Samir Vojdani
Long/short equity, value, deep value, contrarian

McMillan Shakespeare: Forgotten And Undervalued

(Editor's Note: Shares of McMillan Shakespeare trade with limited liquidity as MCSLF in the U.S. Investors with access to Australian markets can trade the MMS.ASX ticker, which has better liquidity.)

Introduction and Background

Australia's largest salary packaging company, McMillan Shakespeare Limited (MMS.ASX), saw its share price plummet 50% upon announced changes to the Fringe Benefits Tax (FBT).

The FBT is levied against employers who supply employees with non-cash benefits. These 'fringe' benefits can include:

  • vehicle leases,
  • equipment loans,
  • private health insurance,
  • housing benefits and more.

As Australia's dominant salary packaging company, MMS provides employees with:

  • novated leasing,
  • asset and fleet management, and
  • insurance

- All of which rely heavily upon the performance of the company's vehicle services.

The 'statutory' method

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