Section 329(5)
of the Corporations Act 2001.
Details of the amounts paid or payable to the auditor of the Company, Ernst & Young and its related practices, for non-audit
services provided, during FY23, are disclosed in Note 7.6 to the Financial Report.
The ARCC has reviewed the services other than the statutory audit provided by Ernst & Young during the financial year ended
30 June 2023. The other services related to non-statutory audit services and other assurance services which are compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth). This has been formally
advised to the Board. Consequently, the Directors are satisfied that the provision of non-audit services during the year by the
auditor and its related practices did not compromise the auditor independence requirements of the Corporations Act 2001 (Cth).
Events occurring after the reporting date
On 31 July 2023 the Group completed the sale of its Australian Asset Finance Aggregation business (trading as UFS and
NFC, “Aggregation Business”). On 22 August 2023 an agreement was signed with a consortium of funders predominantly
associated with and including Praetura Group (UK) to divest the UK businesses with net proceeds of approximately $20m.
The UK businesses sale is subject to limited conditions and expected to close in the first half of FY24. Refer Note 6.3 of the
Financial report as these businesses were classified as discontinued operations relating to assets held for sale for the year
ended 30 June 2023.
Other than the matters disclosed in this report, there were no material events subsequent to the reporting date.
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2
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Environmental regulations
The Company and its controlled entities have adequate systems in place for the management of relevant environmental
requirements and are not aware of any breach of those environmental requirements as they apply to the Company and its
controlled entities.
Indemnification and Insurance
Under the Company’s Constitution, the Company indemnifies the Directors and Officers of the Company and its wholly owned
subsidiaries to the extent permitted by law against any liability and all legal costs in connection with proceedings incurred by
them in their respective capacities.
The Company has also entered into a Deed of Access, Indemnity and Insurance (Deed) with each Director and each Company
Secretary which protects individuals acting as officeholders during their term of office and after their resignation. Under the
Deed, the Company also indemnifies each officeholder to the full extent permitted by law.
The Company has a Directors & Officers Liability Insurance policy in place for all current and former Officers of the Company
and its controlled entities. The policy affords cover for loss in respect of liabilities incurred by Directors and Officers where the
Company is unable to indemnify them and covers the Company for indemnities provided to its Directors and Officers. This does
not include liabilities that arise from conduct involving dishonesty. The Directors have not included the details of the premium
paid with respect to this policy as this information is confidential under the terms of the policy.
Corporate governance practices
Our full corporate governance statement is available on our website at www.mmsg.com.au/overview/#governance.
Auditor’s independence declaration
A copy of the auditor’s independence declaration, as required under section 307C of the Corporations Act 2001 is included
on page 41 of this Annual Report.
Directors’ declaration
The Directors have received and considered written representations from the Chief Executive Officer and the Chief Financial
Officer in accordance with the ASX Principles. The written representations confirmed that:
– the financial reports are complete and present a true and fair view, in all material respects, of the financial condition and
operating results of the Company and its controlled entities and are in accordance with all relevant accounting standards;
and
– the above statement is founded on a sound system of risk management and internal compliance and control that
implements the policies adopted by the Board and that compliance and control is operating efficiently and effectively in
all material respects.
Signed in accordance with a resolution of the Directors.
Helen Kurincic
Chair
23 August 2023
Melbourne, Australia
Rob De Luca
Managing Director &
Chief Executive Officer
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Directors’ Report
Five year summary
Financial Performance
Group
Revenue from continuing operations ($m)
NPAT from continuing operations ($m) 8
UNPATA from continuing operations ($m) 1,8
Normalised UNPATA from continuing operations ($m) 2
Group Remuneration Services segment
Segment revenue ($m)
Segment NPAT ($m) 8
Segment UNPATA ($m) 3,8
Normalised segment UNPATA ($m) 2
Plan and Support Services segment
Segment revenue ($m)
Segment NPAT ($m) 8
Segment UNPATA ($m) 3,8
Normalised segment UNPATA ($m) 2
Asset Management Services segment
Segment revenue ($m)
Segment NPAT ($m) 8
Segment UNPATA ($m) 3,8
Normalised segment UNPATA ($m) 2
Retail Financial Services segment
Segment revenue ($m)
Segment NPAT ($m) 8
Segment UNPATA ($m) 3,8
Shareholder Value
Dividends per share (cps)
Dividend payout ratio (%) 4
Basic earnings per share (cps)
Return on Equity (%)
Underlying earnings per share (cps) 5
Return on capital employed (%)
Other
Employees (FTE) 6
Employee engagement score (%) 7
2023 10
2022 9
2021
2020
2019
464.0
64.4
66.4
77.9
225.5
41.0
41.0
52.5
48.5
7.3
8.0
8.0
187.4
18.7
18.7
18.7
-
-
-
124
100
89.4
32.7
92.1
40
1,290
80
594.1
70.3
82.1
83.8
206.5
46.7
46.7
48.4
41.2
5.3
6.6
6.6
346.1
21.1
30.3
30.3
-
-
-
108
92.9
90.9
29
106.1
39
1,294
83
544.5
61.1
79.2
71.9
202.6
55.8
55.8
49.4
26.2
5.4
5.4
5.4
315.5
1.4
19.6
18.5
-
-
-
61.3
66
78.9
31
102.4
31
1286
85
494.0
1.3
69.0
N/A
214.8
60.9
60.9
N/A
-
-
-
549.7
63.7
88.7
N/A
221.9
66.1
66.1
N/A
-
-
-
N/A
N/A
229.3
(9.9)
6.0
N/A
49.5
(47.3)
3.0
34.0
42
1.6
21
87.4
20
1295
87
245.8
12.4
17.2
N/A
80.7
(14.0)
6.4
74.0
69
77.0
23
107.3
21
1334
79
1 FY23 UNPATA excludes amortisation of intangibles $0.6m, acquisition and disposal related costs of $1.0m and capital structure costs $0.4m. FY22 UNPATA
excludes amortisation of intangibles $1.8m, impairment of CLM goodwill of $6.0m, acquisition and disposal related costs of $3.3m and adjustments related to new
accounting standards of $0.4m. FY21 UNPATA excludes amortisation of intangibles $1.6m, UK restructuring costs of $14.6m and impairment of CLM goodwill
for $2.0m. FY20 UNPATA excludes amortisation of intangibles $2.9m, impairments of UK and RFS businesses $49.8m, one-off adjustments for Deferred Income
and DAC of $9.8m, class action settlement and legal costs of $5.1m, acquisition and disposal related costs of $1.2m, deferred consideration (no longer payable)
$(1.4m) and capital structure costs $0.4m.
In FY22, dividend payout ratio is calculated as total dividend declared for the financial year divided by normalised UNPATA.
2 Normalised UNPATA is UNPATA adjusted for the Warehouse in FY22 and JobKeeper in FY21
3 Segment UNPATA does not include unallocated public company costs and interest from Group treasury funds.
4
5 Underlying earnings per share is based on UNPATA.
6 As at 30 June, excludes UK.
7 Employee engagement survey conducted biennially with regular Pulse Survey’s conducted in intervening periods; the 2022 result represents the May 2022
8
Pulse Survey Sustainability Engagement score.
In FY20 and FY21 NPAT and UNPATA includes JobKeeper of $7.3m (net of tax) for FY21 and $7.0m (net of tax) for FY20 which has been recognised as an offset
against employee benefit expenses.
In FY22 the reportable segments of the Group changed. Plan and Support Services is now reported as a separate segment (previously included in Group Remuneration
Services) and Retail Financial Services is now included as part of Asset Management Services. The FY21 comparatives have been restated on this basis.
10 In FY23 the Group classified its UK business and the RFS Aggregation business as discontinued operations relating to assets held for sale. The financial report
9
provides the financial performance in respect of the continuing operations of the Group.
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Financial
Report
FOR THE YEAR ENDED
30 JUNE 2023
Directors’ Declaration
The Directors are of the opinion that:
1. The financial statements and notes of McMillan Shakespeare Limited and its subsidiaries (the Group) for the year ended 30 June 2023
on pages 42 to 94 are in accordance with the Corporations Act 2001 (Cth), including:
a. giving a true and fair view of the Company and the Group’s financial position as at 30 June 2023 and financial performance for the
financial year ended on that date; and
b. complying with Accounting Standards, the Corporations Regulations 2001 (Cth) and other mandatory professional reporting requirements.
2. There are reasonable grounds to believe that the Company and the Group will be able to pay its debts as and when they become due
and payable.
3. At the date of this declaration, there are reasonable grounds to believe that members of the extended closed group identified in Note 6.2
will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in Note 6.2.
Note 1 confirms that the financial statements also comply with International Financial reporting Standards as disclosed as issued by
the International Accounting Standards Board.
The Directors have been given declarations by the Chief Executive Officer and Chief Financial Officer required by s295A of the
Corporations Act 2001 (Cth).
This declaration is made in accordance with a resolution of the Directors of McMillan Shakespeare Limited.
Helen Kurincic
Chair
23 August 2023
Melbourne, Australia
Rob De Luca
Managing Director & Chief Executive Officer
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Auditor’s Independence Declaration
AS AT 30 JUNE 2023
Ernst & Young
8 Exhibit ion St reet
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Audit or’s Independence Declarat ion t o t he Dir ect ors of McMillan
Shakespeare Limit ed
As lead auditor for the audit of the financial report of McMillan Shakespeare Limited for the financial year
ended 30 June 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of McMillan Shakespeare Limited and the entities it controlled during the
financial year.
Ernst & Young
Brett Kallio
Part ner
23 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
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Statements of Profit or Loss and
Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2023
Revenue
Interest revenue
Dividends received
Revenue from continuing operations
Expenses
Employee benefit expenses
Leasing and vehicle management expenses
Brokerage commissions and incentives
Depreciation and amortisation expenses
Other operating expenses
Finance costs
Operational expenses excluding impairment and other
Impairment of financial assets
Impairment of investment in subsidiaries
Impairment and other items
Total expenses from continuing operations
Profit before income tax expense from continuing operations
Income tax (expense)/benefit
Net profit for the year from continuing operations
Discontinued operations relating to assets held for sale
(Loss)/profit after tax after tax from discontinued operations
relating to assets held for sale
Net profit attributable to owners of the Company
Other comprehensive income
Items that may be reclassified subsequently to profit:
Changes in fair value of cash flow hedges
Exchange differences on translating foreign operations
Income tax on other comprehensive income
Other comprehensive income, net of tax
Total comprehensive income for the year
Other comprehensive income after tax from
discontinued operations relating to assets held for sale
Total comprehensive income for the year is attributable to:
Owners of the Company
Total comprehensive income for the year
Note
2.2
2.3b
2.3c
2.3d
2.4
6.3
Consolidated Group
Parent Entity
2023
$’000
450,223
13,781
-
2022
$’000
416,720
1,937
-
464,004
418,657
2023
$’000
-
256
99,255
99,511
2022
$’000
-
-
50,375
50,375
(160,486)
(135,087)
(3,714)
(1,202)
(84,707)
(73,771)
(280)
(66,516)
(49,625)
(9,747)
-
(64,274)
(46,884)
(4,198)
(371,361)
(324,214)
(840)
-
(840)
(481)
-
(481)
(372,201)
(324,695)
91,803
(27,354)
64,449
93,962
(27,088)
66,874
-
-
-
(3,282)
(2,110)
(9,106)
-
(17,289)
(17,289)
(26,395)
73,116
2,793
75,909
-
-
-
(2,877)
(21)
(4,100)
-
-
-
(4,100)
46,275
1,165
47,440
(32,177)
32,272
3,475
70,349
-
-
75,909
47,440
(838)
1,899
251
1,312
33,584
3,216
-
(965)
2,251
72,600
-
-
-
-
-
-
-
-
75,909
47,440
1,472
(1,596)
-
-
35,056
35,056
71,004
71,004
75,909
75,909
47,440
47,440
Basic earnings per share (cents) from continuing operations
Diluted earnings per share (cents) from continuing operations
Basic earnings per share (cents) from total operations
Diluted earnings per share (cents) from total operations
2.5
2.5
2.5
2.5
89.4
89.0
44.8
44.6
86.0
85.8
90.9
90.6
M
M
S
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
3
42
The above Statements of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
Statements of Financial Position
AS AT 30 JUNE 2023
Current assets
Cash and cash equivalents
Restricted client trust funds
Trade and other receivables
Finance lease receivables
Inventories
Prepayments
Derivative financial instruments
Total current assets
Assets held for sale
Non-current assets
Finance lease receivables
Assets under operating lease
Right-of use assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Investment in subsidiaries
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Loans from controlled entities
Restricted client trust funds for salary packaging
Contract liabilities
Other liabilities
Provisions
Current tax liability
Other loans payable
Borrowings
Lease Liabilities
Total current liabilities
Liabilities directly associated with assets held for sale
Non-current liabilities
Provisions
Borrowings
Other loans payable
Lease Liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
FCTR relating to Disclosure group
Total equity
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
2023
$’000
2022
$’000
60,581
402,608
39,985
22,794
13,552
5,246
2,037
546,803
77,617
86,327
204,957
30,054
21,487
65,597
16,720
-
425,142
160,796
439,694
35,267
14,609
15,574
5,525
2,931
674,396
-
13,531
223,667
35,982
11,322
135,548
25,145
-
445,195
1,049,562
1,119,591
73,117
-
402,608
5,473
12,853
14,687
4,684
3,800
-
5,130
522,352
28,329
2,006
268,722
6,094
41,383
35,099
353,304
903,985
145,577
68,596
(458)
80,200
(2,761)
145,577
83,735
-
439,694
7,823
18,914
13,395
1,158
-
15,851
4,212
584,782
-
1,195
142,222
9,711
46,852
43,398
243,378
828,160
291,431
76,257
(7,248)
222,422
-
291,431
1,255
-
448
-
-
108
-
1,811
-
-
-
-
-
-
313
237,533
237,846
239,657
25,088
31,247
-
-
-
-
1,671
-
-
-
58,006
-
-
60,000
-
-
-
60,000
118,006
121,651
68,597
4,309
48,745
-
121,651
580
-
496
-
-
-
-
1,076
-
-
-
-
-
-
-
254,822
254,822
255,898
13,412
12,530
-
-
-
-
2,906
-
-
-
28,848
-
-
-
-
391
391
29,239
226,659
76,257
2,861
147,541
-
226,659
Note
3.1
3.1
3.2
3.3
6.3
3.3
3.5
3.6
3.7
2.4
6.1
3.8
3.8
3.1
3.9
3.10
3.11
4.1
4.1
3.6
6.3
3.11
4.1
4.1
3.6
2.4
4.2
6.3
The above Statements of Financial Position should be read in conjunction with the accompanying notes.
