August 2025 Business Turnover Data Signal Positive Momentum for Professional Services Sector

This report is an updated version of the report published on 16 October 2025 at 2:12 PM AEDT

Company Overview

Company Overview: McMillan Shakespeare Limited (ASX: MMS) is an Australia-based company, which is engaged in the provision of salary packaging, novated leasing, disability plan management and support co-ordination, asset management and related financial products and services. Its segments include Group Remuneration Services, Asset Management Services and Plan and Support Services. Smartgroup Corporation Ltd (ASX: SIQ) is an Australia-based company, which is engaged in providing outsourced administration, fleet management, and software, distribution, and group services. The Company operates through three segments: Outsourced administration (OA), Vehicle services (VS), and Software, distribution, and group services (SDGS). Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights & Analysis, Financial Metrics, Financial Commentary, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.

Investment Summary

Sector Overview and Supporting Drivers

Australia’s Professional Services sector plays a vital role in supporting the nation’s economic activity through consulting, legal, accounting, engineering, and IT services. The sector benefits from rising demand across infrastructure development, digital transformation, and sustainability initiatives. Growth is driven by rising corporate investment, public sector reform, and the shift toward technology-enabled and data-driven advisory solutions. Professional services firms also play a key role in helping businesses navigate regulatory compliance, ESG reporting, and strategic transformation. With ongoing infrastructure spending and the expanding digital economy, the sector is well-positioned for steady long-term growth despite challenges around skills and wage pressures.

Sector Catalysts

Index Performance

Investment theme and stocks under discussion (MMS, SIQ)

After understanding the sectors, let us now look at two companies from the Professional Services sector listed on the ASX. The price potential of the companies under discussion have been analysed based on Price/Cash Flow Per Share based relative valuation methods.

 1. ASX: MMS (McMillan Shakespeare Limited)

(Recommendation: ‘Speculative Buy’ at AUD 17.24; Potential Upside: Low Double-Digit; MCap: AUD 1.20bn)

MMS is an Australia-based company, which is engaged in the provision of salary packaging, novated leasing, disability plan management and support co-ordination, asset management and related financial products and services. Its segments include Group Remuneration Services, Asset Management Services and Plan and Support Services.

The stock has increased by ~18.23% in last six months, and over the past 12 months, it has risen by ~9.21%. The stock has a 52-week low and 52-week high of AUD 13.01 and AUD 20.10, respectively and is currently trading slightly above its 52-week high-low average.  

 2. ASX: SIQ (Smartgroup Corporation Ltd)

(Recommendation: ‘Speculative Buy’ at AUD 7.985; Potential Upside: Low Double-Digit; MCap: AUD 1.07bn)

SIQ is an Australia-based company, which is engaged in providing outsourced administration, fleet management, and software, distribution, and group services. The Company operates through three segments: Outsourced administration (OA), Vehicle services (VS), and Software, distribution, and group services (SDGS).

The stock has witnessed a decline of ~2.24% in last one month, and over the past six months, the stock is up by 7.18%. The stock has a 52-week low and 52-week high of AUD 6.820 and AUD 9.200, respectively and is currently trading near the mid-point of its 52-week high and low. SIQ was last covered in a report dated ‘31 July 2025’.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 16 October 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.