In This Article:
Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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AMA Group Ltd (AMGRF) reported a 17% increase in normalized pre-AASB 16 earnings to $25.7 million compared to the prior period.
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Operating cash flow improved significantly by $15.5 million, reaching $10.5 million.
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Capital Smart performed ahead of expectations with a 18.6% increase in normalized pre-AASB 16 earnings.
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Wales's heavy vehicle segment saw a 63% increase in normalized pre-AASB 16 earnings to $5.4 million.
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The company successfully reduced its net debt from $143.9 million to $25.6 million, aided by a $125 million equity raise.
Negative Points
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AMA collision reported a disappointing normalized pre-AASB 16 loss of $2 million, falling behind the company's plan.
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Some prestige sites underperformed expectations, although there was improvement later in the first half.
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The business faced challenges with lower volumes in November and December due to higher excess levels and lower vehicle use.
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The international program is experiencing visa processing delays, impacting the recruitment of skilled trades.
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The sale process for ACM parts is ongoing, with no resolution yet, which may affect the company's focus on its core collision repair business.
Q & A Highlights
Q: What is the net debt position of the group post the convertible note redemption? A: The net debt position disclosed at the half was $25.6 million, and it will remain at $25.6 million after paying out the convertibles. This calculation took into account both the $50 million held in a cash deposit and the $50 million in convertible notes. (Answered by CFO)
Q: Do you expect the ACM parts to be sold during the second half of FY25? A: The sale process is ongoing, and we are exploring other options to maximize shareholder value as we exit this business. We expect to have a resolution in the second half of FY25. (Answered by CEO)
Q: Can you provide an update on the new debt facilities? A: The group has secured binding credit-approved commitments with two major Australian banks for a new $110 million debt facility with a 3-year term. This includes $80 million in revolving debt facilities and $30 million in bank guarantee lines. The new facilities will pay out existing debt and support operational and growth plans. (Answered by CFO)
Q: How is the Project Wallaby progressing in terms of delivering benefits? A: Project Wallaby is targeting to deliver more than $20 million of annualized benefits over the next three years to AMA Collision, although it is currently behind plan for this year. (Answered by CEO)