AMA Group has released its quarterly cash flow and activities report for the second quarter of the 2021-2022 financial year to the ASX, which shows the group ended the quarter with a cash balance of approximately $81 million and unused available finance facilities of approximately $8 million.
Based on the approximately $9.8 million net cash used in operating activities in Q2, AMA said the total available funding of $89 million provides an estimated nine quarters of funding available at the December period end. The group said this estimate of available funding is based on continued operation in the COVID-19-affected conditions experienced during the quarter, and not the expected improved longer term operating conditions of a post COVID-19 environment.
According to AMA, the business remained significantly COVID-19 affected throughout much of Q2, while monthly repair volumes reached their lowest level in October for the six months ending on 31 December 2021 (the first half of the financial year).
AMA said that as the impacts of the Delta variant subsided and COVID-19 related restrictions began to ease in November 2021 in New South Wales and Victoria, the group prepared for an “exceptionally busy summer season”.
“Repair volumes increased across the quarter, trending broadly with increases in mobility; however, absolute repair volumes in December were impacted by the shortened work month due to the summer holiday period,” AMA said. “The strength of the rebound in repair volumes was also impacted as the population quickly transitioned from government mandated restrictions to self-imposed isolation and caution, as the Omicron variant arrived in Australia in late November 2021.”
According to AMA, the group carefully managed staffing levels across the period, hibernating staff throughout the latter half of 2021 because of the depressed repair volumes.
“These prudent actions are reflected in lower staff costs in [Q2 FY22] compared to [Q1 FY22],” the company said. “In support of our people, and to ensure the retention of our workforce heading into the summer season, the AMA Group brought hibernated staff back to work in advance of anticipated higher repair volumes. While this was an important business and people decision, it marginally increased the cash used for operating activities.”
AMA hoped the six months ending 30 June 2022 would bring a more “normal” set of operating conditions, but the impact of COVID-19 on the Australian and New Zealand economies continues to challenge the group. COVID-19 related absenteeism further affected an already constrained labour market, with AMA working to minimise the effects of the shortages through labour force management. The difficulties resulting from a reduced labour force were further compounded by increased repair booking cancellations and no-shows for booked repair drop-offs and pick-ups.
Despite these challenges, AMA said the group remains well placed for the future, with a strong cash position following “prudent” management actions undertaken since the capital raising in 1Q22. “With substantial cash reserves, the business is well positioned to manage the ongoing uncertainty created by the ongoing impacts of COVID-19,” AMA said.
Carl Bizon, CEO of AMA Group, praised the staff for their response to the challenges presented to the pandemic.
“This is an incredibly difficult time for so many on our AMA Group team and more broadly in our communities,” Bizon said. “I thank each member of our team for their hard work and dedication in what is a very difficult set of circumstances, from those unwell or isolating at home to their teammates working on the floor with reduced staffing levels.
“Everyone’s commitment to ensuring we are there for our customers has been second to none and I am incredibly grateful for the team’s efforts.”