Page 18 - Australasian Paint & Panel magazine September-October 2022

18
News • In Focus
T
PAINT&PANEL SEPTEMBER / OCTOBER 2022
WWW.PAINTANDPANEL.COM.AU
FY22 AMA RESULTS
AMA GROUP REPORTED $21.8 MILLION IN EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION FOR THE FY22 AND CLOSED WITH $52.2 MILLION IN CASH.
tal recruitment costs associated with es- tablishment of new management team.
AMA Group has gone to all of its in- surance partners for rate increases to re- flect the many inflationary costs that have impacted the industry. The report states that there was broad recognition by insurers that there was a need to rea- lign pricing and AMA parted ways with those who didn’t want to budge.
In an interview with the Australian Financial Review group, CEO Carl Bi- zon commented that for the big two insurers the motor claims book has protected them from inflation: "Be- cause the repairers have been sand- wiched between rising costs and in- surers who jealously guarded fixed price agreements."
AMA said the value of the terminated contracts represented just under 10 per- cent of revenue (around $84 million). The group has also started negotiations with Suncorp for increased remunera- tion for the Capital S.M.A.R.T network.
Essentially the group now has too many sites and not enough technicians and is looking to close down or hiber- nate more unprofitable branches. AMA Group had 181 sites in 2020, there are now 156 sites with a further 20 or so lo- cations under review.
Auditors KMPG again warned about the business' ability to continue as a going concern (similar to FY21 report). AMA says that management has pre- pared cash flow forecasts for the next 12 months supporting the group's abil- ity to trade. The report outlined the AMA's strategy for going forward. This includes diversification and, with this in mind, it has appointed a general man- ager of direct sales.
AMA Group also said it is looking to partner with a technology provider to offer ADAS solutions for within and without the network. The group says it has sufficient liquidity to manage through continued earnings recovery.
Spanish investment company Azvalor Asset Management now owns 5% of the group according to a recent ASX an- nouncement, shares then rose to 21c.
HE GROUP REPORTED A
$148 million net loss after tax for FY2022 which in- cludes another substantial non-cash impairment of $41.4 million for Capital S.M.A.R.T and $39.3 mil- lion for other Drive (non-Capital
S.M.A.R.T) sites, as well as $24.8 million for leases, equipment and plants and costs associated with hibernating, closing down or con- solidating with other sites.
The report states that repair volumes were down 14%. This downturn in vol- ume is attributed to lockdowns in the first half of the year and lack of labour in the second half of the year as a result of staff off with COVID-19 or flu.
Comparing some headline figures of the last two years—figures in brackets are a loss.
Revenue and other income from oper- ations FY2021 $919.9 million, FY2022 $845.1 million
Normalised post-AASB 16 EBITDA FY21 $116.4 million, FY22 $21.8 million, normalised pre-AASB 16 EBITDA FY2021 $64.6 million, FY2022 ($29 million)
Net profit after tax FY21 ($99.1 mil- lion), FY22 ($148 million)
The group has reduced its net debt by 31% down to $165 million as a result of divestments and capital raising.
In terms of the group's total operat- ing cash flows these were down 154% from FY21 $52.1 million to FY22 (28,2 million).
AMA Group had 181
sites in 2020, there are now 156 sites with a
further 20 or so locations under review.”
There was also a cost of $10.8million earn-outs from existing acquisitions, this is likely to reduce as the group hasn't bought any repair businesses since it ac- quired the Capital S.M.A.R.T network.
Heavy motor earning were down nearly $2 million from FY21 - 10.8 mil- lion vs 12.6 million, however the report notes that an increase in labour rate is expected to expand margins.
Increased corporate costs were associ- ated a number of initiatives including: FY21 employee options write back; new employee share scheme in '22; incremen-