Profit from used cars (EOL – End of Lease income) continued to support the earning of the Eclipx Group. They achieved $8,300 per vehicle in FY22 along with an increase if the number of cars being returned. This strong result combined with increased maintenance margin, and higher management fee revenue, delivered Net Profit After Tax excluding Amortisation of $110.8 million, a 29% increase compared to prior comparative period, FY21.
While EOL has remained high, Eclipx has predicted the peak of strong used car prices which reflects the Weekly Used Car Index produced by Datium Insights. If new car supply increases, and used car prices continue to decline, profits form EOL will normalise.
It wasn’t all good news with the Novated new business down 9% while the order pipeline for new novated lease cars is looking like a term deposit account sitting at 3.8 times pre-COVID levels.
The corporate business in Australia and New Zealand remained strong with growth from Sales and Leaseback opportunities and to a lesser extent growth in Small Fleets.
The improvements have come after the current CEO, Julian Russell, implemented the Simplification Plan in 2019. It was designed to return to core fleet business via non-core business divestment, a reduction in operating costs and a revised capital structure.
With the job done, Russell is departing as CEO and handing the reigns over the Damian Berrell, currently CFO, who will continue the work with the new strategic plan called Accelerate which will remove duplication through consolidation of brands, systems and processes to accelerate profitability.
Vehicle supply and delivery delays are still a handbrake to growth though the Eclipx Group holds an order pipeline of 2.7 time pre-COVID levels. Eclipx expects a return to growth when vehicle supply normalises and remain confident after retaining their largest client.
