The Eclipx Group Ltd (ASX: ECX) share price has plummeted 17.9% today after providing guidance that FY19 net profit after tax and before amortisation (NPATA) will be in-line with reported FY18 NPATA.
Eclipx says that this represents single-digit growth on pro-forma FY18 NPATA, which includes adjustments for changes to accounting standards.
Eclipx also gave an update on its merger with McMillan Shakespeare Limited (ASX: MMS). MMS has advised that while it intends to comply with its obligations under the Scheme Implementation Agreement, it needs time to consider next steps.
Today's performance will be giving investors flashbacks to August when the Eclipx share price fell off a cliff in response to an earnings downgrade. A one-day loss of 40% brought the share price to $1.80 from $3.04.
Eclipx's announcement this morning was met with a similarly egregious reception as investors expressed their disappointment that there won't be a bigger improvement upon last year's results, as well as possible concern with the MMS merger update.
The provider of fleet, equipment leasing and management, vehicle rentals and online auction services said that the FY19 result would be impacted by softer retail market conditions and weakness in Insolvency and Industrial auctions consistent with the broader industry.
In response to the weak result, Eclipx is already taking further cost reduction measures. Existing cost reduction programs which commenced in FY18 have reduced Full-Time Equivalents (FTEs) by 5%.
The Eclipx share price has tumbled 44% in the last 12 months.
