AMA Group sees auto repair volumes decline to their lowest level in two years

Queensland-based AMA Group suffered a $46.3m interim loss as the volume of smash repair work it carried out fell to the lowest since the start of the pandemic.

AMA Group suffered a $46.3m net loss in the half-year to December.

Auto parts and repair services provider AMA Group has plunged into the red as pandemic-related pressures exact a fearsome toll.

The Gold Coast-based company announced Tuesday that it had suffered a $46.3m net loss in the half-year to December.

That was a sharp reversal from the modest $5.8m after-tax profit that it had generated in the same prior period in 2020.

It also raised the possibility that the group might be heading for its third consecutive annual loss, following $97m and $70m net losses in the past two years.

CEO Carl Bizon

Revenues fell nearly 4 per cent to $418m as the volume of repairs fell to the lowest since the start of the pandemic in early 2020.

Higher costs for consumables and increased expenses for staff as a result of the end of JobKeeper subsidies also added to the squeeze on the bottom line. AMA said it had received $28.4m in JobKeeper assistance in the first half of 2021.

A $16.7m impairment related to site consolidation also took its toll.

No interim dividend will be paid to investors, who sent the shares down 5 per cent to close at a near-two year low of 33 cents.

Despite the substantial challenges, AMA chief executive Carl Bizon said he was optimistic that the group could recover strongly as the nation emerges from under the shadow of Covid.

“Repair volume challenges are situational, not structural. We are well placed to weather the ongoing effects of Covid and are actively tackling the industry’s parts and labour supply issues,’’ Mr Bizon said.

“The continued downtrend in COVID-19 cases leaves me optimistic about return to historical repair volumes.”

Helping the company rebound will be a sound balance sheet, which shows it had $81.3m of cash, $8.2m in untapped debt facilities and $307.6m of net assets.

AMA also continues to pare down its debt burden, shaving it from $340m in mid-2020 to $165m today.

It undertook a $150m capital raising during the half year and noted that $72.5m of debt had been repaid early during the period.