All Hail As McMillan Shakespeare Delivers

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February 20, 2013 4:09 AM EST

-Brokers raise earnings estimates
-New JV in the UK
-Solid leasing outlook

-More organic growth to come


By Eva Brocklehurst

McMillan Shakespeare ((MMS)), which provides workplace benefits administration services, has pleased brokers with its strong first half. In conjunction with the results, the company announced plans to enter the UK market in a joint venture with Visper, a UK-based asset finance company. Visper has had dealings with GMAC, the former owner of MMS' Interleasing business.

MMS has committed 1.5m pounds over five years to the JV, called Maxxia UK, and will appoint the managing director of the business. Citi is a bit surprised at this decision given there is organic growth opportunities domestically and it will take 2-3 years to scale up this business. What gives the broker comfort is that it requires little capital outlay and labour commitment. Credit Suisse thinks the JV is low risk and offers upside. Goldman Sachs suspects it may be a beachhead to further acquisitions in the UK. The JV will focus exclusively on distribution/brokerage of salary packaging and leasing products.

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