Diversified financial services provider, Eclipx Group Limited (ASX: ECX) has witnessed a decline of 76.35% in the past six months, however, the share price of the company climbed up 15.263% today (27 March 2019 AEST 1:59 PM).
In the past few months, the company has witnessed soft financial performance with NPATA down by 42.4% compared with the first 5 months of FY18, driven by the underperformance of Grays and Right2Drive businesses. In the market update provided on 27 March 2019, the company has confirmed that Grays and Right2Drive businesses are for sale and it has received interest from various parties regarding the Grays and Right2Drive businesses and confirms that these businesses are for sale.
The company is going to apply the sale proceeds to the repayment of Corporate Debt. The company’s Board has advised that it will not be paying an interim dividend following the release of the 31 March 2019 results. The company has also confirmed that it will test the carrying value of goodwill as part of its half-year accounts.
The company monitors its performance against corporate debt covenants monthly and formally certifies compliance against corporate debt covenants every six months in September and March. In the market update, the company has confirmed that it is compliant with its Corporate Debt covenants, both at the last formal testing date (30 September 2018) and as at 28 February 2019.
Currently, there are six financiers to the ECX Corporate Debt facility, which are having a weighted average maturity of 3.4 years, and with the earliest maturity of 30 September 2021. These funders continue to be supportive of the company. As at 28 February 2018, the company had net debt of $283.7 million which is expected to reduce in March due to business cash flows and treasury asset management activities.
The company has received approvals to exclude the up to date restructuring and merger costs from the corporate debt leverage ratio calculation.
In the market update, the company has reaffirmed that it is targeting cost reductions of $20 million over the next 18 months. A Transformation Office, with a reporting line to the Board of Directors, will implement the cost reduction program. The Transformation Office will also manage the sale of the Grays and Right2Drive businesses and it will oversee any restructuring of the Group.
In a trading update provided on 20 March 2019, the company has indicated that it might not achieve reported NPATA consistent with FY18. As a result of these issues, McMillan Shakespeare Limited has informed the company that it will not complete the proposed scheme for the merger.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. At the time of writing (27 March 2019 AEST 01:59 PM), the stock of the company is trading at a price of $0.657, up by 15.263% during the day’s trade with a market capitalization of ~$182.19 million as on 27 March 2019 (AEST 1:28 PM). The counter opened the day at $0.590 and reached the day’s high of $0.705 and touched a day’s low of $0.575 with a daily volume of more than 15,096,467. The stock has provided a year till date return of -75.95% & also posted returns of -76.35%, -75.74% and -70.69 over the past six months, three months, & one-month period respectively. It had a 52-week high price of $3.660 and touched 52 weeks low of $0.540, with an average volume of ~ 3,196,019.
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