You took up the baton to lead Eclipx less than a year ago, coming from a long career in investment banking. I’m not sure if you see it as a shift into the automotive industry, or a straddling of financial and automotive? How do you see your transition
I see it as a straddling. We have a balance sheet of $1.5 billion and we do provide leasing products to our customers. Obviously, it’s in the automotive space. Our underlying product is financial services
What is exciting you about being in the automotive sector in 2020?
You just need to open a newspaper on any given day and there’s mergers of automotive providers and manufacturers. It’s an interesting time. There’s a huge shift in technology and renewables. Battery vehicles are not too far away —you can see them in the streets today, but they will become more affordable, they will become prominent. It’s a huge change. Obviously, telematics is here and here to stay. There’s a huge shift in data provision as a function of telematics and we think that’s a really interesting space that we’re in.
What can you tell us about your customers’ interest in or demand for things like EVs, and fleet management systems?
Many of our customers have signed up, or have suppliers that have signed up, to the Paris accord, so EVs are coming and they’re coming very, very quickly. Fleet management is a critical component for our customers, it’s a huge burden. We can do that much more efficiently for them, as well as taking residual value risk which most corporates can’t do as efficiently as we can.
I note that your company has said growth in novated leasing was one of the highlights in 2019. What is your outlook for growth in novated leasing in 2020?
We’re a listed company, so I don’t want to be giving forward looking statements. We have been a novated player, but a sub-scale novated player, for a very long time. Some of our competitors have done a great job and they have become very large in the novated space. We are coming from a low base. We have a great product; a great service proposition. In terms of novated as part of our business, we have been really focussed on growing that. We have got a really good team — we think the best in the industry. We have invested very heavily in it. We are seeing some pretty good growth.
I see that you launched another corporate bond issue of some $450 million in mid December. Do you have any more bond issues scheduled and how do they benefit your financials?
It’s a really interesting market. We are the only issuer of corporate bonds in the fleet space in this region. We’ve just done one in NZ (in September 2019), and just completed our most recent one in December in Australia. Those markets are very good for us at the moment. What that allows us to do is fund more efficiently, and in most circumstances pass that saving onto our customers.
What are some of the other big things you’ll be working on at Eclipx over the coming year?
. We are certainly testing the market in SME fleet. It’s underbanked. There’s not many providers in the space, particularly for operating leases. We do want to get a bit more involved around providing operating leases to small and medium sized business because they represent the backbone of the Australian economy, and we’d like to be an active provider in that space.
Can you tell us more about what you are proposing?
From our perspective, we see operating leases as a very simple payment product where a corporate customer can come in and take 20 Ford Rangers and we put them on a payment plan, where their fuel, insurance, tyres, maintenance and the car itself are just one simple payment every month. That’s very useful for an SME — they don’t have to worry about cash-flow management, and so we think regardless of being on or off-balance sheet for an SME, it gives them a better option to finance a product than a share in a mortgage, or their own mortgages, and it protects them as well. It gives them a good asset-backed facility and we think it’s a good product for them.
Can you tell us a bit about your dream car?
My dream car is a project. I have a shell of a 68 Pony Mustang. I have some friends who built a Pony by travelling around America and going to scrapyards and ever since I heard that story I’ve wanted to do it myself. I’m pretty busy as I’ve got four kids. When I do get time I will go and build it. I’m fascinated by it. That’s my dream car.