– By Caroline Falls –
Eclipx Group, the listed fleet services group which manages more than 100,000 vehicles in Australia and New Zealand, is predicting strong growth in 2018 following double-digit growth in the year ended September 30 and new acquisitions.
The group which operates under six primary brands, FleetPartners, FleetPlus, CarLoans.com.au, FleetChoice, AutoSelect, Right2Drive and Grays Online, announced a 23 percent increase in net profit after tax to $68.3 million for the latest year.
“I am very pleased to be able to report strong growth in profits for the third successive year since listing,” said Doc Klotz, Eclipx CEO. He said recent acquisitions, including Right2Drive and GraysOnline, had contributed to the growth.
“Diversification into horizontal and vertical adjacencies and continued strong asset growth in traditional fleet businesses underpin a continuation of this momentum in FY18 (fiscal year),” said Klotz, adding that the group forecast growth of between 27 and 30 percent in net profit after tax and amortization in the year ending next September 30.
He said earnings-per-share growth was expected to be as much as 12 percent, comparable to the 13 percent just reached. Earnings per share for the year ended September 30 were 25.2 cents, compared with 22.2 cents a share a year earlier.
The group noted it’s flush with funds, including cash in the bank and undrawn debt facilities, giving it scope to expand further.
Highlights of the latest financial year included strong growth in traditional fleet businesses, including fleet leasing and novated leases through brands FleetPartners and FleetPlus. The group said it achieved above market growth in new business, including from new accounts and existing customers.
Future opportunities will come in Australia from the demand by local fleet managers for innovation in fleet management services and improvements in technology that support core capabilities of the group. They also predict an increased demand from customers to move from owning their fleet to fully funded and managed model via a Sale and Leaseback.
Newly acquired Right2Drive is a 24/7 businesses that provides vehicles for not at-fault drivers and it made some 33,000 hires over the year. GraysOnline, an online auction group specializing in vehicles and industrial equipment, contributed $1 million to the 2017 headline profit since Eclipx took effective ownership in early August. It expects a contribution of more than $14 million f or the current financial year.
Klotz also noted the group’s own treasury arrangements for cutting its cost of funds and enabling opportunities for further growth. In particular he noted the issue of asset-backed securities, or corporate bonds, including a A$330 million issue late last year and a NZ$224 million one in June.
“This allows us to tailor flexible and comprehensive financing solutions for our customers,” Klotz said in a statement accompanying the financial results released to the Australian Stock Exchange.
Talking about the outlook, Klotz said: “Our fleet business remains well positioned and, despite a competitive environment, we will continue to focus on growing our share of this important market,” and, “Our recent Right2Drive and GraysOnline acquisitions have unique and disruptive positions in high growth markets and are leveraging our core competencies. Both businesses are performing to expectation and remain excited about their potential.”
The group also said it expected a continued increase in demand from clients to move from owned fleet to fully funded and managed fleets.
It finished FY17 with 78,863 vehicles in Australia and 28,187 vehicles in New Zealand under management or finance.
