Smartgroup a strong performer
Smartgroup (SIQ) provides salary packaging and novated leasing services to employees of government departments, charities and Australian companies. Ophir is attracted to SIQ because of its strong track record of organic growth and the stickiness of its contracts. The salary packaging industry has traditionally grown by organisations outsourcing their salary packaging to 3rd party providers: the two largest in Australia being McMillan Shakespeare (ASX: MMS) and SIQ. SIQ has further grown by encouraging greater participation of employees covered by the contracts they have won to salary package. Ophir believes SIQ can maintain 20% EPS growth per annum over the next three years by increasing sales of ancillary products for novated cars and strategic bolt on acquisitions as well as traditional organic growth