M
M
S
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
3
43
Statements of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2023
2023
Equity at start of the year
Net profit for the year
Other comprehensive income
for the year after tax
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners:
Share-based expense
Dividends paid
Share buy-back
Reserves associated
with as assets held for sale
Equity at end of the year
2022
Equity at start of the year
Net profit for the year
Other comprehensive income
for the year after tax
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners:
Share-based expense
Dividends paid
Note
4.2
5.1
4.3
4.2
Note
4.2
5.1
4.3
-
-
-
-
-
(7,661)
-
Consolidated Group
Issued
capital
$’000
Retained
earnings
$’000
Share-based
payment
reserve
$’000
Cash
flow hedge
reserve
$’000
76,257
222,422
2,861
Foreign
currency
translation
reserve
$’000
Acquisition
reserve
$’000
Total
$’000
(4,928)
(7,204)
291,431
32,272
-
32,272
-
-
-
2,023
-
(586)
-
1,898
(586)
1,898
-
-
-
-
-
-
-
32,272
1,312
33,584
1,243
(91,929)
(90,226)
1,474
-
-
-
-
-
70,349
655
71,004
1,607
(50,375)
-
1,243
(91,929)
(82,565)
-
-
-
-
-
-
-
-
-
-
(94)
1,568
68,596
80,200
4,104
1,343
(1,462)
(7,204)
145,577
Consolidated Group
Share-based
payment
reserve
$’000
Cash flow
hedge
reserve
$’000
Foreign
currency
translation
reserve
$’000
Issued
capital
$’000
Retained
earnings
$’000
Acquisition
reserve
$’000
Total
$’000
76,257
202,448
1,254
(228)
(3,332)
(7,204)
269,195
-
-
-
-
-
2,251
(1,596)
2,251
(1,596)
-
-
-
-
-
70,349
-
70,349
-
(50,375)
1,607
-
2,861
-
-
-
-
2,023
(4,928)
(7,204)
291,431
Equity at end of the year
76,257
222,422
M
M
S
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
3
44
The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.
Statements of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2023
2023
Equity at start of the year
Net profit for the year
Other comprehensive income for the year after tax
Total comprehensive income
for the period
Transactions with owners in their capacity as owners:
Opening retained earnings adjustments
Share-based expense
Dividends paid
Share buy-back
Equity at end of the year
2022
Equity at start of the year
Net profit for the year
Other comprehensive income for the year after tax
Total comprehensive income
for the period
Transactions with owners in their capacity as owners:
Share-based expense
Dividends paid
Equity at end of the year
Note
4.2
5.1
4.3
4.2
Note
4.2
5.1
4.3
Parent Entity
Retained
earnings
$’000
147,541
75,909
-
75,909
(211)
-
(91,929)
(82,565)
48,745
Parent Entity
Retained
earnings
$’000
150,476
47,440
-
47,440
-
(50,375)
147,541
Share-based
payment
reserve
$’000
2,861
-
-
-
206
1,243
-
-
4,310
Share-based
payment
reserve
$’000
1,254
-
-
-
1,607
-
2,861
Issued
capital
$’000
76,257
-
-
-
-
-
-
(7,661)
68,596
Issued
capital
$’000
76,257
-
-
-
-
-
76,257
Total
$’000
226,659
75,909
-
75,909
(5)
1,243
(91,929)
(90,226)
121,651
Total
$’000
227,987
47,440
-
47,440
1,607
(50,375)
226,659
The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.
M
M
S
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
3
45
Statements of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated Group
Parent Entity
Note
2023
$’000
2022
$’000
2023
$’000
2022
$’000
584,831
(425,591)
99,468
(117,091)
365
(8,223)
-
(13,814)
119,945
(8,188)
(1,066)
(22,401)
(10,736)
(42,391)
73,707
(89,910)
(7,486)
-
(50,375)
-
(74,064)
3,490
(691)
157,998
-
-
-
(5,818)
(2,582)
-
-
256
(2,110)
99,255
-
-
-
331
(21)
50,375
-
91,583
48,103
-
-
-
-
-
60,000
-
-
(90,226)
(91,929)
31,247
(90,908)
675
-
580
-
-
-
-
-
-
-
(9,752)
-
-
(50,375)
12,530
(47,597)
506
-
74
-
580
160,797
1,255
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Proceeds from sale of assets previously under lease
Payments for assets under lease
Interest received
Interest paid
Dividends received
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payments for capitalised software
Payments for plant and equipment
Cash transferred on disposal of subsidiaries net of cash consid-
eration received
Acquisition of subsidiary, net of cash consideration paid
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Payments of lease liabilities
Payments in respect of share buy back
Dividends paid
Proceeds from controlled entities
Net cash used in financing activities
Net increase in cash and cash equivalents
Effects of exchange changes on cash and cash equivalents
Cash and cash equivalents at start of the year
Cash and cash equivalents of assets held for sale
Cash and cash equivalents at end of the year
3.1
3.7
3.1
3.1
4.3
553,008
(449,053)
110,829
(177,043)
13,775
(8,849)
-
(18,060)
24,607
(11,912)
(4,399)
-
-
(16,311)
162,214
(48,343)
(3,239)
(90,226)
(91,929)
-
(71,523)
(63,227)
713
160,797
(37,702)
60,581
M
M
S
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
3
46
The above Statements of Cash Flows should be read in conjunction with the accompanying notes.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
1
Introduction to the Report
5
Employee Remuneration and Benefits
5.1 Share-based Payments
5.2 Key Management Personnel Compensation
5.3 Other Employee Benefits
6 Group Structure
6.1 Investment in Subsidiaries
6.2 Deed of Cross Guarantee
6.3 Discontinued operations relating to
Assets Held for Sale
7 Other Disclosures
7.1 Reserves
7.2 Interest
7.3 Goods and Services Tax
7.4 Property Plant and Equipment
7.5 Related Party Transactions
7.6 Auditor’s Remuneration
7.7 Events occurring after the reporting date
8 Unrecognised Items
8.1 Commitments
2 Performance
2.1 Segment Reporting
2.2 Revenue
2.3 Profit and Loss Information
2.4
Income Tax
2.5 Earnings Per Share
3
Assets and Liabilities
3.1 Cash and Cash equivalents
3.2 Trade and Other Receivables
3.3 Finance Lease Receivables
3.4
Inventories
3.5 Assets under Operating Lease
3.6 Right-of-use Assets and Lease Liabilities
3.7
Intangible Assets
3.8 Trade and Other Payables
3.9 Contract Liabilities
3.10 Other Liabilities
3.11 Provisions
4
Capital Management
4.1 Borrowings
4.2
Issued Capital
4.3 Dividends
4.4 Financial Risk Management
4.5 Financial Instruments
M
M
S
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
3
47
1 Introduction to the Report
The financial report of McMillan Shakespeare Limited (Company
or Parent Entity) in respect of the Company and the entities it
controlled at the reporting date or during the year ended
30 June 2023 (Group or Consolidated Group) was authorised in
accordance with a resolution of the Directors on 23 August 2023.
Reporting entity
The Company is a for-profit company limited by shares which
is incorporated and domiciled in Australia and listed on the
Australian Securities Exchange (ASX).
Basis of preparation and accounting policies
The financial report and notes are a general purpose financial
report which has been prepared in accordance with the Australian
Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) and the Corporations
Act 2001 (Cth). The financial report also complies with the
International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board.
Except for cash flow information, the financial statements have
been prepared on an accrual and historical cost basis except for
certain financial instruments measured at fair value as explained
in the notes to the financial statements (the Notes).
The accounting policies adopted are consistent with those of
the previous financial year unless stated otherwise. The financial
report presents reclassified comparative information where
required for consistency with current year’s presentation.
Key judgements, estimates and assumptions
The preparation of the financial statements requires judgement
and the use of estimates and assumptions in applying the Group’s
accounting policies, which affects amounts reported for assets,
liabilities, income and expenses.
Judgements, estimates and assumptions are continuously
evaluated and are based on:
> historical experience;
> current market conditions; and
> reasonable expectations of future events.
Note
Item
Judgements, Estimates
and Assumptions
Restricted client trust
funds
Balance sheet
classification
3.1
3.5
3.7
Assets under
operating lease
Intangible assets
4.4(b)
Trade and other
receivables and finance
lease receivables
Lease assets
residual value
Assessment of
recoverable amount
Assessment of
recoverable amount
Detailed information about each of these judgements, estimates
and assumptions is included in the Notes together with information
about the basis of calculation for each affected line item in the
financial statements.
The Notes
The Notes include information which is required to understand the
financial statements and is material and relevant to the operations,
financial performance and position of the Group. Information is
considered material and relevant where:
> the amount in question is significant because of its size
or nature;
> it is important for understanding the results of the Group; or
> it helps explain the impact of significant changes in the
Group’s business.
The Notes are organised into the following sections:
2 Performance
information on the performance of the Group, including segment
results, earnings per share (EPS) and income tax.
3 Assets and Liabilities
details the assets used in the Group’s operations and the liabilities
incurred as a result.
4 Capital Management
Actual results may differ and uncertainty about these judgements,
estimates and assumptions could result in a material adjustment
to the carrying amount of assets or liabilities in future periods.
The key areas involving judgement or significant estimates and
assumptions are set out below:
information relating to the Group’s capital structure and financing
as well as the Group’s exposure to various financial risks.
5 Employee Remuneration and Benefits
information relating to remuneration and benefits provided to
employees and key management personnel.
6 Group Structure
information relating to subsidiaries and other material investments
of the Group.
7 Other Disclosures
other disclosures required by Australian Accounting Standards that
are considered relevant to understanding the Group’s financial
performance or position.
8 Unrecognised Items
information about items that are not recognised in the financial
statements but could potentially have a significant impact on the
Group’s financial performance or position in the future.
48
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Basis of consolidation
Subsidiaries are consolidated from the date the Group gains
control until the date on which control ceases. Control is achieved
when the Group is exposed to, or has rights to, variable returns
from its involvement in the entity and has the ability to affect
those returns through its power to direct the activities of the entity.
The Group’s share of all intercompany balances, transactions
and unrealised profits are eliminated.
The financial statements of subsidiaries are prepared for the
same reporting period as the Parent Entity, using consistent
accounting policies.
Foreign currency
The consolidated financial statements of the Group are presented
in Australian dollars which is the presentation currency. The
financial statements of each entity in the Group are measured
using the currency of the primary economic environment in which
the entity operates (functional currency).
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Differences resulting at settlement of such
transactions and from the translation of monetary assets and
liabilities at reporting date are recognised in profit or loss.
Non-monetary items are not retranslated at reporting date and are
measured at historical cost (being the exchange rates at the dates
of the initial transaction), except for non-monetary items measured
at fair value which are translated using the exchange rates at the
date when fair value was determined.
Group companies
On consolidation of the financial results and affairs of foreign
operations, assets and liabilities are translated to the presentation
currency at prevailing exchange rates at reporting date and income
and expenses for the year at average exchange rates. The
resulting exchange differences on consolidation are recognised
in other comprehensive income (OCI) and accumulated in equity.
On disposal of a foreign operation, the component of OCI relating
to that particular foreign operation is recognised in profit or loss.
Accounting policies
Accounting policies that summarise the classification, recognition
and measurement basis of financial statement line items and that
are relevant to the understanding of the consolidated financial
statements are provided throughout the notes.
Presentation of Restricted client trust funds
Pursuant to contractual arrangements with clients, GRS
administers cash flows on behalf of clients as part of the
remuneration benefits administration service. These funds are
for the purpose of making salary packaging payments on behalf
of those clients only and therefore not available for use in the
Group’s operations. These funds are not available to be used to
settle group liabilities and are held on trust for the benefit of
those clients. The Group has recognised these funds in the
Statement of Financial Position.
Key judgements include the benefits received from holding the
Restricted client trust funds, the obligations regarding day to day
operations in respect of the Restricted client trust funds and also
noting that the Restricted client trust funds are not available to be
used to settle Group liabilities and are held on trust for the benefit
of those clients.
This is outlined in the table below.
Restricted client trust funds - prior year
Year
ended
30 June
2022
$’000
Change
$’000
Revised
year
ended
30 June
2022
$’000
-
-
-
-
439,694
439,694
439,694
439,694
439,694
439,694
439,694
439,694
Current assets
Restricted client
trust funds
Total current assets
Current liabilities
Restricted client trust funds
for salary packaging
Total current liabilities
Current versus non-current classification
Assets and liabilities are presented in the Statements of
Financial Position based on current / non-current classification.
An asset is current when it is:
> expected to be realised or intended to be sold or consumed
in the Group’s normal operating cycle;
> held primarily for the purpose of trading;
> expected to be realised within 12 months after reporting date; or
> cash or a cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12
months after reporting date.
A liability is current when:
> it is expected to be settled in the Group’s normal
operating cycle;
> it is held primarily for the purpose of trading;
> it is due to be settled within 12 months after reporting date; or
> there is no unconditional right to defer the settlement of the
liability for at least 12 months after reporting date.
Rounding of amounts
The amounts contained in the financial report have been rounded
to the nearest thousand dollars (unless specifically stated to be
otherwise) under the option available to the Company under
ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191.
49
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
2 Performance
2.1 SEGMENT REPORTING
Description of segments
Operating segments have been identified after considering the nature of the products and services, type of customer and distribution methods.
Reportable Segment
Services provided
Group Remuneration Services (GRS)
Administrative services in respect of salary packaging and facilitating motor vehicle novated
leases for customers.
Ancillary services associated with motor vehicle novated lease products, including the
provision of novate lease finance.
Asset Management Services (AMS)
Financing and ancillary management services associated with motor vehicles, commercial
vehicles and equipment from continuing operations in Australia and New Zealand.
Plan and Support Services (PSS)
Plan management and support coordination services to participants in the National Disability
Insurance Scheme (NDIS).
Underlying net profit after tax and amortisation (UNPATA), being net profit after tax but before the after tax impact of acquisition and divestment
related activities, accounting standard changes and non-operational items (as outlined in the following tables), is the key measure by which
management monitors the performance of the segments. Segment revenue and expenses are reported as attributable to the shareholders of
the Company.
Normalised UNPATA refers to adjustments made for the negative earnings transitional period for the implementation of the funding warehouse,
OnBoard Finance (Warehouse). It normalises for the Warehouse’s in year operating and establishment expenses and for an adjustment for
commissions that would have otherwise been received in period had the sales been financed via a principal and agency (P&A) funder rather
than through the Warehouse. Normalised financials are stated for FY22 and FY23 and expected to be stated up to and including FY25.
50
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
2.1 SEGMENT REPORTING (CONTINUED)
The segment reporting presented below reflects the results from continuing operations. The prior year figures have also been updated
for comparative purposes.
