Eclipx Group Limited (ASX: ECX) is an ASX listed company engaged in vehicle and equipment financing, management and administrative business. Eclipx Group serves customers in the geographical regions of Australia and New Zealand.
The company had lately stated a development, as per which, Renaissance Smaller Companies Pty Ltd ceased to be a substantial holder in the company on and from 26 March 2019.
Also, the company released its market update, in which it briefed about compliance with corporate debt covenants. The presentation highlighted that the company monitors its performance against corporate debt covenants mentioned in the indenture monthly and formally certifies compliance against corporate debt covenants every six months in September and March. It has also emphasised upon the fact that there are six financiers to the ECX Corporate Debt facility (CDF), which has a weighted avg. maturity of 3.4 years, along with the earliest maturity of 30th of September 2021. These funders continue to be helpful towards the company.
The company has also briefed about the sale of its non-core businesses. The company has garnered interest from many parties regarding the Grays and Right2Drive businesses, and the management confirms that these businesses are for sale. The company intends to apply the sale proceeds to the repayment of corporate debt. The Board mentioned that it will not pay any interim dividend even after the release of the 31 March 2019 results.
As regards the cost reduction programme, the company is targeting cost reductions of $20 million (approximately 10% of ECX cost base) over the next 18 months. The company has set up a Transformation Office, which has the responsibility to report directly to the Board of Directors. This office will aid to implement the cost reduction program. This Transformation Office will also oversee any restructuring of the Group, which certainly involves the disposal of Right2Drive and Grays businesses. The sources of cost reduction will include rationalisation of the company’s property footprint, simplification of head office and shared services, the integration of NZ Fleet and commercial and the consolidation of Novated platforms.
The company has been in a merger arrangement with McMillan Shakespeare (ASX: MMS) and the agreement was subject to ECX meeting the Scheme implementation Agreement (SIM). ECX recently updated the exchange about its operational performance. Post the announcement MMS has issued a statement casting doubt on the merger of MMS with ECX, and refused to extend the end date set out in the scheme document.
On the stock-performance front, the stock posted the YTD return of -68.57%. The company also has posted returns of -71.78% and -68.57% over the past six and three months, respectively. At the market close on 2nd April 2019, the company’s stock traded at a price of A$0.790, up 6.04% during the day’s trade with a market capitalisation of A$238.13 million. The stock opened the trading day at A$0.755, reached the intraday high of A$0.805 and touched an intraday low of A$0.735 with a daily volume of 11,761,692. It had a 52-weeks high price of $3.580 and a 52 weeks low price of $0.540, with an average volume of 4,184,988.