Eclipx Group Limited (ASX: ECX) is one of the leading companies in the space of fleet management, diversified financial services, and vehicle fleet leasing in New Zealand and Australia.
To benefit both investors and customers, Eclipx group focuses on delivering excellent customer experiences via its first-to-market innovative, and value-added end-to-end technology. Its highly tuned and diversified funding model (both low risk and cost-effective) help customers to meet their funding requirements in a very convenient way.
Eclipx’s shares fell by more than 50% on March 20, 2019, following the announcement that it will not be possible for McMillan Shakespeare to complete the proposed scheme, as despite every effort made it is unable to understand the issues being faced by Eclipx.
As per Eclipx’s announcement about its trading performance, it stated that its financial performance has softened since the update provided by it on January 29, 2019. The primary reasons include Grays Industrial and Insolvency has continued to underperform and has outweighed the continuing growth in motor vehicle auctions. The company’s Right2Drive’s results for the last 2 months have been impacted by factors such as softer trading conditions than anticipated at the time of its January 29 guidance, and a re-assessment of recovery rates on some debtor groups including its non-insurer based (individual) exposures. It has resulted in the need for a higher level of provisioning, and the impact of process errors identified following queries arising from due diligence.
Other reasons include reduction in end-of-lease earnings and lower new business writings in Fleet, as customers extend lease terms. The Consumer (excluding Novated) has been impacted by lower than expected new car sales and trade-ins arising from market softness, and increased Fleet receivable provisioning of $0.4m taken in February, under the new AASB 9 standard, although the company is confident that this amount will be recovered.
The company’s board later stated that they no longer expect to achieve reported NPATA consistent with FY18 (as advised on January 29, 2019). In this uncertain environment, they will not be providing full-year guidance for the Group at this time. In the current circumstances, they are going to consider interim dividend at the appropriate time.
In its outlook, the company expects many of its initiatives either underway or completed will improve its H2 FY2019 performance. The initiatives include removal of $2.3 Mn of FY19 YTD pre-tax losses by restructuring our non-Novated Consumer businesses. The changes in Grays, during late February was expected to generate a net cost reduction of $2.6 Mn in H2 FY19. The integration of our NZ Fleet and SME businesses was to deliver cost reductions and sales efficiencies, etc.
On stock information, Eclipx Group’s shares last traded at A$0.745 up by 2.055% (as on March 22, 2019) with the market capitalization of ~$233.33 Mn. Its current PE multiple is at 3.69x, and its last EPS was noted at 0.198 AUD. Its annual dividend yield has been noted at 21.92%. Today, it made a day’s high of A$0.82 and day’s low of A$0.735. Its 52- weeks high was at A$3.775 and 52- weeks low at A$0.725 with an average volume of 2,147,349. Its absolute return stands for 1 year, 6 months, and 3 months are -80.27%, -69.83%, and -67.7% respectively.
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