Eclipx (ECX) share price rallies
Stock
Eclipx (ECX) $0.66 as at 27/03/2019
Event
The best performer on the index today is the stock that’s performed the worst over the past week. Eclipx had fallen nearly 70% in the 5 sessions to yesterday’s record low close, but has staged a recovery today in the face of the weakness after the company assured the market it remains within its debt covenants whilst also looking to offload some non-core businesses. The stock is currently trading more than 15% higher.
Eclipx owns fleet management and vehicle leasing business Fleetpartners that also owns online classifieds Gray’s online. Last week it told the market that profit had slipped 42% for the first 5 months of the financial year, walking away from guidance and blaming a decline in fleet upgrades as corporates run vehicles longer. The announcement was coupled with McMillan Shakespeare (MMS) pulling merger plans which had been in the works since late last year.
The bad news sent the stock down over 50% on the day, and it continued to slide over the next few sessions as investors grew concerned Eclipx would breach debt covenants.
Eclipx got on the front foot today to show the market it remained well within covenants whilst also announcing that it has received offers for its non-core businesses Grays and Right2Drive. These business are now officially on the market with the company planning to use the proceeds to pay down debt.
Eclipx (ECX) Chart
Market Matters Take/Outlook
