News: ECX Eclipx Group Says Will Not Be Providing Earnings Guidance For FY20, page-19

timbo80s ECX don’t have much in the way of govi vehicles anyway.

i don’t know for sure however my guess is they would be drowning in downsizing as most customers would be defleeting as fast as they can. No point in having vehicles sitting around. A lot of sales forces currently grounded as well.

Lets face it vehicles will be easy to replace down the track as manufacturers will enthusiastically look to do deals and shift metal.

The more I think about it it is a shit storm. How long does it take to clear inventory and at what price?
The next dilemma, what is new business demand likely to be? I would suggest subdued. As for novated, a lot of punters are going to be upside down on their positions or unemployed so that will take a while to work through as well.

That’s why they can’t give guidance, as there is no way of accurately predicting the outcome. They just have to deal with the now. The current situation also effects pricing models going forward. Do you assume future positions as pre crisis or adjust downward because of current circumstance?

The fleet business lives or dies on your ability to successfully crystallise your positions. Always has and always will. Operating income is worth jack shit if you are left holding the bag on mass asset losses. That is why management changes in these organisations so often. Not many can manage the balance between sales and disposal. It’s too easy to compromise on price and then worry about the end result later however that’s a story for another day. Uncertainty of earnings is why all the banks got out all those years ago. Too hard to put hand on heart and predict a consistent outcome.

Going forwards what is the funding appetite like for potentially distressed assets. I would assume funding cost will rise to compensate for increased risk. This all has a long way to play out . I would be interested to understand those that think this is a bargain on what basis.

I cant value it because of the above but I am only one point of view. The competitors are all in the same boat although a bigger novated presence shifts liability to the punter so a MMS or Smartgroup are better protected.