The Eclipx Group Ltd (ASX: ECX) share price is on course to have a stunning finish to the week.
In morning trade the embattled fleet management company's shares are up a sizeable 17% to 101.5 cents.
Why is the Eclipx share price charging higher?
Investors have been snapping up the company's shares this morning following the release of its half year results.
Although Eclipx turned in a very disappointing report card, it doesn't appear to be as bad as many were fearing.
What happened in the first half?
In the first half of FY 2019 Eclipx reported net operating income of $132 million and earnings before interest, tax, depreciation, amortisation and one-off costs of $31.3 million. This was a 15% and 46% decline, respectively, on the prior corresponding period.
On the bottom line, net profit after tax and amortisation (NPATA) came in 62% lower than the prior corresponding period at $13.8 million.
On a statutory basis, the company posted a net loss after tax of $120.3 million. This includes a non-cash impairment of $118.4 million to goodwill associated with its Consumer businesses and GraysOnline.
Management advised that the company's poor half was driven by the underperformance of non-core businesses including GraysOnline, Right2Drive and Commercial Equipment.
Eclipx's chairman, Kerry Roxburgh, said: "The Board and I are extremely disappointed in the underperformance. As a result, we have taken action, putting into place a simplification plan, including the renewal of our senior leadership team. We have prepared the way for divestments of our non-core businesses, being Grays, Right2Drive and Commercial Equipment, and to right size the Group cost base."
Simplification Plan update.
The company also provided an update on its Simplification Plan. It advised that the reinvigorated leadership team led by new CEO Julian Russell will focus on growing the core businesses organically.
It also revealed that the new operating model will "involve re-sizing the cost base to reflect simplification, disciplined capital allocation to maximise returns, a strong focus on innovation, and management accountability under a transparent organizational structure with collective input from a newly formed Executive Committee."
Investors appear to be pleased with this plan and may believe it is a step in the right direction for the company.
Other shares storming higher today include Evolution Mining Ltd (ASX: EVN) after the gold price pushed to a two-week high and Lynas Corporation Ltd (ASX: LYC) after favourable developments in Malaysia.