2023
Revenue
Interest revenue
Segment revenue
Normalised UNPATA
Warehouse
Income tax related to normalised
UNPATA adjustments
UNPATA
Reconciliation to statutory net profit after tax
attributable to members of the parent entity
Amortisation of intangible assets acquired on
business combination
Capital restructure costs
Acquisition and disposal related expenses2
Income tax related to UNPATA adjustments
UNPATA adjustments after tax
Statutory net profit after tax attributable
to members of the parent entity
Assets and Liabilities
Segment assets
Segment liabilities
Additions to segment non-current assets
Segment depreciation and amortisation
GRS
$’000
215,091
10,361
225,452
52,477
(16,438)
4,932
40,971
-
-
-
-
-
AMS
$’000
186,582
821
187,403
18,683
-
-
PSS
$’000
Unallocated1
$’000
Consolidated
Group
$’000
48,550
-
48,550
8,012
-
-
-
2,599
2,599
(1,253)
-
-
450,223
13,781
464,004
77,919
(16,438)
4,932
66,413
18,683
8,012
(1,253)
-
-
-
-
-
(813)
-
(176)
297
(692)
40,971
18,683
7,320
301,926
191,412
19,822
14,888
294,386
272,159
8,572
95,457
29,732
7,881
1,027
1,667
-
(813)
(553)
(1,264)
545
(1,272)
(2,525)
195,569
58,758
176,019
-
(553)
(1,440)
842
(1,964)
64,449
821,613
530,210
205,440
112,012
1 Unallocated revenue and assets include cash and bank balances of segments other than AMS, maintained as part of the centralised treasury and funding
function of the Group and interest earned on those balances.
2 Costs incurred in relation to potential acquisition and disposal transactions and related costs.
Segment profit includes the segment’s share of centralised general management and operational support services which are shared across
segments based on the lowest unit of measurement available to allocate shared costs that reasonably measure each segment’s service level
requirements and consumption. Segment profit does not include corporate costs of the parent entity including Director’s fees and finance
costs relating to borrowings not specifically sourced for segment operations, costs directly incurred in relation to acquisitions and divestments
or interest revenue not directly attributable to a segment.
Included in segment revenue for GRS are revenues of $69,845,808 (2022: $61,715,952) from the Group’s largest contract. This is the only
customer representing greater than 10% of total segment revenue.
51
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
2.1 SEGMENT REPORTING (CONTINUED)
2022
Revenue
Interest revenue
Segment revenue
Normalised UNPATA
Warehouse
Income tax related to normalised
UNPATA adjustments
UNPATA
Reconciliation to statutory net profit after tax
attributable to members of the parent entity
Amortisation of intangible assets acquired on
business combination
Acquisition and disposal related expenses2
Other
Income tax related to UNPATA adjustments
UNPATA adjustments after tax
Statutory net profit after tax attributable
to members of the parent entity
Assets and Liabilities
Segment assets
Segment liabilities
Additions to segment non-current assets
Segment depreciation and amortisation3
GRS
$’000
204,919
1,561
206,480
48,382
(2,420)
726
AMS
$’000
170,567
17
170,584
17,968
-
-
PSS
$’000
Unallocated1
$’000
Consolidated
Group
$’000
41,234
27
41,261
6,605
-
-
-
332
332
(1,478)
-
-
416,720
1,937
418,657
71,479
(2,420)
726
46,688
17,968
6,605
(1,478)
69,785
-
-
-
-
-
-
-
(556)
162
(394)
46,688
17,574
176,422
136,905
16,936
13,594
289,054
203,617
2,568
59,864
(904)
(955)
-
558
(1,301)
5,304
11,627
8,509
13,078
1,606
-
(904)
(1,648)
-
433
(1,215)
(2,693)
112,018
1,696
107,289
-
(2,603)
(556)
1,153
(2,910)
66,874
589,121
350,727
139,871
75,064
1 Unallocated revenue and assets include cash and bank balances of segments other than AMS, maintained as part of the centralised treasury and funding
function of the Group and interest earned on those balances.
2 Costs incurred in relation to the acquisition and disposal of Group subsidiaries which included the acquisition of Plan Tracker Pty Ltd which completed on
1 July 2021.
3 Depreciation and amortisation includes impairment of goodwill and other intangibles of $6.0 million.
52
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Other segment information
Assets are allocated based on the operations of the segment. The Parent Entity’s borrowings are not considered to be segment liabilities.
Geographical segment information
Revenue from continuing operations by location of operations and assets are detailed below.
Australia
New Zealand
1 Non-current assets do not include deferred tax assets.
2.2 REVENUE
Set out below is the disaggregation of the Group’s revenue:
Revenue from contracts with customer
Remuneration services
Sale of leased and other assets
Brokerage commissions and financial services
Plan and support services
Total revenues from contracts with customers
Lease rental services
Other revenue
Revenue from
external customers
Non-current assets1
2023
$’000
286,923
22,291
309,214
2022
$’000
399,249
19,106
418,355
2023
$’000
381,502
26,920
408,422
2022
$’000
274,281
24,403
298,684
Consolidated Group
2023
$’000
2022
$’000
Parent Entity
2023
$’000
2022
$’000
215,092
204,919
98,964
1,273
48,550
363,878
86,331
13
450,223
90,008
1,240
41,235
337,402
77,709
1,609
416,720
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
53
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Revenue
Description
Remuneration services
Administration fees for the provision of salary packaging and ancillary services including
novated leasing and finance procurement, motor vehicle administration and other services.
Fees are recognised over the period that the services are rendered, net of any rebates payable
to the employer organisation. Fee rates are contractually agreed with each client employer
and the provision of administration services is considered to have been satisfied for each
period completed.
Fees derived from the origination of financing and insurance products are recognised at a
point in time when the customer has executed the lease finance or activated the insurance
cover and the Group has no outstanding obligations.
Volume-based rebates from providers of package benefit services are estimated and
recognised based on the period of entitlement.
Sale of Leased and other assets
The Group assumes control of motor vehicles at the termination of lease contracts and
disposes of the asset as principal. The net proceeds are recognised when settlement is
completed and ownership of the motor vehicle passes to the purchaser.
Brokerage commissions
and financial services
Plan and support services
Lease rental services
Volume based incentives (VBI) are received based on the volume of financial products
introduced by the network of dealers and brokers with financiers using contracted rates. VBI
are recognised in the period the financier activates the finance originations net of rebates
provided to dealers and brokers in the network.
Commission income is received from brokerage services for the procurement of lease finance
to motor vehicle fleet operators and other customers as agent under a P&A arrangement
with financiers. Income is recognised when the financing arrangements are funded free from
any service deliverables net of estimated clawback of commissions from future terminations.
Under P&A arrangements, the Group acts as agent for the procurement of lease asset
financing and does not possess credit risk or carry on risks of ownership of the underlying
finance or asset with the customer.
Fees for the provision of set up and renewal of plans and support coordination services
are recognised at the point in time of providing the service. Fees for the provision of plan
management services are recognised over time based on the individual plans.
Rental income received for operating lease assets is recognised on a straight line basis over
the term of the lease.
Interest from finance leases is recognised over the term of the lease as a constant periodic
return on the amount invested in the lease asset.
Fees for tyre and maintenance services are recognised to the extent that services are
completed based on the percentage of costs incurred relative to total expected costs over the
term of the lease.
Fleet administration fees are recognised in the period that services are provided.
54
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 2.3 PROFIT AND LOSS INFORMATION
(a) Superannuation contributions expense
Superannuation contribution expenses are included within employee benefit expenses.
Superannuation
Superannuation contribution expense
12,401
10,899
-
-
Consolidated Group
2023
$’000
2022
$’000
Parent Entity
2023
$’000
2022
$’000
(b) Depreciation and amortisation expenses
Depreciation and amortisation expenses
Depreciation of assets under operating lease
Depreciation of right-of-use (ROU) assets
Depreciation of plant and equipment
Amortisation of software development
Amortisation of intangible assets
(c) Other operating expenses
Consulting and professional services
Marketing
Property and corporate expenses
Technology and communication
Other
(d) Impairment of financial assets
Trade debtors specific and expected credit loss allowance
Finance lease receivable expected credit loss allowance / (gain)
Consolidated Group
2023
$’000
2022
$’000
Parent Entity
2023
$’000
2022
$’000
48,206
5,377
2,045
10,285
603
66,516
47,190
5,669
1,475
9,204
736
64,274
Consolidated Group
2023
$’000
7,039
7,782
9,940
20,386
4,478
49,625
2022
$’000
8,134
9,941
9,538
17,939
1,332
46,884
-
-
-
-
-
-
Parent Entity
2023
$’000
2,286
-
336
-
660
3,282
-
-
-
-
-
-
2022
$’000
1,914
-
348
-
615
2,877
Consolidated Group
2023
$’000
(347)
(493)
(840)
2022
$’000
53
(534)
(481)
Parent Entity
2023
$’000
2022
$’000
-
-
-
-
-
-
Finance lease receivable expected credit loss (ECL) allowance of $493,000 (2022: $534,000 gain) is affected largely by the increase in
carrying value of finance lease receivables of $86,524,000 from $28,140,000 in 2022. The Group uses assessment criteria from its credit
management system and adds forward looking indicators to reflect macro-economic factors to estimate ECL.
55
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 2.4
INCOME TAX
Components of tax expense / (benefit)
Current tax expense
Adjustments for current tax of prior years
Deferred tax (benefit) /expense
Income tax expense / (benefit) of assets held for sale1
Income tax expense / (benefit)
Consolidated Group
2023
$’000
27,180
(174)
(1,727)
2,075
27,354
2022
$’000
10,131
(1,014)
18,301
(330)
27,088
Parent Entity
2023
$’000
(1,915)
(174)
(704)
-
2022
$’000
(661)
47
(551)
-
(2,793)
(1,165)
1. Income tax expense includes deferred tax assets of 6,605 and deferred tax liabilities of (4,538).
The tax expense included in the Statements of Profit or Loss consist of current and deferred income tax.
Current income tax is:
Deferred income tax is:
> the expected tax payable on the current period’s taxable income;
> recognised using the liability method;
> calculated using tax rates for each jurisdiction enacted or
substantively enacted at the end of the reporting period in the
countries where the entities in the Group operate and generate
taxable income; and
> inclusive of any adjustment to income tax payable or recoverable
of prior years.
> based on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and their
respective tax bases;
> calculated using the tax rates that are expected to apply when
the assets are recovered or liabilities settled, based on those
rates which are enacted or substantially enacted; and
> not recognised if they arise from the initial recognition of goodwill.
Current and deferred income tax is recognised in the Statement of Profit or Loss. However, when it relates to items charged directly to the
Statement of Other Comprehensive Income or Statement of Changes in Equity, the tax is recognised in OCI or equity respectively.
56
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 The prima facie tax payable on profit before income tax is reconciled to the income tax expense / (benefit) as follows:
Consolidated Group
Profit before income tax
Prima facie tax payable on profit before income tax
at 30% (2022: 30%)
Add tax effect of:
– Non-deductible impairment expense
– Non-deductible costs
– Non-deductible loss on business disposal
– Overseas tax rate differential of subsidiaries
– (Over) / under provision of tax from prior year
– Other
Less tax effect of:
– Dividends received
– Other
Income tax expenses / (benefit)
2023
$’000
91,803
27,542
-
45
-
(59)
(174)
-
27,354
-
-
27,354
2022
$’000
93,962
28,189
-
309
174
(67)
(1,014)
(173)
27,418
Parent Entity
2023
$’000
73,116
21,935
5,187
-
-
-
(174)
36
2022
$’000
46,275
13,883
-
17
-
-
46
2
26,984
13,948
-
(29,777)
(15,113)
(330)
27,088
-
-
(2,793)
(1,165)
57
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Deferred tax asset / (liability)
The balance comprises temporary differences attributed for:
Amounts recognised in profit or loss
Doubtful debts
Provisions
Property, plant and equipment
Accrued expenses
Finance and other receivables / prepayments
Losses
Deferred acquisition expense
Intangible assets
Unearned income
Other
Amounts recognised in equity
Derivatives recognised directly in equity
Share based payment reserve
Balance at end of the year
Recognised as:
Deferred tax asset (DTA)
Deferred tax liability (DTL)
Movements in deferred tax asset / (liability)
Balance at start of the year
Charged to profit or loss
Charged to other comprehensive income
Foreign exchange translation
Deferred tax for assets held for sale
Balance at end of the year
Consolidated Group
2023
$’000
2022
$’000
Parent Entity
2023
$’000
2022
$’000
471
6,096
386
6,620
(32,106)
(37,359)
4,144
2,773
-
254
(2,641)
1,988
197
6,224
7,609
319
504
(4,657)
2,155
(110)
(18,824)
(18,309)
(446)
890
(774)
830
(18,380)
(18,253)
16,719
(35,099)
(18,380)
(18,253)
1,727
292
(79)
(2,067)
(18,380)
25,145
(43,398)
(18,253)
1,036
(18,301)
(965)
(23)
-
-
-
-
-
-
-
250
-
-
63
313
-
-
313
313
-
313
(391)
704
-
-
-
-
-
-
110
(855)
-
248
-
-
106
(391)
-
-
(391)
-
(391)
(391)
(942)
551
-
-
-
(18,253)
313
(391)
The carrying value of DTAs are reduced to the extent that it is probable future taxable profits will be available to utilise these temporary
differences. DTAs and DTLs are offset only if certain criteria are met with respect to legal enforceability and within the same tax jurisdiction.
DTAs and DTLs are not recognised for temporary differences between the carrying amounts and tax bases of investments in subsidiaries
where the parent entity is able to control the timing of reversal and it is probable that the differences will not reverse in the foreseeable future.
58
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 Unrecognised temporary differences
Temporary differences that have not been tax effected:
– Unused tax losses and DTAs
Balance at end of the year
Consolidated Group
2023
$’000
2022
$’000
Parent Entity
2023
$’000
2022
$’000
22,713
22,713
15,738
15,738
-
-
-
-
Unused tax losses relate to subsidiaries that are dormant and / or unlikely to generate sufficient taxable income to use these losses or
capital losses on disposal of subsidiaries.
Tax consolidation
The Company and its wholly owned Australian resident entities are members of a tax consolidated group under Australian taxation law.
The Company is the head entity in the tax consolidated group. Entities within the tax consolidated group have entered into a tax funding
agreement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement, the Company and each of
the entities in the tax consolidated group have agreed to pay a tax equivalent payment to or from the head entity, based on the current tax
liability or current tax asset of the head entity.
2.5 EARNINGS PER SHARE
Basic earnings per share (cents) from continuing operations
Diluted earnings per share (cents) from continuing operations
Basic earnings per share (cents) from total operations
Diluted earnings per share (cents) from total operations
Earnings used to calculate basic and diluted EPS ($’000)
Net profit after tax ($’000)
Weighted average number of ordinary shares used in the calculation of basic EPS (‘000)
Weighted average numbers of options and rights on issue outstanding (‘000)
Weighted average number of ordinary shares used in the calculation of diluted EPS (‘000)
Consolidated Group
2023
2022
89.4
89.0
44.8
44.6
32,272
72,102
299
72,401
86.0
85.8
90.9
90.6
70,349
77,381
232
77,613
Basic EPS is calculated by dividing the profit attributable to members of the Company by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted EPS is calculated from earnings and the weighted average number of shares used in calculating basic EPS adjusted for the dilutive
effect of all potential ordinary shares from the employee incentive plan.
59
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
3 Assets and Liabilities
3.1 CASH AND CASH EQUIVALENTS
Bank balances
Short-term deposits
Consolidated Group
Parent Entity
2023
$’000
60,328
253
60,581
2022
$’000
160,543
253
160,796
2023
$’000
1,255
-
1,255
2022
$’000
580
-
580
Cash and cash equivalents
Includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of
3 months or less that are readily convertible to known amounts of cash subject to an insignificant risk of changes in value. Cash and cash
equivalents are controlled by the Group and the contractual rights transfer to the Company substantially all of the benefits and risks
of ownership.
