Ann: Eclipx Group Business Update, page-3

Lots of moving parts here.

New business well down is not really that big a deal in the short term as long as you reduce sales overhead accordingly. Extensions are possibly a good thing as long as priced correctly. When they do come back there should be plenty of equity in the assets. They are potentially exposed to increased maintenance risk however I would guess in the current environment with a lot of fleet grounded that overall maintenance expense would be well down. Less new business also means less onboarding so procurement overhead also needs careful management. End of lease income at 90 percent is not a bad result. Without knowing the make up of this income it is a bit hard to gauge the exact position however I would assume excess kilometre charges down, end of lease damage charges down (due to less returns) and disposal profits up.

If for example next year normalises a bit, income from disposals should be a nice kicker. I would cut staff deep. They can always be replaced when demand picks up. Oldest trick in the book. slash the overhead pretty up the bottom line then dispose. Let the new owner either gain from synergy or alternatively have to increase overhead to service the fleet.

I still maintain $2+ offer for takeover on the horizon.