Beefed-up AMA Group on Covid-19 repair path


Heavy vehicles feature in collision repairer's consolidation strategy

Beefed-up AMA Group on Covid-19 repair path
AMA Group CEO Andy Hopkins

 

Aggressive acquisition activity has underscored the vehicle crash repairer AMA Group’s past financial year, though it hasn’t been immune to Covid-forced automotive slowdowns.

AMA reports a huge revenue jump of nearly 47 per cent to $889 million following various acquisitions, predominantly its $420 million Capital Smart buy, though this also contributed to a $70 million loss after tax, compared to a $22 million profit last year.

Its earnings before interest, taxes, depreciation and amortisation (EBITDA) also decreased by $5 million or 8.6 per cent to $53 million on the previous year.

AMA cites various factors for this.

Dry weather conditions late in the first half of FY20 reduced repair volumes and, coupled with a decrease in year-on-year vehicle sales and increases in costs of repair, resulted in a weaker than anticipated financial performance for H1 FY20.

Added to that, "restrictions imposed by the Australian and New Zealand Governments to stem the spread of Covid-19, impacted kilometres travelled, which has a direct impact on revenue generation" in the latter quarter.


How AMA Group bought Capital Smart, here


The picture is slightly different with regard to the heavy vehicle industry, as AMA lauds the strong trading performance from Wales Truck and Bus Repairs, acquired in May 2019, with profitability "forecasted to be stronger than originally anticipated at acquisition date".

It also marked further expansion in the sector with the acquisition of South Australian truck repairer All Transport Crash Repairs for $3.3 million in September 2019.

"The acquisition aligns with the Group’s strategic direction of expanding into the heavy vehicle collision repair industry," the company notes.

Along with that, and the Capital Smart purchase, which includes parts distributor ACM Parts, the report shows AMA also bought Smashcare, BF Panels, Diplocks Collision Repair Centre, Luxury BodyShop, Graeme Hull Smash Repairs and expanded its NZ footprint with Fully Equipped NZ Holdings.

Its total acquisitions activity cost more than $450 million, the vast majority of that on Capital Smart, the benefits of which it expects to manifest over coming years.

That should be aided by AMA’s first major fleet customer contract, having secured passenger and commercial vehicle fleet management firm SG Fleet’s "entire customer base of approximately 4,000 repairs annually".

"This enables the Group to diversify its offering and enter into this growing segment of the Australian vehicle market which the Company has not previously serviced."

It sees improvement in the year ahead, and notes FY21 "has started really well with July results a lot better than expected as a result of repair volumes in most states (except Victoria) at pre-Covid-19 levels or above".

 

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