AMA Group CEO and Executive Director Andrew Hopkins says he is keen for expansion of the organisation’s local and international footprint after COVID-19.
Speaking on a recent ‘Eureka Report’ podcast, Hopkins said he believes he can substantially build on AMA’s current $1 billion per year turnover and has identified Malaysia as a likely destination for the group’s move into Asia. Hopkins said he is also considering a potential expansion into the UK market, where he entered the body shop industry in 1990.
“[Australia] is a $7 billion industry and we’re $1 billion,” said Hopkins. “The UK is consolidated up over 50 per cent, the US is consolidated up over 50 per cent, so there’s a good opportunity for us to carry on consolidating in Australia, but I’ve got a vision of taking the company on a bit of a global march now because we have got such great people and great processes with Gemini and Capital S.M.A.R.T. I’d love to take it into Asia and Malaysia, and even back to the UK… once we get through this COVID so we can travel and get things sorted, I think there’s a lot more expansion in Australia, but I do think there is a lot more expansion on our doorstep as well.”
Hopkins told podcast host Alan Kohler that an aging workforce could play a role in AMA’s expansion.
“I think there will be lots and lots of repairers fall by the wayside for many reasons, but mainly because the average age of a panel beater in Australia is about 65, so there’ll be a lot of retirees and they’re all [sitting] on three or five million dollars’ worth of real estate. [That’s] a lot of panel shops retiring, so there’ll be less and less panel shops available to do the repairs and therefore for AMA, as we’re growing, I think there’s a big opportunity for us to pick up more market share over the next three to five years.”
According to Hopkins, greater volume may also result from an increasing car parc and greater vehicle complexity.
“What the thought is in Australia is [that] because we’ve got population growth in Australia… we’ve got positive immigration – well we did have before COVID – the car parc would actually grow in Australia as well. So, there would be more vehicles on the road and although they are safer, they still crash, but they are more expensive to repair… AMA’s unique benefit is that we’ve got the ability for the training and the tooling to gear up for these new motor vehicles and the new technology, where probably your average panel shop wouldn’t be able to spend 300 grand on a calibration tool and the training for candy apple red paints and three-stage pearls, and the equipment and the spray booths, so we see more opportunity for us in the future.”
Hopkins also anticipates greater road congestion as Australia reopens, leading to a higher accident rate.
“The thought of our industry, and not just from me – from insurers and governments, and we are seeing it overseas from China, the TomTom numbers and the toll numbers – [is] that more people are opting for their vehicles as opposed to public transport, so we think we’ll see more volume in the future, for sure.”
AMA has hibernated 22 of its 186 locations during the COVID-19 pandemic, an outcome Hopkins described as an “excellent result”. The group has also seen revenue begin to recover, but Hopkins said future earnings are difficult to predict.
“We’re pretty confident with the business and the volumes that we’re seeing, and we haven’t wasted any time to cut out any unnecessary cost in the business through this COVID, so we’ve got reduced costs,” said Hopkins. “We’ve had favourable results from the insurers that have helped us with the extra cost in technology… so we’ve got a little bit of increase in the repair costs [and] quite a bit of reduction in the business from cutting out projects that were unnecessary, which happens when you get to a billion dollars.
“With reduced costs and more revenue for the same business, I think it’ll perform really well, providing there’s no lockdown.”
Listen to the podcast and read the transcript here. AMA also issued a press release after the transcript correcting errors in the podcast related to the company’s financials – read that here.