The economic disruption of the COVID-19 pandemic has seen McMillan Shakespeare restructure its UK business and announce it will fork out $8 million to acquire the remaining stake in an Australian organisation.
McMillan Shakespeare is a single source solution provider of salary packaging, novated leasing, consumer and fleet financing, and asset management services.
While new asset financing remains subdued in Australia and New Zealand, the solution provider has decided to restructure its UK operations.
"In the UK the company has ceased originating finance on its balance sheet and the existing funding book will be run down with the residual equity repatriated," McMillan Shakespeare said.
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"The management structure in the UK will be significantly reduced to reflect the new operating model.
"The company's FY20 statutory profit after tax will be impacted by approximately £8-10 million due to the write down of intangibles and restructuring costs."
Its Australian and New Zealand businesses will continue to focus on extending and restricting customers lease arrangements, it said.
Meanwhile, the firm's disability service provider Plan Partners has not experienced any COVID-19 related disruption, it said. Instead, the support organisation continues to increase its customer base and profitability.
McMillan Shakespeare also announced on the ASX that it had reached an agreement to acquire its joint venture partner's 25% stake in Plan Partners for $8 million. Once the transaction is completed, the company will own 100% of the disability support provider.
Since the end of the year, client funds administered by Plan Partners has increased by approximately 50%.
McMillan Shakespeare also expects a $30-35 million hit to its retail financial services business, blaming the impacts of the COVID-19 pandemic, increased competition and a general reduction in the number of car sales for the decline.