AMA Group’s Appendix 4C Quarterly Cash Flow and Activities report for the quarter ended 30 June 2023 shows positive operating cash flows over H2 2023. Strong net cash from operating activities generated $19.4 million during the quarter, reflecting increased cash receipts driven by improved pricing and billing, a net decrease in inventory at ACM Parts, and $6.1 million received on close out of an interest rate swap.
The Q4 2023 report also showed a continuing upward trend in underlying cash flows, excluding a corporate tax refund and an interest rate swap close out, and including the principal elements of leases over the quarters from Q1 2023 to Q4 2023. “This is reflective of the FY2023 transition year, and the Group is pleased to see the impacts of pricing and operating productivity initiatives beginning to flow through,” said AMA.
The company ended Q4 2023 with a cash balance of $28.9 million (up $8.4 million from 31 March 2023) and unused available finance facilities (undrawn bank guarantees) of $1.5 million.
Fourth quarter volumes were “approximately flat” on Q3 2023 and down seven per cent on Q4 2022, with a stabilisation of the new network configuration “aligning to profitable volume opportunities”. AMA said the industry continues to experience increasing severity complexity and cost to repair, resulting in lower absolute volume per labour hour – the company added that this was consistent with its decision not to participate in low-margin or loss-making, fast turnaround repair volumes in the AMA Collision business unit.
New pricing with most AMA Collision work providers became effective on 1 July 2023. AMA and Suncorp continue to negotiate renewed pricing under the Motor Repair Services Agreement for Capital S.M.A.R.T, with the interim pricing package announced in November 2022 to continue in the meantime.
The company continues its make-good programme on sites closed during network optimisation activities, with six properties handed back during Q4 2023. “There are a further 10 closed sites with outstanding make good requirements,” the report said.
AMA spent $3.5 million on property, plant, and equipment during the quarter, including $2.1 million invested into the South Australian Heavy Motor site and the Arundel, Queensland collision repair centre.
In addition to its collision operations, AMA said the ACM Parts’ Parallel parts import programme continues to produce record performance.
The company confirmed that its covenant testing requirements for 31 March 2023 were satisfied.
AMA maintains its updated FY2023 guidance for $60 million to $68 million normalised post-AASB 16 EBITDA, with an outcome expected near the middle of this range (subject to completion of the year-end audit process), indicating a significant year-on-year improvement between $38 million to 46 million on a normalised operating basis. The company says it will update FY2024 guidance on finalisation of the outcome of Capital S.M.A.R.T re-pricing or at FY2023 results.