AMA Group has reported continued “positive turn around momentum” as it heads into the historically strong fourth quarter.
In its Appendix 4C Quarterly Cash Flow and Activities Report for Q3 FY2024 (unaudited), the group posted a pre-AASB 16 EBITDA of $11.1 million, an increase of $6.3 million (128.8 per cent) from Q2 2024, reflecting seasonality in earnings over the soft summer holiday season. According to AMA, improved repair volumes, parts sales and labour recovery positively impacted margins.
Operating cash outflow was $6.8 million, excluding $8.3 million in delayed receipts because of public holiday processing interruptions. Had cash receipts landed without these delays, the group said it would have recorded positive operating cash flow of $1.5 million. The result includes $8.6 million in principal elements of leases and semi-annual interest payments of $7.3 million and tax refunds of $6.4 million.
The March 2024 net senior leverage covenant was achieved with significant headroom.
AMA ended Q3 FY2024 with a cash balance of $23.8 million and unused available finance facilities of $1.6 million (excluding the cash receipts delayed due to public holiday).
The group predicts positive operating cash flows in FY2024, including all lease payments and changes in working capital. Returning to historical trading terms is now expected to occur in FY2025 once refinancing has been completed. As a result, total cash flow is now only expected to be positive for FY2024 after including capital expenditure and net benefits of equity raising and debt repayment.
AMA maintained its FY2024 guidance range of $42 million to 49 million normalised pre-AASB 16 EBITDA, or $89 million to $96 million normalised post-AASB 16 EBITDA.
According to AMA, the Vehicle Collision Repair division continued to perform ahead of expectations, with revenue rising 5.5 per cent on Q3 FY2023. Despite lower repair volumes, the increase in hours required for each repair was reflected in a higher average price of repair.
Capital S.M.A.R.T also outpaced expectations, with Q3 2024’s result more than offsetting “challenges” in AMA Collision. ‘Project SHIFT’, which evolved Capital S.M.A.R.T’s service model, was completed ahead of plan, delivering annualised pre-AASB 16 EBITDA benefits of over $20 million which more than offset transitional support provided by Suncorp for FY2024.
Three AMA Collision facilities were converted to Capital S.M.A.R.T sites as the group aligns the network to reflect current volumes and growth opportunities. One Capital S.M.A.R.T site was relocated to a larger facility, while a hibernated AMA Collision site reopened as Capital S.M.A.R.T.
AMA Collision also launched ‘Project Wallaby’ to embed sustainable improved performance through customer service and operational adjustments. The project is targeted to deliver more than $20 million in annualised pre-AASB 16 EBITDA benefits over the next three years.
The Wales business unit continued to deliver strong revenues and earnings (pre-AASB 16 EBITDA up 42.2 per cent on Q3 FY2023), benefitting from increased throughput compared to the previous corresponding period.
AMA said expansions in Townsville, Newcastle and Perth are targeted to deliver $1.5 million in annualised pre-AASB 16 EBITDA in the next two years.
Reclaimed parts margins continue to be a headwind to profitability for ACM Parts, due to prevailing higher auction purchase prices and lower scrap commodity returns. The division increased its focus on offering collision parts outside of AMA Group, achieving record external collision parts sales over the quarter.
ACM Parts also delivered record parallel parts sales per day, representing an increase of $45,000 or 35 per cent for the quarter and 53.2 per cent year-to-date compared to Q3 FY2023.