Cash at bank and short-term deposits earn interest at floating rates at an average interest rate of 2.81% pa (2022: 0.60% pa).
Short-term deposits have an average maturity of 90 days (2022: 90 days) and are highly liquid.
Restricted client trust funds
Restricted client trust funds
Restricted client trust funds for salary packaging
Consolidated Group
2023
$’000
2022
$’000
402,608
(402,608)
439,694
(439,694)
Restricted client trust funds recognised in the Statement of Financial Position
Pursuant to contractual arrangements with clients, GRS administers cash flows on behalf of clients as part of the remuneration benefits
administration service. These funds are for the purpose of making salary packaging payments on behalf of those clients only and therefore
not available for use in the Group’s operations. These funds are not available to be used to settle group liabilities and are held on trust for the
benefit of those clients. The Group has recognised these funds in the Statement of Financial Position.
The cash in the Restricted client trust funds is held in bank accounts specifically designated as funds in trust for clients, with all client trust
funds segregated from the Group’s own cash. Pursuant to contractual arrangements, the Group may earn interest from these client funds held
in trust. The average interest rate on Restricted client trust funds for the year ended 30 June 2023 was 2.94% (2022: 0.40%). The Parent
Entity does not hold any client monies.
60
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Cashflow Information
Reconciliation of cash flow from operations with profit
from operating activities after tax
2023
$’000
2022
$’000
2023
$’000
2022
$’000
Consolidated Group
Parent Entity
Profit for the year
Non-cash flows in profit from operating activities
Amortisation
Depreciation
ROU assets depreciation
Impairment
Share based expenses
Loss on disposal of subsidiary
Other
Changes in assets and liabilities
Decrease / (increase) in trade receivables and other assets
(Increase) / decrease in finance lease receivables principal
repayments and disposals
Increase in assets under lease
Decrease in written down value of assets sold
(Decrease) in trade payables and accruals
Increase / (decrease) in income taxes payable
(Decrease) / increase in deferred taxes
(Decrease) in unearned revenue
(Decrease) in provisions and accruals
Net cash from operating activities
32,272
70,349
75,909
47,440
2,268
63,189
4,019
43,374
1,243
-
-
2,431
60,107
6,498
6,028
1,607
1,221
(253)
-
-
-
17,290
1,243
-
-
-
-
-
-
1,607
-
-
2,616
766
(61)
(355)
(86,207)
(33,830)
52,311
(2,158)
9,861
(1,817)
(346)
(62,188)
24,607
22,393
(55,679)
40,203
(24,635)
(2,933)
19,227
(4,021)
(23,364)
119,945
-
-
-
(858)
(1,235)
(704)
-
-
-
-
-
(120)
82
(551)
-
-
91,584
48,103
Cash from operating activities
Cash flows other than investing or financing are classified as cash from operating activities. As the AMS segment provides operating and
finance leases for motor vehicles and equipment, the cash outflows to acquire the lease assets as well as interest received and interest paid
are classified as operating cash outflows.
61
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Net debt reconciliation
A summary of the movement in borrowings (excluding capitalised borrowing costs) affecting financing cash flows during the year is
provided below:
Financing cashflow from liabilities
Borrowings (excluding capitalised borrowing costs)
Payable due to wholly owned entities
Financing liabilities
Movements during the year
Liabilities at start of the year
Cash flows relating to borrowings
Cash flows relating to payables due to wholly owned entities
Non-cash settlement of payables due to wholly owned entities
Foreign exchange adjustments
Liabilities at end of the year
3.2 TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Other receivables
Amounts receivable from wholly owned entities
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
278,616
167,967
-
-
2023
$’000
60,000
56,335
278,616
167,967
116,335
167,967
113,871
(8,738)
6,094
(578)
176,808
(16,203)
-
9,711
(2,349)
25,576
60,000
31,247
(488)
-
2022
$’000
-
25,576
25,576
21,162
(9,752)
13,013
1,153
-
278,616
167,967
116,335
25,576
Consolidated Group
Parent Entity
2023
$’000
23,978
16,007
-
2022
$’000
31,781
3,486
-
39,985
35,267
2023
$’000
-
-
448
448
2022
$’000
-
-
496
496
Trade receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of business and held with the objective
of collecting cash flows. They are generally settled within 30 days. The carrying amount includes a total loss allowance of $1,608,000
(2022: $1,262,000) which includes a specific doubtful debts allowance of $131,000 (2022: $284,000). The carrying amount is generally
considered to equal their fair value.
Other receivables
None of the other receivables are impaired or past due.
62
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
3.3 FINANCE LEASE RECEIVABLES
Current finance lease receivables
Non-current finance lease receivables
Consolidated Group
Parent Entity
2023
$’000
22,794
86,327
109,121
2022
$’000
14,609
13,531
28,140
2023
$’000
2022
$’000
-
-
-
-
-
-
The Onboard Finance and AMS finance lease contracts entered into are recognised as finance lease receivables and classified as financial
assets measured at amortised cost as the contract transfers substantially all the risks and rewards of ownership of an underlying asset.
The net investment in the lease equals the net present value of the future minimum lease payments. Finance lease income is recognised as
income in the period to reflect a constant periodic rate of return.
Amounts receivable under finance lease receivables
Within one year
Later than one but not more than five years
Later than five years
Less: Unearned finance income
Present value of minimum lease payments
Fair value of finance lease receivables
Consolidated Group
Minimum
lease
payments
2023
$’000
Present value
of lease
payments
2023
$’000
Minimum
lease
payments
2022
$’000
Present value
of lease
payments
2022
$’000
26,249
93,676
51
119,976
(10,855)
109,121
22,795
86,275
51
109,121
-
109,121
110,210
15,564
15,182
118
30,864
(2,724)
28,140
14,609
13,421
110
28,140
-
28,140
28,541
Fair values were calculated based on cash flows discounted using an average of current lending rates appropriate for the geographical markets
the leases operate of 11.45% pa (2022: 4.81% pa).
INVENTORIES
3.4
Motor vehicles are stated at the lower of cost and net realisable value. Following termination of a lease or rental contract, the relevant assets
are transferred from assets under operating lease to Inventories at their carrying amount. Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs to make the sale.
63
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
3.5 ASSETS UNDER OPERATING LEASE
Assets held under operating lease terminating within
the next 12 months
Assets held under operating lease terminating after
more than 12 months
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
2023
$’000
2022
$’000
58,179
73,945
146,778
149,722
204,957
223,667
-
-
-
-
-
-
Depreciation rate (range)
At cost
Accumulated depreciation
Net carrying value
Movements during the year
Balance at start of the year
Additions
Disposals/transfers to inventory
Depreciation expense
Residual value adjustment
Change in foreign currency
Assets held for sale
Balance at end of the year
Consolidated Group
2023
$’000
2022
$’000
20% - 33%
20% - 33%
337,699
(132,742)
359,901
(136,234)
204,957
223,667
223,667
80,742
(49,310)
(48,801)
129
(501)
(969)
210,318
102,488
(43,649)
(48,689)
2,901
298
-
204,957
223,667
Assets held under operating leases are for contracts with customers other than finance leases. The initial investment in the lease is added
as a cost to the carrying value of the leased assets and recognised as lease income on a straight line basis over the term of the lease.
Operating lease assets are depreciated as an expense on a straight line basis over the term of the lease based on the cost less residual value
of the lease.
Assets held under operating lease include an accumulated provision for impairment loss at reporting date of $3,189,000 (2022: $3,899,000).
64
MMS ANNUAL REPORT 2023 Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
Provision for residual value
The provision estimates the probable diminution in value of operating lease and rental assets at the end of lease contract dates.
The estimate is based on the deficit in estimated recoverable value from contracted cash flows.
A residual value provision is also recognised for the estimated loss in recoverable value of lease assets which are transferred to the
Group at the end of the lease term pursuant to some P&A arrangements with financiers and other residual value guarantees. The asset
from the financier is acquired at its residual value on termination of the lease which creates an exposure of the carrying value to the
expected market price for which the potential impact is assessed at reporting and the shortfall provided for.
Key judgement: Lease assets residual value
Operating leases carry an inherent risk for the residual value of the asset. Estimates of significance are used in determining the residual
values of operating lease and rental assets at the end of the contract date. The assessment includes forecasts of the future value of the
asset lease portfolio at the time of sale and considers the potential impact of economic and vehicle market conditions and dynamics.
Under the P&A financing arrangement with external financiers, the Group acquires the lease assets on the termination of the lease
contract and is thereby exposed to the residual value of the underlying asset. A provision is recognised when the estimated residual
value is lower than the assessment of the future value of the P&A funded assets.
If the estimated residual values reduced by 5%, this would result in an increase in the impairment loss provision by $1.6m.
3.6 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
The Group acts as a lessee in operating lease arrangements for the use of property and equipment.
Right-Of-Use Assets
At cost
Accumulated depreciation
Net carrying value
Movements during the year
Balance at start of the year
New assets leased
Depreciation
Disposal of subsidiary
Change in foreign currency
Assets held for sale
Balance at end of the year
Consolidated Group
Parent Entity
2023
$’000
77,312
(47,258)
30,054
35,982
185
(5,686)
-
29
(456)
30,054
2022
$’000
78,631
(42,649)
35,982
40,511
3,778
(6,498)
(1,736)
(73)
-
35,982
2023
$’000
2022
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65
MMS ANNUAL REPORT 2023
Lease liabilities
Movements during the year
Balance at start of the year
New assets leased
Finance charges
Lease payments
Lease incentives
Disposal of subsidiary
Change in foreign currency
Assets held for sale
Balance at end of the year
Carrying value of lease liabilities
Current
Non-current
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
2023
$’000
2022
$’000
51,064
186
1,795
(8,224)
2,116
-
40
(464)
46,513
5,130
41,383
46,513
48,875
3,778
1,769
(8,696)
7,300
(1,887)
(75)
-
51,064
4,212
46,852
51,064
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Recognition and measurement of lease assets and liabilities
ROU assets and the lease liability are initially measured on a present value basis. Leases brought to account are for the value of the
property and exclude non lease components.
Lease liabilities include the net present value of fixed rental payments less any lease incentives receivable plus any rental adjustments
where the extensions available under the lease will probably be exercised. Lease payments are discounted using the Group’s incremental
borrowing rate.
ROU assets are measured at cost comprising the amount of the initial measurement of the lease liability, any initial direct costs and any
provision for make-good or restoration. ROU assets are depreciated over the shorter of the asset’s useful life and lease term on a straight
line basis.
Short term leases of less than 12 months and low value leases are expensed on a straight line basis to the profit or loss.
The principal portion of payments is included in financing activities in the Statements of Cash Flows and the finance charges is included
in operating activities.
66
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
INTANGIBLE ASSETS
3.7
The Group’s intangible assets comprise goodwill, brands, dealer relationships, customer lists and relationships, software development costs,
and contract rights.
2023
Useful life range
Brands –
indefinite
life
$’000
Indefinite
Goodwill
$’000
Not
applicable
Cost
216,292
23,073
Accumulated amortisation
-
Accumulated impairment loss
(168,013)
(14,269)
Assets held for sale
Net carrying value
Reconciliation of written
down values
(7,708)
40,571
(7,404)
1,400
Balance at start of the year
88,425
9,902
Additions
Amortisation
Impairment
Transfer of items to PPE
Changes in foreign currency
Assets held for sale
Balance at end of the year
-
-
-
-
(41,436)
(1,098)
-
1,291
(7,709)
40,571
-
-
(7,404)
1,400
2022
Useful life range
Brands –
indefinite
life
$’000
Indefinite
Goodwill
$’000
Not
applicable
Cost
201,026
23,073
Accumulated amortisation
-
-
Accumulated impairment loss
(112,601)
(13,171)
Net carrying value
88,425
9,902
Reconciliation of written
down values
Balance at start of the year
87,862
9,272
Additions
Additions from business
combinations
Disposal of subsidiary
Impairment
Amortisation
Accounting standard
adoption reclassification
-
7,215
-
(6,028)
-
-
Changes in foreign currency
Balance at end of the year
(624)
88,425
-
630
-
-
-
-
-
9,902
2–6
years
6,598
(6,598)
-
-
-
-
-
-
-
-
-
-
-
2–6
years
6,598
(6,598)
-
-
-
-
-
-
-
-
-
-
-
Consolidated Group
Brands –
finite life
$’000
Dealer
relationships
$’000
Customer
lists and
relationships
$’000
Software
development
costs
$’000
6–13
years
13,876
(3,284)
(6,990)
(1,944)
1,658
5–13
years
8,166
(5,155)
-
(2,906)
105
3–5
years
-
(388)
21,863
79,158
13,132
(56,907)
(13,132)
4,621
3,918
-
-
28,682
11,912
(1,316)
(952)
(10,529)
-
-
297
(1,944)
1,658
-
-
45
(2,906)
105
Consolidated Group
-
(7,814)
-
(388)
21,863
Brands –
finite life
$’000
Dealer
relationships
$’000
Customer
lists and
relationships
$’000
Software
development
costs
$’000
6–13
years
14,010
(2,399)
(6,990)
4,621
6,106
-
-
-
-
5–13
years
7,942
(4,024)
-
3–5
years
-
77,972
13,139
(49,290)
(13,139)
3,918
28,682
965
-
4,057
-
-
30,647
8,188
377
(291)
-
(1,345)
(1,085)
(9,444)
-
(140)
4,621
-
(19)
(795)
-
3,918
28,682
Contract
rights
$’000
Contract
life
-
-
-
-
-
-
-
-
-
-
-
Contract
rights
$’000
Contract
life
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
360,295
(85,076)
(189,272)
(20,350)
65,597
135,548
11,912
(12,797)
(42,534)
(7,814)
1,633
(20,351)
65,597
Total
$’000
343,760
(75,450)
(132,762)
135,548
134,852
8,188
12,279
(291)
(6,028)
(11,874)
(795)
(783)
135,548
67
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Goodwill
Goodwill represents the excess of the cost of the business combination over the Group’s share of the net fair value of the identifiable assets,
liabilities and contingent liabilities of the acquired entity. Goodwill is measured at cost less any accumulated impairment losses and is reviewed
for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains
and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Any impairment is recognised
immediately in the profit or loss.
Identifiable intangible asset acquired from business combination
Brands, dealer relationships and customer lists and relationships acquired in a business combination are recognised at their fair value at
the date of acquisition. Following initial recognition, these assets are carried at their initial value less any accumulated amortisation and
accumulated impairment.
Identifiable intangible assets with finite lives are amortised over their estimated useful lives on a straight line basis and assessed for
impairment annually. Brand names that have indefinite useful lives are not amortised but are subject to annual impairment assessments.
Brands are assessed for impairment as part of the relevant cash generating unit (CGU). Brand names that have an indefinite life are pursuant
to the Group’s plan for its continued use into the foreseeable future are expected to continue to generate cash flows indefinitely. The useful life
assessment is reviewed annually.
