Page 16 - Australasian paint & Panel Sep-Oct 2021

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News • In Focus
PAINT&PANEL SEPTEMBER / OCTOBER 2021
WWW.PAINTANDPANEL.COM.AU
‘During the financial year, the Group has incurred $737,000 in professional fees relating to investigating the whistleblower disclosures and subse- quent legal proceedings.’
‘At the date of this report, the legal proceedings in the Federal Court of Aus- tralia remain on foot and the Group is seeking to recover funds of approxi- mately $3,000,000 relating to unauthor- ised expenses incurred by or on behalf of Andrew Hopkins as CEO of the Com- pany (circa $1,600,000) and the repay- ment of the outstanding loan which is in default and currently due and payable (circa $1,400,000).’
AMA’s own auditors KPMG LLP could not be
sure that the company would be able to continue as a going concern”
The report states that the Group’s li- quidity is strong with a net debt posi- tion as at 30 June 2021 of $173,297m and a further $57,720m in undrawn debt facilities. However, according to an article on the Simply Wall St web- site, AMA’s own auditors KPMG LLP could not be sure that the company would be able to continue as a going concern in the next year. The detailed
article says: “At the end of the day, AMA Group would probably need a ma- jor re-capitalisation if its creditors were to demand repayment.”
WHAT CAUSED
THE HEAVIER LOSS?
As can be expected, AMA points to the COVID-19 pandemic, which brought about some challenging con- ditions for the business.
With Victoria in lockdown for most of the first quarter of the year and snap lockdowns popping up around the country in the months thereafter, AMA said it has had to temporarily stand down some staff members and ‘hiber- nate’ some of the most impacted sites. The report states that the network has almost 180 sites (down from 200 pre- pandemic), although does not detail how many of these are closed, hiber- nating or open. From January to June volumes were high in the industry, however the lockdowns have inevitably impacted the whole collision repair in- dustry in affected states.
Staff numbers are reported to be 3,700, down from a previously reported high of over 4000 plus. AMA says that the sale of the ACAD business will account for some of the reduced head count.
Stock market reaction was less than positive to the results, with AMA’s share price dropping even further to just 42c at the time of publication.
Gemini Chatswood is one of many closed branches. SMART written down by $90.6m
HOPKINS COUNTERS AMA’S LEGAL CLAIMS
The ongoing saga of the legal proceedings initiated by AMA against former CEO Andy Hopkins has a new development, as Hopkins has lodged a counter-claim in the Federal Court of Australia.
The companies have opted for mediation. AMA announced in May this year that is was pursuing Hopkins: ‘for the recovery of amounts in excess of $2.4 million relating to (i) unauthorised expenses incurred by or on behalf of Mr Hopkins as CEO of the Company (c$1 million) and (ii) the repayment of an outstanding loan which is now due and payable (c$1.4 million). The most recent figure mentioned in the FY21 report is nearer $3 million that AMA is hoping to recover, and the company has spent $737,000 in professional fees so far in order to do so.
The claims by the defending Hopkins can be broken up into three areas: unpaid remuneration allegedly agreed to; a loan from AMA to Hopkins’ company Cedarfield; and monies in regard to the constructive dismissal claim conducted at the initial removal of Hopkins from AMA. Hopkins is claiming loss of income from constructive dismissal to the tune of $3.8 million. There is also discussion over a consultancy non-compete cause, which Hopkins’ lawyers argue is not valid under the current circumstances.
The difference between what AMA is suing Hopkins for and his counterclaims are approximately half a million dollars in Hopkins’ favour.