Page 16 - Australasian Paint & Panel Magazine Sep-Oct 2020

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News • In Focus
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PAINT&PANEL SEPTEMBER / OCTOBER 2020 WWW.PAINTANDPANEL.COM.AU
AMA GROUP REPORTS $46.9M LOSS
AMA GROUP POSTED ITS ANNUAL REPORT ON THE ASX ON 26 AUGUST. DESPITE A SIGNIFICANT INCREASE IN REVENUE AND MILLIONS FROM JOBKEEPER THE REPAIR GIANT REPORTED SUBSTANTIAL LOSSES.
EPORTED REVENUE FROM
continuing operations has in-
creased from $606.7 million for FY19 to $889.0 million for FY20, representing a 46.5% in- crease. ‘The increase in revenue is largely due to a full twelve months trading for FY19 acquisitions and partial period trad-
ing for FY20 acquisitions’ the report says. Operating profit before interest and tax has decreased from $34 million prof- it for FY19 to a $46.9 million loss for
FY20. Net profit is down by 426% The main factors cited
achieve annual synergies of $17 million by the end of FY21 from the acquisition of Capital SMART.
Capital SMART has added $234,545m to revenue and reported a FY20 $73,556 loss. SMART has also changed its paint supplier from PPG to Glasurit.
‘Subsequent to year end, the Group ter- minated a supply agreement with a key supplier. The supply agreement con- tained termination fees upon early termi- nation. The Group reached a settlement with the supplier for $9,437,000 (to be ex-
pensed in the year end- ing 30 June 2021). The supplier has agreed to pay rebates owed to the Group of $3,216,000 as at 30 June 2020.’
On the subject of paint suppliers: ‘The Group re- ceived a further tranche of the market in- centive instalment from its paint supplier in the amount of $59.5 million (inclusive of GST). This was used to fund the acqui-
sition of Capital Smart.’
The report mentioned the renegotia-
tion of repair costs with insurers. ‘These provide sustained and improved reve- nue generation and profitability for the group from 1July 2020 (based on a nor- mal operational environment). A
The Group increased its debt facilities to $375.0 million during the period, with $340.0 drawn in cash at balance date. The drawn debt was to facilitate acquisi- tions, finalise contractual earn-outs and for general corporate purposes.
‘Within the AMA Panel division, three earn-outs performed worse than origi-
nally anticipated at the date of acquisi- tion and as a result, the group has rec- ognised an impairment charge of $2,075,000 to the profit or loss.
ACQUISITIONS
‘The Group performed an annual impair- ment test to support the carrying value of goodwill. This resulted in Capital Smart Group Holdings Pty Ltd recognising an impairment charge of $50,200,000 in their profit or loss. The impairment charge was fully allocated to goodwill.’
As well as the purchase of Capital SMART and ACM for $416,904M cash AMA also bought:
• Smashcare Group in August 2019 for
$8,516M
• BF Panels NSW for $3,962M
• All Transport Crash Repairs (Truck)
SA $3,276M
• Diplocks Collision Repair Centre QLD • Luxury Bodyshop NSW
• Graeme Hull Smash Repairs Wagga
Wagga NSW
The reports states $4,828M in its ac- quisitions report under ‘other’
This added 61 sites to the group, al- though the number of group sites that have been closed in the financial year are not included in the report. AMA also bought acquired the remaining 40% in- terest in Woods Auto Shops increas- ing its ownership from 60% to 100%.
LEFT: AMA’s Andy Hopkins.
ABOVE: Steve Bubulj head of AMA’s panel division
for this loss was the ac- quisition costs of Capital SMART and ACM Parts, dry weather affecting volume in 2019, Covid-19 impact and the adoption of the new accounting standard AASB 16 Leases
on 1 July 2019. The report states: ‘As a result of the above, the statutory results for FY20 are not directly comparable to FY19.’ There was, again, no shareholder dividend paid. ‘The Group remained cashflow posi- tive (inclusive of Government wage sub- sidy programs) during this period and the net debt position of circa $227 million at 30 June 2020 is also significantly better than anticipated at the outset of the pan- demic. AMA has reported that is it re- ceiving approximately $10m per month in JobKeeper and records $21m Govern-
ment payout in this financial year.
Total borrowings and other financial liabilities are listed as $385,404m for 2020 versus $131,263m for 2021.The re- port states that AMA is on target to