Capitalised software development costs
Software development costs which are not acquired from a business combination are initially measured at cost and subsequently re-measured
at cost less amortisation and impairment.
Costs are capitalised when it is probable that future economic benefits will flow to the entity through revenue generation and / or cost
reduction. Costs include external direct costs for services, materials and internal labour related costs directly involved in the development of
the software and are amortised from the date of commissioning on a straight line basis over three to five years, during which the benefits are
expected to be realised.
Software-as-a-Service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider’s application
software over the contract period. As such the Group does not receive a software intangible asset at the contract commencement date. Fees
for the use of the application software and customisation costs are recognised as an operating expense over the contract term if not distinct
while other configuration, data conversion, testing and training costs are expensed as the service is received. Other costs which give rise to a
separate intangible asset are recognised as capitalised software development costs.
Contract rights
Contract rights not acquired from a business combination are initially measured at cost being the amounts paid plus any expenditure
directly attributable to the transactions and subsequently measured at cost less amortisation and impairment. Contract rights are amortised
over the life of the contract and reviewed annually for indicators of impairment.
Impairment test of Goodwill
An impairment loss is recognised in the profit or loss for the amount that the asset’s carrying value exceeds the recoverable amount.
Recoverable amount is determined as the higher of the asset’s fair value less costs to sell and value-in-use (VIU). For the purpose of assessing
fair value, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of
cash inflows from other assets (CGUs). Where the asset does not generate independent cash flows, the Group estimates the recoverable
amount of the CGU to which the asset belongs.
Key judgement: Assessment of recoverable amount
Recoverable amounts of CGUs have been determined using the VIU methodology. The variables used require the use of assumptions that
affect earnings projections and the estimation of a discount rate that uses a cost of capital and risk premium specific to the CGU amongst
other factors.
Cash projections used in the financial models to assess the recoverable amount of goodwill and indefinite life intangible assets required
significant estimates in uncertain economic and business environments. These are discussed in more detail below.
The carrying amount of goodwill is allocated to the Group’s CGUs based on the organisation and management of its businesses.
Set out below are the details of the goodwill allocated to the CGUs as well as the value of intangibles
68
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Maxxia Pty Limited (Maxxia)
Remuneration Services (Qld) Pty Limited
(RemServ)
Anglo Scottish Asset Finance Limited (ASF)
Retail Financial Services aggregation
business (RFS Aggregation)
Plan Tracker Pty Ltd (Plan Tracker)
OnBoard Finance Pty Ltd
Other
Consolidated Group
Goodwill
Intangibles
2023
$’000
2023
$’000
Total
2023
$’000
Goodwill
Intangibles
2022
$’000
2022
$’000
Total
2022
$’000
24,190
12,272
36,462
24,190
16,733
40,923
9,102
3,378
12,480
9,102
-
-
7,215
-
-
-
-
3,347
4,578
1,515
40,507
25,090
-
-
10,562
4,578
1,515
65,597
5,077
3,592
14,179
19,616
16,024
31,894
11,536
43,430
7,215
-
-
4,160
4,588
1,437
11,375
4,588
1,437
88,425
47,123
135,548
Key Assumptions used for VIU calculations
Cash flow projections
Cash flow projections are based on the financial year 2024 (FY24) budgets. Growth assumptions used for subsequent years reflect strategic
business plans and forecast growth rates. Financial projections also take into account any risk exposures in changes to the trading, market
and regulatory environments.
The after-tax discounted cash flow (DCF) models were based on after-tax cash flows discounted by an after-tax discount rate.
Cashflows beyond five years are extrapolated using growth rates of 2.0% pa (2022: 2.0% pa), which is lower than long term consumer
price index (CPI).
GRS CGUs
The Maxxia and RemServ CGUs that form the GRS business operate largely in the same business environment and are exposed to similar
risks. The equivalent pre-tax discount rate of 19.7% (2022:17.4%) was applied in the VIU calculation.
VIU cash flow projections for GRS CGUs are substantially higher than the carrying value of the CGUs and any reasonable changes to the key
assumptions would not cause an impairment. A key assumption for the GRS CGUs is that there are no significant changes to Australian tax
legislation that could affect the salary packaging and novated lease businesses.
PSS CGUs
The Plan Tracker business was acquired 1 July 2021 with goodwill and other intangibles recognised on acquisition and is a CGU within
the PSS business. Goodwill has been allocated fully to the Plan Tracker CGU given that they will benefit from the synergies of the business
combination. The equivalent pre-tax discount rate of 19.7% pa (2022: 17.4% pa) was applied in the VIU calculation.
The Group has reviewed actual and forecast performance to assess impairment using VIU cash flow projections which exceed the carrying
value of the CGU indicating no impairment exists. The FY24 budget growth expectations are reflective of the growth achieved in FY23. The
Group has considered the impact of changes in key assumptions on the impairment testing results and the recoverable amount exceeds the
carrying amount when testing for any reasonable possible changes in key assumptions.
AMS CGUs
For the year ended 30 June 2023 the ASF and RFS Aggregation CGUs have been classified as held for sale, and the assessment of the
carrying value has been made against fair value less selling costs. Refer Note 6.3 for further details.
69
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 3.8 TRADE AND OTHER PAYABLES
Unsecured liabilities
Trade payables
GST payable
Accrued expenses
Sundry creditors
Amounts payable to wholly owned entities
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
2023
$’000
2022
$’000
15,784
522
29,117
27,694
-
18,282
2,339
38,079
25,035
-
73,117
83,735
-
-
-
-
56,335
56,335
-
-
-
366
25,576
25,942
Trade and other payables from normal business activities are non-interest bearing and are short term in nature. They are recognised initially at
fair value and subsequently at amortised cost. Due to short term nature, carrying value approximates fair value.
3.9 CONTRACT LIABILITIES
Maintenance fees received in advance
Rebates and cancellations
Consolidated Group
Parent Entity
2023
$’000
4,489
984
5,473
2022
$’000
5,606
2,217
7,823
2023
$’000
2022
$’000
-
-
-
-
-
-
Maintenance fees received in advance
Maintenance fees received in advance is income from maintenance service contracts that are unearned based on the historical profile of costs
incurred to date over the expected total cost. Profit attributed over the life of the contract and losses that are provided in full in the period that
the loss-making contract is first determined, are adjusted in the amount of revenue recognised.
Rebates and cancellations
Brokerage commissions from the provision of financial services allow that rebates paid to its dealer / broker network and commissions
received from the origination business may be clawed back by the financial service providers. The potential for rebates and clawback are
calculated based on the historical profile of rebates and commissions.
3.10 OTHER LIABILITIES
Customer receipts in advance
Other
Consolidated Group
2023
$’000
3,389
9,464
12,853
2022
$’000
2,974
15,940
18,914
Parent Entity
2023
$’000
2022
$’000
-
-
-
-
-
-
70
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 3.11 PROVISIONS
Current
Employee benefit liabilities
Employee incentives
Other provisions
Non-current
Employee benefit liabilities
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
2023
$’000
2022
$’000
13,244
13,175
837
606
-
220
14,687
13,395
2,006
2,006
1,195
1,195
-
-
-
-
-
-
-
-
-
-
-
-
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and where it is
probable that the Group is required to settle the obligation, and the obligation can be reliably estimated. Provisions are measured at the
present value of expenditure expected at settlement.
Employee benefits
Employee entitlements to annual and long service leave have been provided for based on amounts expected to be paid when the leave
entitlements are used.
Annual leave and long service leave that are not expected to be settled wholly within 12 months have been measured at the present value
of the estimated future cash outflows. Expected future payments are discounted using interest rates attaching to high quality corporate bonds
with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Employee benefit liabilities
Other provisions
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
Movement during the year
Balance at start of the year
Employee benefits earned
and accrued
Payments
Write offs and adjustments
Provision made
14,358
10,331
(9,532)
93
-
14,765
8,225
(8,632)
-
-
-
837
-
-
-
Balance at end of the year
15,250
14,358
837
-
-
-
-
-
-
220
-
-
(234)
620
606
441
-
(271)
-
50
220
71
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
4 Capital Management
This section provides information relating to the Group’s capital structure and its exposure to financial risks, how they affect the Group’s
financial position and performance, and how the risks are managed.
The Group’s capital management strategy aims to safeguard its ability to continue as a going concern, so that it can continue to provide
returns for shareholders and benefits for other stakeholders. In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors
capital on the basis of a number of metrics such as the gearing ratio, interest cover, debt to EBITDA and various other metrics.
The capital structure of the Group is reviewed on an ongoing basis and considers the allocation and type of capital, and the associated
risks and returns.
4.1 BORROWINGS
Current
Bank loans
Other external loans payable
Non-current
Bank loans
Other external loans payable
Total borrowings
Consolidated Group
Parent Entity
2022
$’000
2023
$’000
2022
$’000
2023
$’000
-
3,800
3,800
15,851
-
15,851
-
-
-
268,722
142,222
60,000
6,094
274,816
278,616
9,711
151,933
167,784
-
60,000
60,000
-
-
-
-
-
-
-
Borrowings are initially recorded at fair value, net of transaction costs and subsequently measured at amortised cost using the effective
interest rate method. The effective interest rate method exactly discounts the estimated cash flows through the expected life of the borrowing.
Transaction costs comprise fees paid for the establishment of loan facilities and are amortised over the term of the borrowing facilities.
The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to the Group for similar financial instruments. The fair value of current borrowings approximates the carrying
amount, as the impact of discounting is not significant.
Security and financial covenants
The Parent Entity guarantees all bank loans of subsidiaries in the Group, totalling $278,442,000 (2022: $167,601,000).
Fixed and floating charges are provided by the Group in respect to financing facilities provided by its syndicate of financiers. The assets
identified in Note 3.5 form part of the security.
Loans are also secured by the
following financial undertakings
from all entities in the Group:
> Negative pledge that imposes certain covenants including a restriction to provide
other security over its assets, cap on its maximum finance debt, acquire assets which
are non-core business to the Group, not to dispose of a substantial part of its business
and reduction of its capital;
> Maintenance of certain financial thresholds for shareholders’ equity, gearing ratio
and fleet asset portfolio performance; and
> Various business parameters of the Interleasing Group and Maxxia Finance Ltd.
The Group operated with significant headroom against all of its borrowing covenants at all times.
72
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
4.2
ISSUED CAPITAL
Share capital – Group and Parent Entity
Movements in share capital are shown below:
Shares issued at 1 July 2022
Treasury shares acquired on-market
Shares held by external shareholders at start of the year
Treasury shares distributed in the period on the exercise of employee rights
Shares repurchased in the period from the off-market share buy back
Shares held by external shareholders at 30 June 2023
Shares held by external shareholders at 30 June 2022
Number
of shares
Issue
price
77,381,107
(92,759)
77,288,348
92,759
(7,738,083)
69,643,024
77,381,107
$0.99
Ordinary
shares
$’000
76,257
-
76,257
-
(7,661)
68,596
76,257
Ordinary shares and premiums received on issue of options are classified as issued capital.
Costs attributable to the issue of new shares or options are deducted from the equity proceeds, net of any income tax benefit, except with
the acquisition of a business which are included as part of the business combination.
Shares purchased by the Company or any entity in the Group are classified as treasury shares and the incremental cost of acquiring those
shares is deducted from share capital.
Ordinary shares participate in dividends and the proceeds on winding up of the Parent Entity in proportion to the number of members’
shares held. At members’ meetings, each fully paid ordinary share is entitled to one vote when a poll is called, otherwise each shareholder
has one vote on a show of hands.
Treasury shares
The Group maintains the McMillan Shakespeare Limited Employee Share Plan Trust (EST) to facilitate the distribution of McMillan
Shakespeare Limited shares under the Group’s Long Term Incentive Plan (LTIP). The EST is controlled by McMillan Shakespeare Limited
and forms part of the Group.
Treasury shares are shares in McMillan Shakespeare Limited that are held by the EST for the purpose of issuing shares under the LTIP.
Treasury shares are deducted from issued shares to show the number of issued shares held by external shareholders.
Share Buy Back
On 24 October 2022, the Company completed an off-market share buy-back of fully paid ordinary shares at $11.66 per share that was
funded from existing cash reserves of $90,226,048. The share buy-back comprised a capital component of $0.99 per share which reduced
share capital by $7,660,702, and a fully franked dividend per share of $10.67 that was distributed out of retained earnings of $82,565,346.
73
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
4.3 DIVIDENDS
Final fully-franked ordinary dividend for the year ended
30 June 2022 of $0.74 (2022: $0.31) per share franked at
the tax rate of 30% (2022: 30%)
Interim fully-franked ordinary dividend for the year ended
30 June 2023 of $0.58 (2022: $0.34) per share franked at
the tax rate of 30% (2022: 30%)
Franking credits available for subsequent financial years
based on a tax rate of 30% (2022: 30%)
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
2023
$’000
2022
$’00
51,536
24,065
51,536
24,065
40,393
26,310
40,393
26,310
91,929
50,375
91,929
50,375
62,547
111,500
62,547
111,500
Dividends are recognised when the Company’s right to receive payment is established. They are brought to account when declared and
appropriately authorised before the end of the financial year but not distributed at reporting date.
The consolidated amounts include franking credits that would be available to the Parent Entity if distributable profits of subsidiaries were
paid as dividends.
4.4 FINANCIAL RISK MANAGEMENT
The Group maintains a Risk Management Framework to support the identification, assessment, management, monitoring, and reporting of
internal and external sources of risk that could impact on the Group’s operations and strategic objectives.
Risk Management is a continuous process that is embedded within day-to-day operational activities of the Group with active involvement of
the Executive Leadership Team and oversight from the Audit, Risk & Compliance Committee (ARCC), and the Board.
Financial risks of the Group are
monitored by the Board through:
> Active management of credit, residual value, liquidity, funding, and interest rate risks
in line with policies approved by the Board.
> Ongoing oversight of the Group’s financial risk profile by the Executive Credit, Residual
Value, and Interest Committee’s.
> Regular reporting of the Group’s financial risk profile (including compliance with Board’s
Risk Appetite Settings) to the Board Audit, Risk & Compliance Committee, and the Board.
> The Group’s Internal Audit function also periodically reviews and provides independent
assurance regarding the adequacy of controls and processes for managing risks and
compliance obligations.
74
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 In the normal course of business, the Group is exposed to various risks as set out below:
Risk
Exposure
Response
Liquidity
risk
Credit risk
Risk that the Group will not
be able to meet its financial
obligations as they fall due.
The The AMS and GRS
businesses borrowings
exposes the Group to
potential mismatches
between the refinancing of
its assets and liabilities.
Risk of financial loss if a
customer or counterparty
to a financial instrument
fails to meet its contractual
obligations.
Exposure to credit risk is
through the receivables
balances, customer leasing
commitments, deposits with
banks and counterparty risks
associated with interest and
currency swaps.
Market risk
Interest
rate risk
Movements in interest
rates could directly affect
the margins from existing
contracts and the pricing
of new contracts for assets
leased and income earned
from surplus cash.
