Why is Eclipx (ECX) rallying
Stock
Eclipx (ECX) $1.40 as at 03/06/2019
Event
Leasing business Eclipx is set to top the boards for the second session running, currently trading 30% higher today, and nearly 70% above the close on Thursday of last week.
The company which provides fleet management and asset finance announced their first half results on Friday morning which has sent investors into a frenzy despite posting an EBITDA loss of nearly $10m.
The stock was sent tumbling in March when the company announced it did not expect to meet guidance for the year resulting in a failed merger with McMillan Shakespeare. The first half result was all about presenting a more simplistic view to the market after it had lost the faith of investors.
Eclipx has put a number of its non-core businesses up for sale, or simply dissolve them, as it looks to pay down debt and streamline the business. This includes online marketplace GraysOnline, car loan business Right2Drive and its commercial equipment leasing company, all three of which contributed negatively to EBITDA in the half.
The market clearly liked the approach and rewarded the stock with the underlying business performing reasonably well. Eclipx expect the asset review and any subsequent sales to be completed within 4 months.
Eclipx (ECX) Chart
Market Matters Take/Outlook
