Eclipx Group Limited (ASX: ECX)

Continues to outperform - Eclipx is a leading provider of fleet, equipment leasing and management, vehicle rentals and on-line auction services to corporate, SME and consumers in Australia and corporate and SME customers in New Zealand. The Group generates revenue in different ways across its brands and segments which are broadly split intoEclipx-funded model, Third-party-funded model, management and maintenance fees, vehicle rental and auction proceeds. The Group believes that Net Operating Income is a key measure of financial and operating performance for its businesses as it considers the direct costs that is incurred in generating gross revenue. As on 31 March 2018, the Group managed or financed in excess of 112,000 vehicles across Australia and New Zealand. Meanwhile, one of the Directors, Russell Shields acquired 50,000 fully paid ordinary shares at an issue price of $2.645 per share.

The Group acquired Car Buyers Australia Pty Ltd trading as areyouselling.com.au (Car Buyers) and it was acquired to provide an additional disposal channel for its customers. Net Operating income before operating expenses after impairment amounted to $44.3 million favourable to the prior period. This was driven by the contribution from the Grays and Car Buyers acquisition, growth in Right2Drive and by the increase in the volume of new business writings in Australia Commercial and New Zealand Commercial. The Group experienced a growth of 12 per cent in 1HFY18 Fleet new business writings from high credit quality corporates and governments as compared to 1HFY17.


Assets Growth and interest margins (Source: Company Reports)

The net profit after tax and amortisation for the half-year 2018 was up 23% while the Group recorded an increase in Cash NPATA by $7.3 million or by 23.4 per cent. The Group looks to optimise the funding facilities that it has in place and remains committed to funding the facilities to cater for its forecasted business growth. As on 31 March 2018, the Group has undrawn debt facilities of $288.0 million. The Board declared a fully franked interim dividend of 8.00 cents per ordinary share for the half-year ending on 31 March 2018 and which will be paid on 2 July 2018 with an ex-dividend date of 1 June 2018. ECX will leverage its scale, technology and independence to deliver superior value to consumers through its car buying capability offering a full suite of products including used car trade-ins, consumer finance, novated solutions and insurance.

The Group expects its NPATA growth to be in the range of 27-30 per cent and Cash EPS Growth to be in the range of 10-12 per cent as compared to FY17. The stock declined by 4.18 per cent in last one year but witnessed a recovery of 6.5 per cent in last one month. The stock slipped by 3.48 per cent as it traded ex-dividend on 1 June 2018. We maintain a “Buy” recommendation at the current market price of $3.32 by looking at the overall positive and sustainable performance of the Company.
 
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.