Eclipx Group Ltd

Reduced FY18 NPATA Guidance and Released the Market Update: Eclipx Group Ltd.’s (ASX: ECX) stock surged 10.5% on August 13, 2018 recovering from the loss of 37% witnessed in last five days. The company has cut the full year 2018 profit guidance on the back of sluggish auction activity at its online brand GraysOnline. ECX now expects net profit after tax and amortisation (NPATA) for FY 18 to be in the range of A$77 million ($56.9 million) to A$80 million. That represented growth of approximately 13 percent to 17 percent on the previous year, compared with the previous forecast of about 27 percent to 30 percent growth. GraysOnline auction activity is impacted both by a 10-year low in bank-initiated insolvencies in Australia and the current buoyant construction sector which will result in reduced auctioned equipment disposals. Further, accident management services brand Right2Drive’s result is expected to miss previous expectations due to tougher competition from new competitor offerings by some auto insurers. Moreover, GraysOnline is now projected to deliver approximately 30%-40% NPATA increase (like for like) on its pre-acquisition full year NPATA of approximately $8m. The company expects to deliver mid-single digit NPATA growth from Right2Drive and is looking for a significant opportunity in the relatively underpenetrated accident replacement vehicle market. The company’s Fleet and Commercial businesses is performing well and in line with the expectations. Additionally, ECX has completed its implementation of the “Miles” Fleet and Equipment leasing platform in New Zealand successfully, and plans to deploy this platform in Australia. Meanwhile, ECX stock has fallen 38.31% in three months as on August 10, 2018  and is trading at a P/E of 10.47x. We give a “Hold” recommendation on the stock at the current price of $ 2.100.
 

Liquefied Natural Gas Ltd

Experienced strong pricing in the LNG market across the globe in the June quarter: Liquefied Natural Gas Ltd (ASX: LNG) has recently made the corporate presentation at New York Roadshow. During the June quarter, the company revealed about experiencing strong pricing in the LNG market across the globe, which was different from recent years. The buyers are planning to lockup long term LNG supply, and the projections reflect demand growth coming from Asia and Europe, and price movements across the globe are making U.S. Gulf Coast LNG very attractive. Further, the off-takers have become more aggressive and looking for long-term volumes, with many expected to take buying decisions in the second half of the year. The company has pushed the final investment decision (FID) by the end of the year, however this could be pushed further to 2019. Moreover, the company raised gross proceeds of A$28.2 million through the Share Placement to IDG Energy Investment Group Limited, which is an investment holding company listed on the Stock Exchange of Hong Kong and affiliated with IDG Capital. The funds raised will be used as operating funds till mid-2020. Further, during the quarter, the Magnolia LNG, LLC extended the validity period of its binding engineering, procurement, and construction (EPC) contract with KSJV (a KBR – SKE&C joint venture led by KBR) through December 31, 2018 and has extended the financial close date of the legally binding offtake agreement with Meridian LNG Holdings Corporation to September 30, 2018. Additionally, at the end of June 2018, the company’s total cash position is at A$50.7 million and it remained debt free. Meanwhile, LNG stock has risen 67.01% in three months as on August 10, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 0.790.
 
Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.