Borrowings issued at variable
rates expose the Group to
repricing interest rate risk.
Maintain continuity and flexibility of funding through the use of committed revolving
bank club facilities based on common terms, asset subordination and surplus cash to
match asset and liability requirements.
Ensure there is sufficient liquidity through access to committed available funds to
meet at least 12 months of average net asset funding requirements augmented with
uncommitted P&A facilities. This level is expected to cover any short-term financial
market constraint for funds.
The Group monitors daily operating cash flows and forecast cash flows for a 12 month
period. Significant cash deposits have been maintained which enable the Group to settle
obligations as they fall due without the need for short-term financing facilities.
For deposits with banks, only independently rated institutions with upper investment-
grade ratings are used, in accordance with the Board approved Investment Policy.
Leasing credit risk is managed pursuant to the Board approved Credit Policy. The policy
is reviewed annually and prescribes minimum criteria in the credit assessment process
that includes the credit risk rating of the customer, concentration risk parameters, type
and intended use of the asset and the value of the exposure.
A two-tiered Credit Committee structure is in place to stratify credit applications for
assessment; a Local Credit Committee and an Executive Credit Committee reviewing
applications based on volume, nature and value of the application.
The Board receives regular reports from the Credit Committee and periodically reviews
concentration limits that effectively spread the risks as widely as possible across asset
classes, client base, industries, regions and asset manufacturers.
Credit risk concentration is spread through exposure to individual customers, industry
sectors, asset types, asset manufacturers or regions.
Where customers are independently rated, these ratings are taken into account. If there
is no independent official rating, the credit quality is assessed using the Group’s internal
risk rating tool, taking into account information from an independent national credit
bureau, its financial position, business segment, past experience and other factors using
an application scorecard or other risk-assessment tools.
Collateral is obtained where appropriate, to mitigate the risk of financial loss from defaults.
Debtor ageing and the provision for impairment are reviewed monthly by the Board.
Treasury and pricing policies aim to minimise mismatches between the amortised value of
lease contracts and the sources of financing to mitigate repricing and basis risk. Mismatch
and funding graphs including sensitivity analysis, are reported monthly to the Board.
The Group has entered into interest rate swaps with counterparties rated as AA- by
Standard & Poor’s to exchange, at specified periods, the difference between fixed and
variable rate interest amounts calculated on contracted notional principal amounts. Swaps
are designated to hedge underlying borrowing obligations and match the interest repricing
profile of the lease portfolio in order to preserve the contracted net interest margin.
75
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 Risk
Exposure
Response
Translation related risks from financial and non-financial items of the New Zealand
entities do not form part of the Group’s risk exposure given these entities are part of
longer-term investments and consequently, their sensitivity to foreign currency
movements are not measured.
The Group’s transactions are predominantly denominated in Australian dollars which
is the predominant functional currency and the presentation currency of the Group.
Continuous review of the portfolio’s residual values via a Residual Value Committee
comprising experienced senior staff with a balance of disciplines and responsibilities,
who measure and report all matters of risk that could potentially affect residual values
and maintenance costs and matters that can mitigate the Group from these exposures.
The asset risk policy sets out a framework to measure and factor into their assessment
such critical variables as used car market dynamics, economic conditions, government
policies, the credit market and the condition of assets under lease.
Foreign
currency
risk
Asset risk
Foreign currency risk arises
from holding financial
instruments that are
denominated in a currency
other than the functional
currency in which they are
measured.
Asset risk is mainly from
the residual value of assets
under lease and the tyre and
maintenance obligations to
meet claims for these services
sold to customers. Residual
value is an estimate of the
value of an asset at the end
of the lease. The estimate is
formed at the inception of the
lease and any subsequent
impairment, exposes the
Group to potential loss from
resale if the market price
is lower than the value as
recognised.
Risk relating to tyre and
maintenance services arises
where the costs to meet
customer claims over the
contracted period exceed
estimates made at inception.
76
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 (a) Liquidity risk
Financing arrangements
Committed borrowing facilities for the AMS and GRS businesses to finance their fleet management portfolio and other borrowing
requirements not used to finance the fleet management portfolio are as follows:
Borrowing facilities in local
Currency (AUD ‘000)
2023
2022
Facility
Used
Unused
Facility
Used
Unused
AMS Borrowing facilities
194,265
140,468
53,797
204,945
158,256
46,689
Warehouse facilities
135,640
68,080
67,560
100,000
Other borrowing facilities
60,000
60,000
-
-
-
-
100,000
-
Total borrowings1
389,905
268,548
121,357
304,945
158,256
146,689
1 Borrowings do not include capitalised borrowing costs of $174,000 (2022: $183,000).
Details of fleet management portfolio facilities in local currency are as follows:
Secured bank borrowings
(excluding borrowing costs)
Maturity
dates
2023
2022
Facility
Used
Unused
Facility
Used
Unused
AUD’0001
AUD’0001
AUD’0001
AUD’0001
AUD’0002
AUD’0003
NZD’0001
NZD’0001
NZD’0001
NZD’0001
GBP’000
31/03/2024
31/03/2025
30/06/2025
30/06/2025
10/02/2026
25/08/2027
31/03/2024
31/03/2025
30/06/2025
30/06/2026
31/03/2023
-
95,000
10,000
48,000
135,640
60,000
-
11,000
20,000
11,000
-
-
54,600
10,000
48,000
68,080
60,000
-
7,600
15,000
7,600
-
1 AMS Revolving facility.
2 Onboard Warehouse Trust 2021-1 facility.
3 Parent entity revolving facility.
-
40,400
58,000
95,000
58,000
57,600
-
37,400
-
-
-
-
67,560
100,000
-
-
3,400
5,000
3,400
-
-
29,000
11,000
-
-
-
-
-
-
23,100
6,600
-
-
-
-
100,000
-
5,900
4,400
-
-
-
9,000
9,000
Revolving facilities above have been provided by a financing club of three major Australian banks operating under common terms and
conditions. Borrowings are denominated in the local currency of the principal geographical markets to remove associated foreign currency
cash flow exposure.
AMS P&A borrowing facilities held off balance sheet
The borrowing facilities are further augmented by P&A facilities of $249.7 million of which $104.2 million is utilised (2022: $232.3 million
with $90.2 million utilised) and associated residual value facilities totalling $123.0 million and $66.4 million utilised (2022: $123.0 million,
$59.7 million utilised). The Group carries a residual value exposure in relation to some P&A facilities that revert the lease asset to the
Group at the termination of the lease.
The residual value was assessed at the lower of book value and estimated disposal value resulting in a provision for loss in value of
$0.7 million for assets identified to be possibly below book value.
The Group believes that the balanced arrangement of internal funded fleet assets and the use of P&A facilities improves liquidity,
provides funding diversification and helps to optimise capital management.
77
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 Maturities of financial liabilities
The table below summarises the maturity profile of the Group and the parent entity’s financial liabilities based on undiscounted contractual
payments at the expected settlement dates. Contracted payments are based on amounts brought to account on the Statement of Financial
Position and property lease commitments not brought to account.
Less than
6 months
$’000
15,784
36,281
2,818
10,103
64,986
Less than
6 months
$’000
18,282
32,494
4,488
9,748
65,012
6–12
months
$’000
-
6,622
2,912
6,761
16,295
6–12
months
$’000
-
6,582
4,185
10,150
20,917
1–2
years
$’000
-
-
6,142
103,604
109,746
1–2
years
$’000
-
-
7,881
82,387
90,268
2–5
years
$’000
-
-
13,100
148,254
161,354
2–5
years
$’000
-
-
19,989
64,367
84,356
Over
5 years
$’000
-
-
22,141
-
22,141
Over
5 years
$’000
-
-
32,389
-
32,389
Less than
6 months
$’000
6–12
months
$’000
1–2
years
$’000
2–5
years
$’000
Over
5 years
$’000
Total
contractual
cashflows
$’000
15,784
42,903
47,113
268,722
374,522
Total
contractual
cashflows
$’000
18,282
39,076
68,932
166,652
292,942
Total
contractual
cashflows
$’000
Carrying
amount
$’000
15,784
42,903
46,513
268,722
373,922
Carrying
amount
$’000
18,282
40,271
51,064
167,967
277,584
Carrying
amount
$’000
Financial guarantee contracts
268,800
325,135
-
-
-
-
-
-
-
-
-
-
-
-
56,335
56,335
268,800
325,135
-
56,335
Less than
6 months
$’000
6–12
months
$’000
1–2
years
$’000
2–5
years
$’000
Over
5 years
$’000
Total
contractual
cashflows
$’000
Carrying
amount
$’000
-
-
-
-
-
-
-
-
-
-
-
-
25,942
25,942
166,652
192,594
-
25,942
Consolidated Group –
2023:
Contractual maturities
of financial liabilities
Trade payables
Other creditors and liabilities
Lease liabilities
Borrowings
Consolidated Group –
2022:
Contractual maturities
of financial liabilities
Trade payables
Other creditors and liabilities
Lease liabilities
Borrowings
Parent Entity
2023:
Contractual maturities
of financial liabilities
Amounts payable to
wholly owned entities
and other payables
Parent Entity
2022:
Contractual maturities
of financial liabilities
Amounts payable to
wholly owned entities
and other payables
56,335
25,942
Financial guarantee contracts
166,652
192,594
78
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
(b) Credit risk
The following carrying amount of financial assets represent the maximum credit exposure at reporting date:
Deposits with banks
Trade and other receivables
Finance lease receivables
Operating lease assets
Consolidated Group
Parent Entity
2023
$’000
60,581
39,985
109,121
204,957
414,644
2022
$’000
160,796
35,267
28,140
223,667
447,870
2023
$’000
1,255
448
-
-
2022
$’000
580
498
-
-
1,703
1,078
Impairment of trade receivables and finance lease receivables
Key judgement: Impairment of financial assets
Finance lease, trade and other receivables are assessed for impairment at the end of each reporting period on an ECL basis.
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all receivables as these items do
not have a significant financing component. In measuring the ECLs, the trade receivables and finance lease receivables have been
grouped based on substantially shared credit risk characteristics.
ECL for finance lease receivables includes the inherent risk attached to the credit assessment of each customer, estimate of customer
default risk, environment and inventory risk and other factors affecting recoverability.
Recoverability of trade receivables is reviewed on an ongoing basis. The expected loss rate for trade receivables is based on the
credit loss history on amounts outstanding over the previous 36 months and adjusted for forward looking factors.
Trade receivables
The loss allowance for trade receivables has been estimated as follows:
Expected loss rate (%)
Gross carrying amount
Loss allowance
Specific loss allowance
Total loss allowance
Consolidated Group
Parent Entity
2023
$’000
5.8%
25,586
1,477
131
1,608
2022
$’000
2.96%
33,042
978
284
1,262
2023
$’000
2022
$’000
-
-
-
-
-
-
-
-
-
-
79
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Ageing and expected
credit loss of trade receivables
Total
$’000
2023
Loss
allowance
$’000
Amount not
impaired
$’000
Not past due
Past due 30 days
Past due 31 – 60 days
Past due 61 – 90 days
Past due > 90 days
22,571
(1,431)
21,140
883
866
130
1,136
25,586
(63)
(44)
(7)
(63)
(1,608)
820
822
123
1,073
23,978
2022
Loss
allowance
$’000
(1,058)
(56)
(23)
(12)
(113)
(1,262)
Amount not
impaired
$’000
27,096
1,372
545
267
2,501
31,781
Total
$’000
28,154
1,428
568
279
2,614
33,043
The Group’s maximum exposure to credit risk at reporting date by geographic region is predominantly in Australia and New Zealand based on
the location of originating transactions and economic activity.
Finance lease receivables
The finance lease receivables loss provision and movements during the year is set out below:
Balance at start of the year
Expected loss allowance
Loss allowance utilised
Changes in foreign currency
Balance at end of the year
Expected credit loss provision
Consolidated Group
Parent Entity
2023
$’000
209
493
(110)
-
592
592
592
2022
$’000
747
(534)
-
(4)
209
209
209
2023
$’000
2022
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The expected credit loss rate is calculated using the credit management system’s default rate assigned for each customer adjusted by the
expected recoverable rate plus deflators for duration and other economic or business environmental factors.
Expected credit loss rate (%)
Gross carrying amount
Loss allowance
Consolidated Group
Parent Entity
2023
$’000
0.54%
109,121
592
2022
$’000
0.73%
28,672
209
2023
$’000
2022
$’000
-
-
-
-
-
-
80
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
(c) Market risk
Interest rate risk
At reporting date, the Group had the following variable rate borrowings under long-term facilities attributable to the AMS business and
other loan facilities drawn on.
AUD
NZD
GBP
2023
2022
Weighted
average
interest rate
%
5.79%
7.20%
-
Borrowings
$’000
240,680
30,700
-
Borrowings
$’000
115,600
29,700
9,000
Total AUD equivalent
268,832
5.94%
158,073
Weighted
average
interest rate
%
2.76%
3.48%
3.02%
2.91%
The weighted average interest rate on borrowings is used as an input to asset repricing decisions for the respective geographical markets
the Group operates in. Analysis of maturities is provided in Note 4.4(a).
Borrowings for the AMS business of $220,044,509 (2022: $157,440,000) were covered by interest rate swaps at a fixed rate of interest of
4.75% pa (2022: 2.32% pa).
Interest rate risk also arises from cash at bank and deposits, which are at floating interest rates.
At reporting date, the Group had the following variable rate financial assets and liabilities outstanding:
Cash and deposits
Bank loans 1
Interest rate swaps (notional amounts)
Net exposure to cash flow interest rate risk
1
Excluding capitalised borrowing costs of $174,000 (2022: $183,000) for AMS.
2023
$’000
60,581
(268,548)
220,044
12,077
2022
$’000
160,796
(158,073)
157,441
160,164
Sensitivity analysis – floating interest rates:
If the Australian interest rate weakened or strengthened by 25 basis points, being the Group’s view of possible fluctuation, and all other
variables were held constant, the Group’s post-tax profit for the year would have been $834,000 (2022: $721,000) higher or lower and
the Parent Entity $104,000 (2022: $26,000) higher or lower, depending on which way the interest rates moved based on the balances at
reporting date.
(d) Asset risk
The portfolio of motor vehicles under operating lease and the residual value of assets under P&A and other facilities of $262,627,000
(2022: $317,766,000) included a residual value provision of $3,189,000 (2022: $4,239,000). Refer Note 3.5 for further details.
81
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
4.5 FINANCIAL INSTRUMENTS
Fair value measurement
The fair value of financial assets and financial liabilities is estimated for recognition and measurement for disclosure purposes.
The below table is an analysis of financial instruments that are measured at fair value on a recurring basis subsequent to initial recognition,
grouped into the following three levels based on the degree to which the fair value is observable:
Level 1
Level 2
Level 3
Derived from quoted prices (unadjusted) in active markets for identical assets or liabilities
Derived from inputs other than quoted prices included in level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Information on the Group’s financial assets and financial liabilities measured at fair value are provided below.
