AMA Group has posted an operating loss before tax of $11.868 million in the first half of the financial year ended 31 December 2023, a considerable gain over last year’s operating loss of $37.267 million. According to AMA, the result was mainly due to a commercial pricing reset on 1 July 2023 relating to the Capital S.M.A.R.T contract with Suncorp.
“[The result] continued the improved business performance trajectory, building on the second half of FY2023,” said AMA. “Improved commercial pricing, easing labour conditions and moderating inflation helped drive a significant improvement in the financial results.”
Group revenue and other income increased 10 per cent to $469.257 million, while Vehicle Collision Repairs revenue was $413.804 million (H1 2023: $372.201 million). Repair volumes decreased five per cent from the prior period, driven by the September 2022 site rationalisation which removed around two per cent of largely unprofitable volume. Repair severity mix meant that the remaining volume reduction was recovered through increased repair pricing.
Depreciation, amortisation and impairment ($35.347 million) was lower than the prior comparative period ($44.905 million), as H1 2023 included $6.899 million of impairments for sites closed or hibernated (H1 2024: $1.731 million).
Finance costs increased over the prior comparative period due to higher base rates on AMA’s senior debt facility. The company was unhedged in the current period compared to 60 per cent in the prior period, following the closure of a fixed rate swap in June 2023.
During the half-year, AMA continued to invest in replacement capital expenditure and new site equipment. In December 2023, the company repaid $35 million of debt using part of the $55 million ($51.940 million after costs) equity raising completed in September 2023.
AMA generated $10.761 million in cash flow from operations during the period (H1 2023: $1.249 million). Cash flow from operations in the prior period was positively impacted by the $15.331 million tax refund, whereas no tax refund was received in the current period. A refund is expected in February 2024 following submission of the FY 2023 tax return in December 2023. No further claims of carry-back losses are available to the company after this refund is received.
AMA said it maintains a strong financial position, ending H1 2024 with a cash balance of $34.338 million and net assets of $116.532 million.