Vehicle leasing firm Eclipx Group has produced a first-half profit of $13.2 million, a big improvement from the impairment-driven $120.3 million loss in 2019 that forced the company into a ‘corporate cleansing diet’.
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.
Eclipx Group is an established leader in vehicle fleet leasing, fleet management, and diversified financial services in Australia and New Zealand. Share Cafe Managing Director Tim McGowen recently spoke with the company’s CEO Julian Russell.
Strong earnings growth in the core business was delivered in the second half, with Credit Suisse noting a combination of a lower interest burden through debt reduction and increased end-of-lease income.
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).