Except as detailed below and in Note 3.3, the carrying amounts of financial assets and financial liabilities recognised approximate their fair
values. The fair value of borrowings is not materially different to their carrying amounts since the interest payable is close to market rates.
The carrying amount of cash, trade and other receivables, trade and other payables is assumed to be the same as their fair values, due to
their short-term nature.
Fair
Value
Hierarchy
Consolidated Group
Parent Entity
2023
$’000
2022
$’000
2023
$’000
2022
$’000
Current financial assets
Finance lease receivables measured at amortised cost
Derivatives used for hedging
Non-current financial assets
Finance lease receivables measured at amortised cost
Current financial liabilities
Contract liabilities measured at amortised cost
Customer receipts in advance measured at amortised cost
Borrowings measured at amortised cost
Lease liabilities measured at amortised cost
Non-current financial liabilities
Borrowings measured at amortised cost
Lease liabilities measured at amortised cost
3
2
3
3
3
2
3
2
3
23,941
2,037
25,978
86,269
86,269
5,473
12,853
-
5,130
23,456
14,609
2,931
17,540
13,932
13,932
7,823
18,914
15,851
4,212
46,800
-
-
-
-
-
-
-
-
-
-
268,722
41,383
310,105
142,222
46,852
189,074
60,000
-
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
There were no transfers between Level 1 and Level 2 fair value measurements during the period, and no transfers into or out of Level 3
fair value measurements during the year ended 30 June 2023.
There were no changes in the Group’s valuation processes, valuation techniques, and types of inputs used in the fair value measurements
during the period.
Interest rate swaps
The valuation technique for interest rate swaps and key inputs are discounted cash flows using estimated future cash flows based on
forward interest rates (from observable yield curves at the end of the reporting period) and contract interest rates, discounted to reflect the
credit risk of various counterparties.
82
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 Derivative financial instruments
In accordance with the Group’s treasury policy, derivative interest rate products entered into include interest rate swaps, forward rate
agreements and options as cash flow hedges to mitigate both current and future interest rate volatility that may arise from changes in
the fair value of its borrowings.
Hedge accounting
Where the Group undertakes a hedge transaction, it documents at inception of the transaction the type of hedge, the relationship between
the hedging instruments and hedged items and its risk management objective and strategy. The documentation also demonstrates, both at
hedge inception and on an ongoing basis that the hedge has been, and is expected to continue to be, highly effective.
The Group uses derivative financial instruments for cash flow hedging purposes and designates them as such.
Cashflow hedge
Recognition date
Measurement
Changes in fair value
Derivatives or other financial instruments that hedge the exposure to variability in cash flows from
external borrowings that are priced using variable interest rates.
Cash flow hedges are used to manage interest rate exposure to interest rate volatility and its impact
on leasing product margins. This process seeks to have more control in balancing the spread between
interest rates charged on lease contracts and interest rates and the level of borrowings assumed in its
financing as required.
Inception
Fair value
Any gains or losses arising from changes in the fair value of the hedge contracts are taken to OCI
to the extent of the effective portion of the cash flow hedge and the ineffective portion recognised
in profit or loss. These gains or losses in OCI are accumulated in a component in equity and are
reclassified to profit or loss to match the timing and relationship with the amount that the derivative
instruments was intended to hedge.
83
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 5 Employee Remuneration and Benefits
5.1 SHARE BASED PAYMENTS
The Company operates a LTIP for certain executives and employees under the McMillan Shakespeare Limited Employee Share Plan.
The Company issues Performance Rights annually with a three-year vesting period.
No executive can enter into a transaction that is designed or intended to hedge the exposure. Executives are required to provide
declarations to the Board on their compliance with this policy regularly.
Performance Rights
A Performance Right is an entitlement to acquire a fully paid ordinary share in the Company for $nil consideration at grant for conversion
to a share, subject to the achievement of performance hurdles and service conditions being satisfied. Performance Rights carry no dividend
or voting rights.
Performance hurdles and vesting entitlements
Refer page 28 for details of the terms and conditions for Performance Rights issued in the year.
Set out below is a summary of Performance Rights granted under the Plan:
2023
Grant date
1 July 2019
22 October 2019
20 October 2020
30 October 2020
15 October 2021
Exercise date 1
30 September 2022
30 September 2022
30 September 2023
30 September 2023
30 September 2024
22 November 2021
30 September 2024
Balance
at start of
the year
95,723
38,047
81,272
288,378
42,103
283,067
Consolidated Group and Parent Entity
Granted
Vested
Forfeited
-
-
-
-
-
-
(95,723)
(25,942)
-
-
-
-
-
-
(12,105)
(18,159)
(73,724)
(15,064)
(82,595)
-
15 November 2022
30 September 2025
-
236,748
2022
Grant date
1 July 2019
22 October 2019
20 October 2020
30 October 2020
15 October 2021
Exercise date 1
30 September 2022
30 September 2022
30 September 2023
30 September 2023
30 September 2024
22 November 2021
30 September 2024
828,590
236,748
(121,665)
(201,647)
Balance
at start of
the year
135,200
38,047
93,387
386,670
-
-
653,304
Consolidated Group and Parent Entity
Granted
Vested
Forfeited
-
-
-
-
71,731
297,507
369,238
-
-
-
-
-
-
-
(39,477)
-
(12,115)
(98,292)
(29,628)
(14,440)
(193,952)
Balance
at end of
the year
-
-
63,113
214,654
27,039
200,472
236,748
742,026
Balance
at end of
the year
95,723
38,047
81,272
288,378
42,103
283,067
828,590
1 The first available exercise date is the date that the Company’s financial statements for the respective years are lodged with ASX. For the purpose of this summary it is assumed to be
30 September of that year.
84
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Fair value of performance rights granted
Grant
15 November 2022
Consolidated Group and Parent Entity
Share price
at grant date
Expected
life (years)
Expected
dividend yield
13.31
3.0
8.1%
Fair
value
10.54
Recognition and measurement
The Performance Rights are accounted for as equity-settled share-based payments and recognised at the fair value at grant date as an
employee benefit expense over the period from issue date to vesting date with a corresponding increase in equity (share-based payment
reserve). Fair value is determined using a Black-Scholes pricing model and incorporates market conditions and does not include any conditions
that are not market based. The cumulative expense recognised is adjusted to reflect the Directors’ best estimate of the number of rights that
will ultimately vest based on the vesting conditions attached to the rights, such as the employees having to remain with the Group until vesting
date, or such that employees are required to meet financial targets. No expense is recognised for rights that do not ultimately vest.
Expenses arising from share-based payment transactions
Consolidated Group
Parent Entity
2023
$
2022
$
2023
$
2022
$
Performance Rights issued under the LTIP
1,242,810
1,605,688
1,242,810
1,605,688
1,242,810
1,605,688
1,242,810
1,605,688
5.2 KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employment benefits
Post-employment benefits
Long-term employment benefits
Share-based payments
Consolidated Group
Parent Entity
2023
$
2022
$
2023
$
2022
$
2,288,690
2,329,448
783,072
1,720,753
124,993
41,765
607,896
130,017
25,219
573,198
74,407
-
-
106,449
14,942
402,368
3,063,344
3,057,882
857,479
2,244,512
5.3 OTHER EMPLOYEE BENEFITS
Bonuses
A liability for employee benefits in the form of bonuses is recognised in the Statement of Financial Position. This liability is based upon
pre-determined plans tailored for each participating employee measured on an ongoing basis and is dependent on the outcomes for each
participating employee.
85
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
6 Group Structure
6.1
INVESTMENT IN SUBSIDIARIES
Shares in subsidiaries at cost
Consolidated Group
Parent Entity
2023
$’000
-
2022
$’000
2023
$’000
2022
$’000
-
237,533
254,822
An impairment assessment was performed and an impairment of $17.289m was recognised relating to investment in Retail Financial
Services subsidiaries.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in the relevant notes above.
Name
Parent entity
Country of incorporation
and principal place
of business
%
Owned
2023
%
Owned
2022
Principal activities
McMillan Shakespeare Limited
Australia
Subsidiaries in Group
Maxxia Pty Limited 1
Remuneration Services (Qld) Pty Limited 1
Easilease Pty Ltd
Onboard Finance Pty Ltd
MaxxiMe Pty Ltd
Interleasing (Australia) Ltd 1
TVPR Pty Ltd 1
Carila Pty Ltd 1
Presidian Holdings Pty Ltd
Money Now Pty Ltd
National Finance Choice Pty Ltd
Franklin Finance Group Pty Ltd
Australian Dealer Insurance Pty Ltd
National Finance Solutions Pty Ltd
National Insurance Choice Pty Ltd
National Dealer Services Pty Ltd
Motorsure Pty Ltd
ADU Investments Pty Ltd
United Financial Services Pty Ltd
United Financial Services Network Pty Ltd
United Financial Services (QLD) Pty Ltd
Plan Management Partners Pty Ltd
Plan Tracker Pty Ltd 2
Maxxia (UK) Limited 3
Maxxia Finance Limited
Anglo Scottish Asset Finance Limited
Capex Asset Finance Limited
Maxxia Ltd
Maxxia Limited
Maxxia Fleet Limited
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
New Zealand
New Zealand
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Remuneration services provider
Remuneration services provider
Remuneration services provider
Remuneration services provider
Remuneration services provider
Asset management and services
Asset management and services
Asset management and services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Retail financial services
Plan management services
Plan management services
Investment holding
Asset management
Asset management
Asset management
Asset management
Dormant
Asset management and services
1 These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with ASIC Corporations (Wholly-owned Companies) Instrument 2016/785
issued by the Australian Securities and Investments Commission. For further information refer to Note 6.2.
2 On 1 July 2021, the Group acquired 100% of the share capital of Plan Tracker Pty Ltd.
86
3 On 31 May 2022, the Group disposed of 100% of the share capital of CLM Fleet Management plc, The Car House Milton Keynes Limited, Corporate Vehicle Rentals Limited and Total Vehicle Mgt Limited.
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements of the Parent Entity.
6.2 DEED OF CROSS GUARANTEE
McMillan Shakespeare Limited, Maxxia Pty Ltd and Remuneration Services (Qld) Pty Ltd are parties to a deed of cross guarantee entered
into during the year ended 30 June 2009 and Interleasing (Australia) Ltd, CARILA Pty Ltd and TVPR Pty Ltd (Interleasing Group) in the year
ended 30 June 2010. Under the deeds, each company guarantees the debts of the others and is relieved from the requirement to prepare
a financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
The above companies represent a ‘Closed Group’ for the purposes of the Class Order, and as there are no other parties to the deed of dross
guarantee that are controlled by McMillan Shakespeare Limited, they also represent the ‘Extended Closed Group’.
Set out below is the financial information of the Closed Group:
Consolidated Statement of Comprehensive Income and summary of movements in Retained Earnings
Revenue and other income
Employee and director benefits expenses
Depreciation and amortisation expenses and impairment
Leasing and vehicle management expenses
Consulting cost expenses
Marketing expenses
Property and corporate expenses
Technology and communication expenses
Finance costs
Other expenses
Profit before income tax
Income tax expense
Profit attributable to members of the parent entity
Other comprehensive income
Other comprehensive income after tax
Total comprehensive income for the year
Movements in consolidated retained earnings
Retained earnings at start of the year
Profit for the year
Dividends paid
Share buy-back
Retained earnings at end of the year
Consolidated Group
2023
$’000
2022
$’000
354,874
326,047
(130,920)
(111,523)
(56,384)
(45,629)
(4,126)
(6,847)
(2,802)
(54,545)
(36,287)
(7,095)
(7,830)
(2,565)
(18,708)
(14,556)
(6,909)
(429)
82,120
(24,508)
57,612
(3,390)
(1,075)
87,181
(25,426)
61,755
-
-
57,612
61,755
195,373
57,612
(91,929)
(82,565)
78,491
183,993
61,755
(50,375)
-
195,373
87
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 Consolidated Statement of Financial Position
Current assets
Cash and cash equivalents
Trade and other receivables
Finance lease receivables
Assets under operating lease
Inventories
Total current assets
Non-current assets
Finance lease receivables
Right-of use assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Investments in subsidiaries
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Current tax liability
Borrowings
Lease Liabilities
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Lease Liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
88
2023
$’000
2022
$’000
35,073
69,321
2,604
49,773
6,195
102,406
49,086
2,000
57,091
7,179
162,966
217,762
5,278
28,844
134,601
50,015
18,370
102,402
339,510
4,729
33,649
128,208
56,825
28,628
102,402
354,441
502,476
572,203
84,768
14,578
7,840
-
4,705
111,891
2,006
172,440
40,502
33,416
248,364
81,191
13,371
2,974
-
3,369
100,905
1,193
115,447
45,167
40,777
202,584
360,255
303,489
142,221
268,714
68,759
(5,029)
78,491
142,221
76,420
(3,077)
195,371
268,714
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 6.3 DISCONTINUED OPERATIONS RELATING TO ASSETS HELD FOR SALE
On 22 August 2023 the Group signed an agreement with a consortium of funders predominantly associated with, and including,
Praetura Group (UK) to divest the UK businesses with net proceeds of approximately $20m. The UK businesses sale is subject to limited
conditions and expected to close in the first half of FY24.
On 31 July 2023, the Group completed the sale of its Australian Asset Finance Aggregation business (trading as UFS and NFC,
“Aggregation Business”).
At 30 June 2023, the UK and Aggregation Businesses were classified as discontinued operations relating to assets held for sale and
were part of the Group’s Asset Management operating segment.
The results including the Statement of Profit or Loss and Other Comprehensive Income, the major classes of assets and liabilities,
and the material net cashflows of the discontinued operations relating to assets held for sale are presented below:
Statement of Profit and Loss from discontinued operations relating to assets held for sale
Revenue
Expenses
Finance costs
Impairment loss recognised on re-measurement to fair value less selling costs
(Loss) / profit before income tax from discontinued operations relating to assets held for sale
Income tax (expense) / benefit
– Related to pre-tax profit/(loss) from discontinued operations relating to assets held for sale
– Related to re-measurement to fair value less selling costs
(Loss) / profit from discontinued operations relating to assets held for sale
2023
$’000
145,722
(136,103)
(300)
(42,534)
(33,215)
1,038
-
(32,177)
2022
$’000
175,481
(164,824)
(824)
(6,028)
3,805
(2,138)
1,808
3,475
89
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Note
2023
$’000
37,702
2,756
5,544
2,399
560
48,961
968
456
277
20,350
6,605
28,656
77,617
14,166
2,770
6,407
166
23,509
282
4,538
4,820
28,329
(2,761)
(2,761)
6.3
Statement of Financial Position
Current assets
Cash and cash equivalents
Trade and other receivables
Finance lease receivables
Inventories
Prepayments
Total current assets
Non-current assets
Assets under operating lease
Right of use assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total non-current assets
Total assets held for sale
Current liabilities
Trade and other payables
Other liabilities
Current tax liability
Lease Liabilities
Total current liabilities
Non-current liabilities
Lease Liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities directly associated with assets held for sale
Net assets directly associated with the disposal group
Amounts included in Accumulated OCI:
Reserves
FCTR relating to Disclosure group
90
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Cashflow information
Operating cashflows
Investing cashflows
Financing cashflows
Net cash (outflow)
Earnings per share
Basic EPS – (loss) from discontinued operations relating to assets held for sale
Diluted EPS – (loss) from discontinued operations relating to assets held for sale
2023
$’000
15,653
581
(26,681)
(10,447)
2023
cents
per share
(0.45)
(0.44)
91
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023 7 Other Disclosures
7.1 RESERVES
(a) Share-based payment reserve
The reserve records amounts for the fair value of share-based payments granted and recognised as an employee benefits expense
but not exercised.
