The Eclipx Group Ltd (ASX: ECX) share price is pushing higher this morning following the release of its full year results.
In morning trade the fleet management company's shares up 1% to $1.71.
How did Eclipx perform in FY 2020?
Eclipx had a relatively positive year and delivered modest bottom line growth in FY 2020 despite weaker revenues.
For the 12 months ended 30 September, Eclipx recorded a 5% decline in revenue from continuing operations to $672.25 million.
However, improvements in its margins led to earnings before interest, tax, depreciation and amortisation (EBITDA) growing 4.3% year on year to $85.4 million.
Also growing in FY 2020 was its core cash net profit after tax and amortisation (NPATA), which came in 2.2% higher year on year at $47.5 million.
Management notes that against a challenging macroeconomic backdrop, the core fleet and novated business delivered a solid result. It feels this reflects the defensiveness of its underlying business.
Simplification Plan update.
The company also provided an update on its Simplification Plan, which was successfully executed one year ahead of schedule.
This has seen all six non-core divestments completed between July 2019 and August 2020.
It has also led to its $15 million cost reduction target being exceeded on an annualised basis and a 56% reduction in gross corporate debt. The latter is down from $350 million to $155 million, which is ahead of its $175 million target.
Management notes that post-simplification, Eclipx is a pure-play fleet management platform, with a clear focus on growth in its three target markets. These are the Corporate, Novate,d and SME markets.
Outlook.
While no guidance was given for the year ahead, management spoke positively on its prospects.
It commented: "The delivery of the Simplification Plan ahead of schedule places the Group in a position of strength. This position provides the Group with confidence, going into FY21, that it will successfully implement the next phase of its strategy, Strategic Pathways. As the Group progresses through FY21, it will assess the best use of excess capital for shareholders having regard to balancing macro risk and organic growth alternatives."
