• This week, i joined the 'Equity mates' podcast to discuss the current state of the market LISTEN NOW

Reporting season avalanche turns up another gem

Reporting season avalanche turns up another gem

Since reporting season rolled into full swing, we have covered 130 individual annual reports of companies we like to varying degrees.
Twenty-four of those have made the grade for further research and modelling. Some of them we have purchased in the past few weeks and some we have already been holding for a while. This update concerns one of Montgomery’s holdings McMillan Shakespeare (ASX MMS).  

Management just reported (after the market close) NPAT of $54.3m – up 25% from last year and diluted earnings per share (EPS) growth of 21%.  This is significantly ahead of market expectations for the full year and management’s focus on Salary Packing and Fleet Management Services continues to pay off.

While some might be concerned that the company’s operating cash flow was lower this year than last, we note the significant investment the business has made purchasing new leasable assets. Rather than distributing that cash flow to us as dividends, we are more than happy to continue backing management in the deployment of those funds given the returns on incremental capital being generated by the business. This investment, we believe, will continue to drive business growth into FY13.

Roger Montgomery




Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

Why every investor should read Roger’s book VALUE.ABLE


find out more



  1. and today DCG appears to show it too can perform as before, and looks to the future in resource services wiith an optomistic outlook (ROE dropped below 20% though?). Notwithstanding a current slow down in resources demand, the scale of Australia;s resource industry and the work available there for the v best of our mining service companies (mnd, lyl, fge etc) it could be argued will give good returns for such companies into the foreseeable future. I live and work in China (have done for a decade) and I see no slowing of this country’s enormous energy and oace of development, Moreover I also have friends working here (in China) on resource-construction/ engineering projects linked to Australia and they say work shows no signs of slowing. What are other’s opinions on the mining services area, and what appear to me to be un oversold group having some outstanding companies in terms of established performance and quality with good MOS?

  2. Yeah Roger, quite like this company. Bought in at $3.58 couple of years ago when the stock was depressed due to the rumours with proposed changes to FBT.

    What are your views on MND’s results. Profits up 44% and management is confident of revenue growth in FY13 and beyond. From my experience with MND’s management, they usually under promise and over deliver. So they are suggesting things are going to be OK for MND going forward. Is MND an exception to mining services or do you think management have got it wrong?

Post your comments