McMillan Shakespeare Limited (ASX:MMS) is bracing for the impact of proposed changes to the fringe benefits tax on motor vehicles, claiming they will result in an adverse impact to the business overall.
The finance company suspended its shares last week following the Rudd government’s decision to adjust the policy in order to save about $1.6 billion over four years.
McMillan says the proposed changes are creating disruption within the industry and are expected to lead to an unknown and unquantifiable decrease in demand for novated leases.
As a result the company expects to increase its annual net profit by 15 per cent to between $61 million and $63 million but has cast doubt over its final dividend payment.
McMillan says it will provide updates as it becomes aware of developments but is likely to suspend most communication in light of the present uncertainty until after the Federal election is held.
Shares in McMillan Shakespeare last traded at $15.39 before being placed into a trading halt.
McMillan Shakespeare reported a net profit of $29.7 million in the first half of the 2013 financial year.
