Published on March 5th 2021 in

AMA Group profit propped up by JobKeeper

Last week the AMA Group released it half year results, indicating a significant improvement on the same period last year when, of course, COVID-19 was not a factor.

The investor presentation indicated that the group’s strategy would be a combination of organic growth and growth-by-acquisition, supported by several internal initiatives such as: margin expansion, operational excellence, operational accountability and people-related initiatives.

Interestingly, the company has outlined several governance initiatives bringing greater focus to an area that has come under severe scrutiny in recent months. These include: a transition in leadership style from “Entrepreneurial and Big Picture” to “Operations and Outcomes”; a focus on governance, declaring that what should be in place, will be (as it should always have been); enhanced systems, processes and controls; culture transformation from private operating style to one of public company governance (clearly long overdue) and a declaration of greater risk assessment and mitigation strategies.

Of particular interest is the performance of AMA Panel Repairs which delivered an increase in revenue and EBITDAI, largely due to the benefit of a full six months trading for acquisitions such as Capital SMART, the additional 9 sites acquired in the prior half-year and of course, circa $28 million in government wage subsidies.

The business also reported a strong performance by the Heavy Motor business, increasing its contribution from 10% to 15% of the division’s EBITDA, and that the integration of Capital SMART’s paint and consumables was substantially complete and is – apparently – well-positioned to achieve its synergy targets in H2.

The investor presentation contained indicators of several headwinds and tailwinds but did not provide an update on its full year forecast, and no dividend was declared for H1.  It is not our intention to decipher the Group’s financials, we’ll leave that to the financial press. However, the share price dropped on the announcement of the result, suggesting that investors have yet to be convinced. Clearly this is a great opportunity for the newly appointed CEO Carl Bizon to instil greater market confidence in this industry-leading organisation.

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Industry Partners