Gold Coast-based panel beater company AMA Group announces first contract with major fleet

AMA Group expects COVID-19 “headwinds” to turn into “tailwinds” after inking its first deal with a major vehicle fleet.

BUNDALL-based panel beater consolidator AMA Group expects COVID-19 “headwinds” to turn into “tailwinds” after inking its first deal with a major vehicle fleet.

The company announced this morning it has secured a contract to service the 4000-strong SG Fleet.

SG Fleet is an ASX listed company that provides motor vehicle services including leasing, finance, salary packaging and fleet management.

It is AMA’s first contract providing repairs to a major fleet.

AMA Group has inked a new deal to repair vehicles in the 4000-strong SG Fleet. Photo: iStock

MORE NEWS

Premier's surprise plan to allow interstate travel

Border closure bringing boom to Burleigh

'Very pleased': Parents hail new principal for exclusive school

CEO Andy Hopkins said repair volumes were showing signs of improving as state and federal governments ease travel restrictions.

Prior to the shutdown of industry in March, AMA was flagging strong growth to deliver revenue in line with expectations for the second half.

“Our performance for April was better than expected and our net debt position at the end of April remains above our predictions,” he said.

“COVID-19 has brought positive changes and opportunities for our business. The consolidation of some sites will create a more efficient infrastructure for the future when volumes return, and in the coming months we expect to see an increase in potential acquisition opportunities.

“Most importantly, vehicles are returning to pre-COVID-19 levels which will drive demand through our business due to a likely slower transition to people making use of public transport.”

AMA Group CEO Andrew Hopkins. Photo: Supplied

Epic plan for new micro brewery and mancave on Coast

AMA warned in its market update that volumes for its Capital S.M. A. R. T business softened in April and that volumes for the business overall were likely to remain impacted by the COVID-19 situation in May and June.

It said it is closely monitoring costs “which may result in further downscaling of sites and workforces”.

About a fifth of AMA’s 188 panel beaters have been put into “hibernation” since March and the company has frozen “non-time critical capital expenditure” to keep a lid on costs.

The company is also negotiating with landlords on rental waivers and/or deferrals and staff have qualified for the Federal Government’s wagekeeper subsidy in Australia and as well as a similar scheme in New Zealand.

AMA was forced to withdrew its full-year guidance issued in February of normalised pretax earnings of between $73 million and $77 million due to the COVID-19 downturn.

In a piece of good news AMA said it expects final negotiations with major insurers to result in better pricing to “recover the costs of increasing motor vehicle technology”.

“The new arrangements, which take effect from 1 July, 2020, will deliver meaningful growth in real terms once repairs volumes return to stable levels.”

AMA reported revenue of $396 million in the first half, up 32 per cent.

It recorded a net loss of $12.2 million once the effect of new accounting standards were taken into account.

Shares were flat in intraday trading at 64.5 cents.