The bullet points below summarise the AMA Group quarterly report published on the ASX.
- FY23 guidance maintained at $60 - $68 million normalised post-AASB 16 EBITDA, with an outcome expected near the middle of this range (subject to completion of audit).
- Strong cash generation from operating activities of $19.4 million in 4Q23, including $6.1 million received upon close out of an interest rate swap and $2.4 million spent on lease make-goods.
- The Group achieved positive operating cashflows over 2H23 and a continued upward trend in the underlying cashflows from 1Q23 (excluding corporate tax refund and interest rate swap close out and including the principal elements of leases) to 4Q23.
- $28.9 million closing cash balance at 30 June 2023, up $8.4 million from 31 March 2023.
- Labour supply, which impacts repair throughput and therefore profitability, improved marginally through 4Q23 with net team member hiring including 62 international recruits, 50 apprentices, and solid local recruitment - reducing vacancies and increasing production throughput.
- AMA Group and Suncorp continue to negotiate renewed pricing under the Motor Repair Services Agreement for Capital S.M.A.R.T. The interim pricing package announced to the ASX on 4 November 2022 will continue in the meantime.
- New pricing with most AMA Collision work providers in place and effective from 1 July 2023.
- Strong repair demand continues.
- ACM Parts continued growth in parallel parts sales and progressed its Aftermarket parts program.
- Operations opened at the new class-leading AMA Collision facility in Arundel Queensland, which will consolidate three smaller facilities into this larger, more productive operation.
- A new Wales Heavy Motor site in Kilburn South Australia is under construction and expected to commence operations in 1Q24.
As the Group looks to the future, the first AMA Collision site commenced operations at Arundel in Queensland during the quarter, with a large footprint and new branding concept. The Wales Heavy Motor site at Kilburn is nearing completion, with the team at All Transport preparing to move into the site in 1Q24.
AMA Group and Suncorp continue to negotiate renewed pricing under the Motor Repair Services Agreement for Capital S.M.A.R.T. and will update the market as appropriate. The interim pricing package announced to the ASX on 4 November 2022 will continue in the meantime.
Summary of cash position
AMA Group ended 4Q23 with a cash balance of $28.9 million and unused available finance facilities (undrawn bank guarantees) of $1.5 million. The Group generated net cash from operating activities of $19.4 million during the quarter (excludes the principal elements of leases which is in cash flows from financing activities). This result reflects increased cash receipts, driven by improved pricing and billing, a net decrease in inventory at ACM Parts and $6.1 million received upon close out of an interest rate swap.
The Group spent $3.5 million on property, plant, and equipment (PP&E) during the quarter, including $2.1 million invested into the South Australian Heavy Motor site and Arundel, Queensland collision repair centre. Make-good expenditure of approximately $2.4 million — which will deliver an annualised saving of $1.1 million in rent payments related to leases on six previously closed sites — is reflected in payments for other non-current assets.
The Group notes the continuing upward trend in the underlying cashflows (excluding corporate tax refund and interest rate swap close out and including the principal elements of leases) over the quarters from 1Q23 to 4Q23. This is reflective of the FY23 transition year, and the Group is pleased to see the impacts of pricing and operating productivity initiatives beginning to flow through.
AMA Group will release its financial results for the year ended 30 June 2023 on 31 August 2023, with a webcast to be held at 11:00am AEST (Melbourne/Sydney time) on that day.
The full quarterly report can be found by clicking here.