- Car leasing company Eclipx (ECX) made a $13.2 million half-yearly profit this year
- This is a significant increase on the $120 million loss over the same time last year
- The company attributed the profit to its business simplification plan announce at the end of May last year
- Since then, Eclipx has sold five none-core businesses, with one more waiting to be sold
- Moreover, the company said it had available liquidity of $106 million at the end of March — putting Eclipx in a comfortable position to wait out the COVID-19 crisis
- Shares in Eclipx are trading three per cent higher today, currently worth 86 cents each
Car leasing and fleet management specialist Eclipx (ECX) made a $13.2 million half-yearly profit this year.
The company released its financial report for the six months from October 1, 2019, to March 31, 2020, today.
The $13.2 million profit is a hefty 111 per cent increase on the same period the year before. From October 2018 to March 2019, Eclipx lost $120 million.
Moreover, from April 1, 2019, to September 30, 2019, Eclipx lost $221 million — making today’s half-yearly profit a significant increase on the last half-year.
Keep it simple
Part of the half-yearly success comes from the company’s 12-month simplification plan which began on May 31 last year.
The company had six none-core businesses that it planned to dump. So far, the company has sold off five of the six.
The company has shed GraysOnline, AreYouSelling, Commercial Equipment Finance Australia, Carloans.com.au, and Georgia — with the sale of the latter two completed just last month.
All that remains is for Eclipx to divest from Right2Drive, its final none-core business.
However, the company told shareholders today some major restructuring of Right2Drive has had a positive effect on the business, with the branch contributing $5.6 million to the company’s net cash over the half-year compared to the $5.8 million drag over the same period the year before.
Still, Eclipx said it plans to sever ties with Right2Drive despite the increased performance.
Looking ahead
Given the year-long simplification process, Eclipx has already been taking on a range of cost-saving initiatives.
As such, when COVID-19 struck and ravaged global economies, saving money was already on the company’s agenda.
Still, in line with many businesses across the country, the virus kicked cost-saving into overdrive for Eclipx, with the company extending leases, slashing management end Executive salaries, and pausing all non-essential spending.
Moreover, the company amended some of its debt covenants.
This means at the end of March 2020, Eclipx has $81 million in cash on hand with $25 million available in debt facilities — bringing its liquidity position to $106 million.
Eclipx said it feels comfortable with its available liquidity and the underlying fundamentals of the business to weather the COVID-19 storm.
Investors seemed encouraged by the half-yearly report, with Eclipx shares outperforming the wider market and trading 3.01 per cent higher today. At lunchtime AEST, shares in Eclipx are worth 86 cents each.