Eclipx Group will take an impairment of up to $130 million for the six months to March 31 and changed chief executives as it tries to restore confidence among investors in the wake of the collapse of the merger with McMillan Shakespeare and a severe downturn in its business operations
The amazing sharemarket adventures of Eclipx continued yesterday. After losing more than 60% of their value last week after a weak trading update, the suspension of its dividends and calling off a marriage with rival McMillan Shakespeare, the shares lost another 12% at the start of the week but reversed yesterday to end up 22.8% at 70 cents.
Shares in sales financing and fleet management firm Eclipx Group plunged more than 40% yesterday in response to a significant earnings downgrade slipped out late on Monday evening well after trading had closed for the session.
The FY19 result was complicated, as expected. Core business was in line with UBS estimates. The broker expects non-core business to be divested in FY20 and, post-restructuring, to have a neutral impact on FY20 operating earnings (EBITDA).
The company has announced the divestment of its commercial equipment finance business. As the core fleet & novated leasing has returned to a dominant position, and with just two further divestments in the pipeline (Right2Drive and consumer), Citi upgrades to Buy from Neutral.
The company will divest GraysOnline and AreYouSelling for $60m to Quadrant Private Equity. The transaction includes a distribution agreement, allowing EclipX to continue benefiting from utilisation of Grays automotive segment as a disposal channel.