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MAF307 EQUITIES AND INVESTMENT ANALYSIS - Essay Example

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EQUITIES AND INVESTMENT ANALYSIS Table of Contents Introduction 3 Background of Share Price Crash 3 Reasons behind Dramatic Price Change 5 Conclusion and Recommendation 6 References 8 Introduction McMillan Shakespeare Limited (MMS) is an Australian company that provides vehicle leasing, fleet management services and salary packaging to major employers across New Zealand and Australia…

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MAF307 EQUITIES AND INVESTMENT ANALYSIS

The strategic analysis of the group indicates that with continued development of new initiatives and business products, the group is likely to expand its client base by entering new markets. The company’s salary packing business continues to provide an annuity stream of income that further allows cross-selling of company’s other products such as leasing services. The company has a very strong balance sheet and cash flow position that gives it opportunity to choose inorganic expansion route. The company’s revenues from core activities experienced 12.6% to $161.50 million at the end of December 2012, with net profits rising over 19.3%. The company announced the gain in gross revenue and profit for the year June 2013 but a proposal from the Labour government shook company’s future earnings capacity causing the company’s share price to plunge by over 55% in the middle of July 2013. Background of Share Price Crash McMillan Shakespeare’s Finance group share price almost halved since the government flagged changes to current laws of fringe benefit tax (FBT) that has created uncertainty in the markets. ...
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