Eclipx Group Ltd (ASX:ECX) shares slammed on profit downgrade

Shares in fleet management company Eclipx Group Ltd (ASX: ECX) are down a mammoth 43% to $1.73 at the time of writing after the release of revised FY18 NPATA guidance yesterday.

Eclipx expects to report FY18 NPATA of between $77 million and $80 million – up between 13% and 17% on FY17, but a downgrade from previous expectations of between 27% and 30% growth.

The revised guidance is related to insolvency auction volumes being at decade lows, with Eclipx seeking opportunities in the underpenetrated accident replacement vehicle market to realign its strategy.

Fleet management peer McMillan Shakespeare Limited (ASX: MMS) will deliver its annual report later this month with a market update in June revealing the company was on track to deliver UNPATA of $93.6 million for FY18 with an asset impairment of between $18 million and $24 million expected after its exit from Money Now.

Also in the space Smartgroup Corporation Ltd (ASX: SIQ) shares have travelled up nicely in the last 12 months with its half-year results due in on August 22.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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