Page 23 - Australian Paint & Panel March-April 2020

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ONSOLIDATION IN THE COLLISION
repair sphere in Australia is still in its infancy and its continuation is inevitable. Multi-site operators (MSOs) and consolidating groups are on the rise influenced, of course, by the insurers who pre- fer to work with larger entities. Apart from the fact that groups can buy better and therefore potentially undertake repairs more cost effec- tively, dealing with thousands of independent repairers is very costly in terms of human re-
sources at the insurer HQ.
Clearly AMA has led the charge and has
somewhat of a lead over, well, everyone, in
terms of numbers of sites and turnover and market share etc. The group has been busy working on integration following the pur- chase of Capital S.M.A.R.T. AMA's general model in terms of consolidating is buying the businesses it needs and generally keeping the owner on in an earn out deal.
The new kid on the consolidation block is Strategic Collision Repair Group and they have a slightly different take by running the group as a 'collective'. Then of course there's the franchise model of Fix Auto, which has been slow to take off in Australia but has grown substantially in the last 12 months.
Car Craft is a different model again offering buying power and valuable networking and support opportunities. It has also grown with around 120 member businesses across the country. Repairhub is the new IAG owned network and looks set to grow rapidly.
There's been an increase in smaller MSOs around the country as more repairers understand that this makes them more of an attractive proposition to work providors. In Victoria we caught up with Hussain Mo- hammed from Carlission Bodyworks who runs what he calls a 'branchise’ which we will feature next issue.
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REPAIR GROUP • 28 FIX AUTO • 00 STORY NAME STRAP • 30 CAR CRAFT • 32 REPAIR HUB
WWW.PAINTANDPANEL.COM.AU
ment, one finance, one HR, one IT. That’s where the efficiencies and scalability come from. The great thing about acquisitions or mergers is that you learn so much from the other party. It’s an opportunity to pick up the best of all of the businesses.
“It is also the opportunity to stay ahead on issues such as customer privacy where the regulations are going to be changed.
“One of the many attractions for busi- nesses that want to join AMA is all th intellectual property that we have around regulations, data protection
and compliance which they would have to work that out themselves.
“Also, it’s attractive to be part of a group. We’re seeing groups pop up everywhere so there is a growing philosophy of scaling up and defragmenting in order to deal with the many challenges in the repair industry from technology to regulation.
On the gnarly question of market share – AMA says the smash repair in Australia is worth $7billion and it has $1billion, which works out at 14%. Other sources put the in- dustry value at $5billion, although whether that includes the hail repair market is unclear.
DIVERSIFICATION
Bubulj says while the integration process takes place acquisitions have slowed down a little. “We have a lot to do internally so where we do add businesses will have to be complementary and add value to the skill and capability of the organisation. We are being more selective and targeted.
“We’re also looking to diversify. So where we were just panel before, now we have truck and bus. We’re looking at some great opportunities in the rural space, there’s some exciting things in the pipeline there.
“There’s so many opportunities to look at you are constantly evaluating what is the right focus for the core of the company. We’re working closely with a couple of manufacturers as well – how do we bring those ties closer together, particularly around information sharing and methods.?
“All of that will form part of our think- ing to grow the business, which we have
We’re looking at some great opportunities in
the rural space, there’s some exciting things in the pipeline there.”
every intention of doing. Capital S.M.A.R.T will also continue to grow.
“We may look into diversifying into the hail space. We are currently setting up op- erations in Canberra to help some insurers as there is a lot of conventional repair re- quired on the hail-damaged cars.”
The scale of the company has necessi- tated different skill sets of the board and there has been a restructuring in recent months. But what about the man at the top?
“Working with someone like Andy Hop- kins is a privilege,” Bubulj says. “He’s a classic entrepreneur, very focused on the people in the organisation and is as enthu- siastic and energetic about the business as he was the day he started it.”
With a shortage of panel beaters how does AMA maintain the technician staffing levels it needs? AMA group now employs 4,500 people across the group.
“That’s a hard one,” said Bubulj. “Re- tention is a big focus for us. And there is some churn because of a number of fac- tors. The advantage we have now, par- ticularly with Capital S.M.A.R.T on board, is that we can offer something more in terms of a career path.
“Part of our core business planning for the next few years is quality and training. We’re building leadership pro- grams, we’re really focusing on leader- ship and technical capability. We also have a number of strategies to attract young people into the industry.”
There’s been a drop in AMA share price since the acquisition of Capital S.M.A.R.T, how stressful is it to be meas- ured by share price?
“It’s the reality of being an ASX listed company. We are here for the long term. The nature of this business is that set- ting up sustainable initiatives is vital to give us longevity.
“My experience of having worked for a few ASX businesses is that you have your good times and your bad times, there are many dynamics. Like all things it’s a balancing act, and we have to make sure that everything we are doing today will serve us well in the future.
“Training is going to be a huge invest- ment, all of our centre managers, pro- duction managers and estimators will be undergoing ADAS awareness training. “We’re working really closely with I- CAR to ensure we have a robust training schedule. It’s not just technical and lead- ership skills that we invest in but also learning the soft skills and customer service which is more and more impor- tant into the future.”