AMA Group Limited

AMA Details

AMA Group Limited (ASX: AMA) is one of the market leaders in the Australian and New Zealand autobody repair industry and the vehicle aftercare and accessories market. The company has a market capitalization of ~$423.54 million as of 25^th June 2021.

H1FY21 Performance – For the First Half Ended 31 December 2020

For the first half ended 31 December 2020, the revenue and other income from continuing operations of the company increased by 19.5% YoY to $435.1 million. Post the lockdown restrictions, the company benefited from the option to use private transport over public transport and the change to domestic driving holidays over international travel. As of 31 December 2020, the company had 182 sites, an increase of one since 30 June 2020.

Further, the company reported an operating profit of $7.1 million in H1FY21 versus an operating loss of -$1.6 million in H1FY20. The rise is primarily driven by the benefit of full six-month trading for acquisitions like Capital Smart and ACM Parts. Meanwhile, it reported a net profit of $4.6 million in H1FY21 versus a net loss of -$12.3 million in H1FY20.

Financial Snapshot (Source: Company Reports)

Recent Update

• As per the release dated 23 June 2021, Mittleman Investment Management, LLC and its associates have increased their voting power in the company from 8.21% to 9.33% on 22 June 2021. Number of fully paid ordinary shares increased from 60,925,630 to 69,326,380.
• On 26 May 2021, the company released its market update, which states that it has appointed two new, experienced, and independent Non-Executive Directors on 17 May 2021. Further, it has appointed Andrew Mair as Group Chief Commercial Officer.

Outlook

As per the market update released on 26 May 2021, the vehicle volumes are close to pre-Covid levels that are expected to continue to improve and act as a tailwind into the new financial year. Further, it continues to work closely and constructively with its major customers to limit any impact of labour disruption. Moreover, the financial performance so far is in line with the company's plan, driven by returning volume and current trading expectations.

Key Risks

The company extends to work with local regulatory authorities to minimize risk to the environment, reduce waste and ensure compliance with regulatory requirements. Further, the company is exposed to market risk (such as foreign exchange risk and interest rate risk), credit risk, and liquidity risk.

Importantly, it entered into litigation with the former Group CEO and other former senior executives to protect the interest of the company and to recover unauthorized expenses incurred by former senior executives.

Stock Information

The stock of the company ended the session at A$0.600 per share, up by 5.263% on 25^th June 2021.

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