AMA Group’s FY23 guidance was downgraded to $60–68 million, normalised post-AASB 16 EBITDA from the previous guidance of $70–90 million, reflecting ongoing margin compression adverse to expectations. This is driven by strong repair volume demand being adversely impacted by industry-wide labour constraints and related throughput challenges, elevated lateral hiring activity contributing to higher employee costs and operational disruption. AMA Group will confirm or update FY24 guidance upon the earlier of finalisation of the outcome of Capital S.M.A.R.T repricing or at FY23 results.
The Group is confident in its ability to achieve long-term success, with extensive future-focused activities undertaken in recent months, including strategies to combat labour shortages through international recruitment, an industry-leading apprenticeship program and enhanced employee satisfaction activities.
Extensive pricing activities undertaken since May 2022 have resulted in short- to medium-term disruption; however, they provide a pathway to longer-term improved pricing outcomes. There were new and/or extended contracts entered with some insurance and direct revenue partners, the Capital S.M.A.R.T pricing process for FY24 has commenced, ACM Parts has completed its east coast supply network, commenced operations out of the new Queensland warehouse and achieved record daily parallel import sales in March.
3Q23 volumes were up 5% on 2Q23 and down 8% on 3Q22, which reflects significant network optimisation over that time, combined with increasing repair severity and labour-related throughput constraints. The Group continues to experience a strong forward workbook and significant demand for collision repair.
Importantly, there was significant progress with workplace safety. The LTIFR was reduced to 2.06 on 31 March 2023 from 4.63 on 31 March 2022, further enhancing the Group’s industry reputation as a preferred workplace for technicians.
Cash generated from operating activities was $0.3 million in 3Q23, reflecting ongoing improvement in operations. The upward trend in the underlying cashflows over the three quarters from 1Q23 (excluding corporate tax refund and including the principal elements of leases) to 3Q23 contributed to the $20.5 million closing cash balance on 31 March.
On the announcement, the market responded with a 32% reduction in share price.