Release Date: August 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AMA Group Ltd (ASX:AMA, Financial) reported a 7.8% increase in group revenue, reaching $895 million.
- Normalised FY24 pre-AASB-16 EBITDA increased by 125.1% to $49 million.
- Capital SMART performed ahead of expectations, delivering over $20 million in annualised pre-AASB 16 EBITDA benefits.
- Operating cash flow after lease costs was positive at $10.5 million, an improvement of $24.9 million from FY23.
- The company successfully completed a recapitalisation in August 2024, providing funding certainty for future growth.
Negative Points
- AMA Collision's revenue fell slightly, and its normalised FY24 pre-AASB16 EBITDA decreased by $6.3 million compared to FY23.
- The company faced operational disruptions in AMA Prestige due to site relocations.
- Higher auction prices and lower scrap commodity prices negatively impacted reclaimed margins in the ACM parts business.
- The company has a significant net debt position of $143.9 million, including convertible notes.
- Ongoing negotiations with insurers around contracts indicate potential volatility in commercial terms.
Q & A Highlights
Q: Are there ongoing negotiations with insurers around contracts or are these mostly done now? Or are these always ongoing?
A: The contracts are always ongoing. We constantly monitor the performance of each contract and share data with insurers to ensure we are aligned on the viability of each contract. This is a continuous process with formalized steps within the dialogue.
Q: Do you expect the pathway to a 9% EBITDA margin to be fairly steady over the next five years, or do you expect it to be back-end weighted?
A: The 9% EBITDA margin target is set for five years, acknowledging that we are in a turnaround phase which may have some ebbs and flows. Some of our businesses, like Capital SMART and the heavy vehicle segment, are already performing above this target, so we hope to achieve it sooner.
Q: Can you clarify the timeline for the sale of ACM parts? Is it this calendar year or next?
A: The sale of ACM parts is targeted for completion within this calendar year.
Q: Any indication for 2025 EBITDA guidance?
A: For FY25, we expect performance to be better than FY24. While there were some one-off items in FY24, particularly the Suncorp incentive, we anticipate that FY25 will surpass FY24, but no specific guidance figures have been provided.
Q: Are there any updates on the interested parties for the sale of ACM parts?
A: We have several interested parties currently conducting their preliminary analysis. Non-binding indicative offers are due next week, and we aim to close the transaction by the end of the calendar year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
