AMA Group Limited has released its quarterly cash flow and activities report. Highlights note that business continues to be impacted by the pandemic although repair volumes continue to increase.
The Group had hoped the six months ending 30 June 2022 would bring a more normal set of operating conditions. However, the impacts of COVID-19 on the Australian and New Zealand economies continued to challenge all labour dependent businesses, including AMA in 3Q22.
Throughout the quarter, the Group was significantly impacted by COVID-19 related isolation for team members who tested positive for COVID-19 and/or those deemed close contacts. With approximately 100 full time equivalent absences per day on average across the three-month period, the Group estimates that the subsequent reduced volume resulted in a negative revenue impact of approximately $10 – 15 million across 3Q22.
January repair volumes remained significantly COVID-19 affected, with repair volume recovery slower than anticipated. However, AMA Group repair volumes have continued to increase across the quarter. Improved net cash from operating activities from January to March is reflective of the ongoing improvement in trading conditions and increase in repair volumes, with positive operating cash flows in both February and March 2022.
3Q22 volumes were up approximately 13% on 2Q22, and trending upwards month on month. However, 3Q22 volumes remain significantly down (27%) on the comparable calendar year 2019 period.
In January, ACM Parts leased a, nearly, 20,000 square metre facility in Somerton, Victoria. This will see consolidation of the two existing Victorian sites around mid-year 2022 and will facilitate an expansion of ACM Parts’ national distribution network capacity.
The Group launched its inaugural offer of the Group’s general employee share plan in March. This initiative is part of the Group’s commitment to addressing the nationwide skills shortage. A total of 9.22 million new shares issued to eligible employees, acknowledging and rewarding the contribution each team member makes to AMA Group.
The AMA Group total available funding of $63.6 million provides an estimated four quarters of funding available at the March period end. Using total cash outflows and excluding the unused bank guarantees from available funding, there are less than three quarters of funding available. The estimates above are based on the continuation of challenging conditions experienced in 3Q22.
Positive cash flows in February and March 2022 reflect the ongoing improvement in operating conditions and the Group says expects this trend to continue as conditions normalise. Its share price dipped after the announcement from 29c to 27c.