A private equity firm that was in talks to buy FleetPartners earlier this month may now return to the negotiating table after the vehicle management company’s shares crashed this week on the back of a trading update.
Shares fell on Wednesday by 8 per cent and a further 1.4 per cent on Thursday after a worse-than-expected trading update and confusion around some of the wording such as the group saying it saw fiscal 2025 as a “transition year”.
Its market value is now $634m.
For the third quarter, assets under management or financed was up 5 per cent but new business writings were down 17 per cent year to date to June compared to the previous corresponding period.
Net operating income was up 5 per cent for the quarter.
The group also said arrears remained elevated but would be resolved by the delivery of its 2025 financial year results.
Net debt also remained elevated due to arrears, but would also be resolved by the 2025 financial year result delivery.
Before the disappointing update, the share price of the fleet leasing business was up 15 per cent this year, so with the fall of almost 10 per cent in the past two days, it has erased most of those gains.
Pacific Equity Partners bought rival SG Fleet last year for $1.2bn but is not thought to be a suitor, while BGH Capital is also not circling.
Most were pointing to either TPG Capital or Kohlberg Kravis Roberts, which had both looked before.
FleetPartners, which has UBS as a defence adviser, was previously named Eclipx and the $1.1bn salary packaging and novated leasing and fleet manager McMillan Shakespeare tried to buy Eclipx under previous management.
The business generated $38.9m of net profit for the six months to March 31, down 6.9 per cent on the previous corresponding period.
Earnings have also been higher in recent years on the back of the trend for customers to choose electric vehicles with governments offering rebates and stamp duty benefits, offering support for the sector.
Analysts from Morgan Stanley said in a research note that the third quarter itself was tracking in line with expectations but the result was temporarily dragged down by weaker new business writings.
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