AMA Group has reported a statutory net loss after tax of $99.1 million for the 2020-2021 financial year (FY21) compared to a net loss after tax of $71.5 million in FY20. According to AMA, the result was significantly affected by a $90.6 million non‑cash impairment charge of goodwill related to the Capital S.M.A.R.T acquisition, with the impairment reflecting the risk and uncertainty associated with COVID-19 and related allowances related to revenue projections.
If not for the goodwill impairment charge, AMA would have made a profit – the company announced normalised EBITDAI (earnings before interest, taxes, depreciation, amortisation and impairment charges) of $71.5 million, an increase of 35 per cent on financial year 2020. The firm also announced revenue and other income from continuing operations of $919.9 million, an increase of 11 per cent on the prior year. AMA said the result is largely attributable to a full 12 months of trading in respect of the Capital S.M.A.R.T and ACM Parts acquisitions, along with the turnaround in the latter.
According to the company, extended periods of lockdown due to the COVID‑19 pandemic and associated decreased repair volumes led to the temporary standing-down of staff and hibernation of some of the most impacted sites. The group received and passed on wage subsidies from the Australian and New Zealand governments, which gradually expired in the first quarter of FY21, also providing support to its employees during this time.
“These actions supported employee retention, enabling a return to normal trading as quickly as possible once restrictions and lockdowns lifted and volumes returned,” AMA said.
Synergies from the Capital S.M.A.R.T acquisition in October 2019 were realised on a full year run rate and normal volume basis in line with expectations, despite the challenges associated with the integration rollout during COVID‑19 lockdowns.
The group said it reduced net debt by $53.8 million mainly from the proceeds of the sale of the ACAD and Fully Equipped businesses, closing FY21 with net debt of $173.3 million (excluding any contingent vendor consideration) and $57.7 million in undrawn debt facilities.
Looking ahead, AMA said the business environment remains challenging with continued disruptions due to the prolonged impact of COVID-19. Additional outbreaks have resulted in business and mobility restrictions during the third quarter of 2021, with mixed views on the timing and extent of market recovery. Volume rates continue to experience variability throughout the various states in which the group operates, primarily resulting from different levels of COVID-19 restrictions imposed by each state.
The company said it will continue to mitigate the effect of the current economic disruptions on its operations, which primarily impact repair volumes and supply chain inputs.
Accretive growth will remain the company’s long-term focus, through organic growth from the group’s existing operations and business acquisitions. AMA said its directors are confident that once normal trading conditions return, the group will be well positioned for success into the future.
AMA listed its other FY22 operational priorities as:
- Development of mutually beneficial customer contracting arrangements, reflecting the post COVID-19 market environment
- Realisation of the benefits of the new business structure by identifying and further enhancing best practice operations
- Continued growth of the supply business unit to expand margins and secure supply
- Capitalisation on industry technology advancements through innovation
- The ongoing effort to position AMA Group as ‘A Great Place to Work’ through recruitment, development and advancement of employees at every level of the business.