The balance in reserves representing share-based equity rights and options are transferred to retained earnings upon vesting.
(b) Cash flow hedge reserve
Revaluation – gross
Deferred tax
Balance at the end of the year
Consolidated Group
Parent Entity
2023
$’000
2,037
(696)
1,341
2022
$’000
2,931
(908)
2,023
2023
$’000
2022
$’000
-
-
-
-
-
-
The hedging reserve is used to record gains and losses on interest rate swaps that are designated and qualify as cash flow hedges.
(c) Foreign currency translation reserve
The foreign currency translation reserve accumulates exchange differences arising on translation of foreign controlled entities which are
recognised in OCI. The carrying amount is reclassified to profit or loss when the net investment is disposed of.
(d) Acquisition reserve
The acquisition reserve account records amounts related to acquisition and disposal of equity interests within the Group.
INTEREST
7.2
Interest is brought to account on an accrual basis.
7.3 GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred
is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition
of the asset or as part of an item of expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST. The
net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statement of Financial Position.
7.4 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss provision. Cost includes expenditure
directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating as intended.
Depreciation is calculated on a straight line basis over the estimated useful life of the asset. The useful lives and residual value of assets are
reviewed and adjusted for impairment, if appropriate, at the end of the reporting period.
7.5 RELATED PARTY TRANSACTIONS
Transactions between the Company and other entities within the wholly owned group during the years ended 30 June 2023 and
30 June 2022 consisted of:
(a) loans advanced to the Company; and
(b) the payment of dividends to the Company.
Aggregate amounts included in the determination of profit from ordinary activities before income tax that resulted from transactions with
entities in the wholly owned group.
92
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Dividend revenue
Aggregate amounts payable to entities within the
wholly owned group at balance date:
Current receivables
Current payables
Consolidated Group
Parent Entity
2023
$
2022
$
2023
$
2022
$
-
-
-
-
-
-
91,928,792
50,375,103
448,376
498,166
56,335,334
25,576,234
7.6 AUDITOR’S REMUNERATION
In accordance with an ordinary resolution made by the Company’s members at the Annual General Meeting held on 28 October 2022
Ernst & Young (EY) were appointed auditor of the Company. This followed the resignation of the Company’s previous auditor, Grant Thornton
Audit Pty Ltd (Grant Thornton) and ASIC’s consent to the resignation in accordance with Section 329(5) of the Corporations Act 2001.
Grant Thornton Audit Pty UK LLP has been retained as the auditor for the UK based subsidiary entities.
Consolidated Group
Parent Entity
2023
$
2022
$
2023
$
2022
$
Statutory audit services
Remuneration of the auditor (EY) of the Parent Entity for
statutory audit or review of the financial report of the entity
and any other entity in the Consolidated Group
> EY
> Grant Thornton
Remuneration of the auditor of the Parent Entity for
statutory audit or review of the financial statements of
subsidiary entities in the UK (Grant Thornton).
375,000
-
-
289,500
> Grant Thornton
152,400
172,446
Other audit services related to client requirements
for non-statutory audits
> EY
> Grant Thornton
Other assurance services
Remuneration of the auditor of the Parent Entity for assurance
related services
> EY
> Grant Thornton
Remuneration of a network firm of the auditor of the Parent Entity
for assurance related services
> EY
> Grant Thornton
No non-assurance related services were provided.
38,000
4,000
-
15,200
163,000
23,000
-
248,200
-
8,822
-
8,565
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
93
MMS ANNUAL REPORT 2023Notes to the Financial StatementsFOR THE YEAR ENDED 30 JUNE 2023
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
7.7 EVENTS OCCURRING AFTER THE REPORTING DATE
On 31 July 2023, the Group completed the sale of its Australian Asset Finance Aggregation business (trading as UFS and NFC,
“Aggregation Business”). Refer note 6.3 as this business was classified as discontinued operations relating to assets held for sale
for the year ended 30 June 2023.
On 22 August 2023 the Group signed an agreement with a consortium of funders predominantly associated with, and including,
Praetura Group (UK) to divest the UK businesses with net proceeds of approximately $20m, with the sale subject to limited conditions
expected to close in the first half of FY24.
Other than the above and the matters disclosed in this report, there were no material events subsequent to the reporting date.
8 Unrecognised Items
8.1 COMMITMENTS
Operating lease commitments
All non-cancellable property leases have been recognised in the Statement of Financial Position.
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Independent Audit Report
AS AT 30 JUNE 2023
Ernst & Young
8 Exhibit ion St reet
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent Audit or’s Report t o t he Members of McMillan Shakespear e
Limit ed
Report on t he Audit of t he Financial Report
Opinion
We have audited the financial report of McMillan Shakespeare Limited (the Company) and its
subsidiaries (collectively the Group), which comprises:
► The Group consolidated and Company statements of financial position as at 30 June 2023;
► The Group consolidated and Company statements of comprehensive income, statements of
changes in equit y and statements of cash flows for the year then ended;
► Notes to the financial statements, including a summary of significant accounting policies; and
► The directors’ declaration.
In our opinion, the accompanying financial report is in accordance with the Corporations Act 2001,
including:
a. Giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2023
and of their financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis f or opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (t he Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other et hical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
A member fir m of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
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Independent Audit Report
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Key audit mat t ers
Key audit matters are those matters that , in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
1. Revenue Recognit ion
Financial report reference: Note 2.2
Why significant t o the audit
How our audit addressed t he key audit mat t er
As at 30 June 2023, Revenue from continuing
operations recorded during the year was
$464,004,000. The Group exercises significant
judgement relating to revenue recognition due
to products and services with various
contractual terms and different pricing elements
in contracts with customers throughout the
Group
The accuracy of amounts recorded as revenue is
an inherent risk due to the complexit y of billing
systems, the complexit y of customer
arrangements and price and billing changes in
the year.
This was a key audit matter due to the
significance of revenue and the complexity of
revenue arrangements.
Our audit procedures included the following:
• Obtained an understanding of the nature of
each significant type of revenue st ream, and
on a sample basis assessed agreements in
place to evaluate whether the terms of each
agreement were reflected in the accounting
treatment of the Group;
•
•
•
Identified where there is a higher risk of
error, due to manual processes, bespoke or
complex cont ract ual t erms, and areas of
judgement;
the design and operating
Evaluated
effectiveness
the
recognition and measurement of revenue
transactions,
the
relevant IT systems;
including evaluating
controls
over
of
For all significant revenue streams, for a
sample of revenue transactions recorded
during the year, we obtained supporting
evidence such as; customer cont racts, other
contractual arrangements, service detail
records and evidence of customer payment.
• We assessed the Group accounting policies
set out in Note 2.2, and the adequacy of the
financial report disclosures for compliance
with the revenue recognition requirements of
Australia Accounting Standards.
A member fir m of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
96
MMS ANNUAL REPORT 2023 Independent Audit Report
AS AT 30 JUNE 2023
2.
Impairment of Goodwill
Financial report reference: Note 3.7
Why significant t o the audit
How our audit addressed t he key audit mat t er
totals
As at 30 June 2023 Goodwill
$40,571,000, as a result of the Group’s historical
acquisitions, representing the excess of the
purchase consideration over the fair value of
assets and liabilities acquired. On acquisition
date, the Goodwill has been allocated to the
applicable Cash Generating Units (CGUs).
An impairment assessment is performed at each
reporting period, comparing the carrying amount
of each CGU containing Goodwill with
its
recoverable amount. The recoverable amount of
each CGU is determined on either a value in use
basis or a fair value less costs to sell basis.
Where a value in use basis is used, this calculation
incorporates a range of assumptions, including
future cash flows, discount rate and terminal
growth rate.
This was a key audit matter due to the size of
judgment and
Goodwill and
the significant
estimation uncertainty associated with
the
impairment assessment .
Our audit procedures in conjunction with our
valuation specialists included the following:
• Where a value in use basis was used:
•
•
•
•
•
•
Assessed the valuation met hodology
used
recoverable
to calculate
amount of each CGU.
the
Agreed the projected cash flows used in
the impairment models to the Board
approved plan of the Group.
Compared the Group’s implied growth
comparable
rate
companies.
assumption
to
Assessed the accuracy of historical cash
flow forecasts.
the methodology
Assessed
and
assumptions used in the calculation of
the discount rate, including comparison
of the rate to market benchmarks.
Tested the mat hematical accuracy of
the impairment model for each CGU.
• Where a fair value less costs to sell basis was
used:
•
•
•
•
the determination of
Assessed
the
selling price to actual or other market
comparable sales prices.
Assessed
estimated selling costs for each CGU.
the costs
to sell against
Assessed the carrying amount of the net
assets of the Group against its market
capitalisation at 30 June 2023.
Assessed the Group’s sensitivity analysis
and evaluated whether any reasonably
foreseeable change in assumptions could
lead to a material impairment .
• We assessed the Group’s determination of
the CGUs to which goodwill is allocated and
assessed the adequacy of the disclosure
included in the Notes to the financial report.
A member fir m of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
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MMS ANNUAL REPORT 2023 Independent Audit Report
AS AT 30 JUNE 2023
Informat ion ot her t han t he financial report and audit or’s report t hereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection wit h our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilit ies of t he direct ors for t he financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal cont rol as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s and
Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Company or Group or to cease operations, or have no realistic alternative but to do so.
Audit or’s responsibilit ies for t he audit of t he financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance wit h the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
► Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to t he audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s or the Group’s internal cont rol.
A member fir m of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
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► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s or Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company or the Group to cease to continue as a going concern.
► Evaluate the overall presentation, st ructure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit . We remain solely
responsible for our audit opinion.
We communicate wit h the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on t he audit of t he Remunerat ion Report
Opinion on t he Remunerat ion Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of McMillan Shakespeare Limited for the year ended 30 June
2023, complies wit h section 300A of the Corporations Act 2001.
A member fir m of Ernst & Young Global Limited
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Responsibilit ies
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance wit h section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Brett Kallio
Partner
Melbourne
23 August 2023
A member fir m of Ernst & Young Global Limited
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Shareholder Information
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this Annual Report is set out below:
SUBSTANTIAL SHAREHOLDINGS
As at 3 August 2023 the number of shares held by substantial shareholders and their associates is as follows:
Shareholder
Number of Ordinary Shares
Percentage of Ordinary Shares 1
HSBC Custody Nominees (Aust) Ltd
JP Morgan Nominees Australia Limited
Citicorp Nominees Limited
Chessari Holdings Pty Limited2
AP Group Pty Limited
17,717,211
9,889,906
8,878,618
6,050,941
3,976,229
25.44%
14.20%
12.75%
8.69%
5.71%
1 As at 3 August 2023, 69,643,024 fully paid ordinary shares have been issued by the Company.
2 Chessari Holdings Pty Limited is a company associated with Mr Ross Chessari, a Non-Executive Director.
NUMBER OF SHARE & OPTION HOLDERS
As at 3 August 2023 the number of shares held by substantial shareholders and their associates is as follows:
Class of Security
Fully paid ordinary shares
Number of Holders
5,924
VOTING RIGHTS
In accordance with the Constitution of the Company and the Corporations Act 2001 (Cth), every member present in person or
by proxy at a general meeting of the members of the Company has:
> on a vote taken by a show of hands, one vote; and
> on a vote taken by a poll, one vote for every fully paid ordinary share held in the Company.
A poll may be demanded at a general meeting of the members of the Company in the manner permitted by the Corporations Act 2001 (Cth).
DISTRIBUTION OF SHARE & OPTION HOLDERS
As at 3 August 2023 the number of shares held by substantial shareholders and their associates is as follows:
Distribution of Shares & Options
Number of Holders of Ordinary Shares & Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000+
3,724
1,754
265
162
19
As at 3 August 2023 there were 261 shareholders who held less than a marketable parcel of 26 fully paid ordinary shares in the Company.
BUY-BACK
The Company does not have a current on-market buy back.
On 24 October 2022 MMS completed an off-market share buy back of 10% of is ordinary shares as part of its ongoing capital management
strategy.
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Shareholder Information
TOP 20 SHAREHOLDERS
As at 3 August 2023, the details of the top 20 shareholders in the Company are as follows:
No.
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC Custody Nominees (Aust) Ltd
JP Morgan Nominees Australia Limited
Citicorp Nominees Limited
Chessari Holdings Pty Limited 1
AP Group Pty Limited
National Nominees Limited
Asia Pac Technology Pty Ltd2
UBS Nominees Pty Limited
Ann Leslie Ryan
BNP Paribas Nom Pty Limited
NewEconomy com AU Nominees Pty Limited
MOHL Invest Pty Ltd
Citicorp Nominees Pty Ltd
Warbont Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
AFICO Pty Ltd
Mod Enterprises Pty Ltd
WAL Assets Pty Ltd
Birdseye No.2 Management Pty Ltd
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd
Number of
Ordinary Shares
17,717,211
9,889,906
8,878,618
6,050,941
3,976,229
3,408,305
3,068,025
1,971,968
1,008,418
756,878
327,205
310,000
237,391
224,539
174,569
130,000
129,619
114,795
110,000
99,864
Percentage of
Ordinary Shares 1
25.44
14.20
12.75
8.69
5.71
4.89
4.41
2.83
1.45
1.09
0.47
0.45
0.34
0.32
0.25
0.19
0.19
0.16
0.16
0.14
1 Chessari Holdings Pty Limited is a company associated with Mr Ross Chessari, a Non-Executive Director.
2 Asia Pac Technology Pty Limited is a company associated with Mr John Bennetts, a Non-Executive Director.
UNQUOTED SECURITIES
As at the date of this Annual Report, there are no unquoted securities in the Company.
102
MMS ANNUAL REPORT 2023 McMillan Shakespeare Limited
ABN 74 107 233 983
ASFL No. 299054
Level 21, 360 Elizabeth Street
Melbourne Victoria 3000
www.mmsg.com.au
Corporate Directory
Registered Office
Level 21, 360 Elizabeth Street
Melbourne Victoria 3000
Tel: +61 3 9097 3000
Fax: +61 3 9097 3060
www.mmsg.com.au
Company Auditor
Ernst & Young
8 Exhibition Street
Melbourne Victoria 3000
Share Registry
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street
Abbotsford Victoria 3067
Tel: +61 3 9415 4000
103
McMillan Shakespeare Limited
ABN 74 107 233 983
ASFL No. 299054
Level 21, 360 Elizabeth Street
Melbourne Victoria 3000
www.mmsg.com.au