AMA Group Limited

Thank you for standing by and welcome to the AMA Group HY26 results briefing. There will be a presentation followed by a question and answer session. If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad. To ask a question via the webcast, please enter it into the ask a question box and click submit. I would now like to hand the conference over to Ray Smith-Roberts, Group Managing Director. Please go ahead.

Good morning everyone. Thank you for taking the time to join us for the presentation of the AMA Group FY26 half year results. For those of you joining us via webcast, you should be able to view the presentation on your screen. If you're joining us via teleconference, you should have access to it via our investor presentation on the ASX platform or our company website. I'll begin today's presentation with a business update along with details of our portfolio business results. I'll then hand over to our Group CFO, Dom Romanelli, who will take you through the Group Financials. I'll then return a bit later to cover Outlook. We'll be taking questions throughout the webcast facilities today. You can submit these at any time during the presentation and we will address them at the end. So if we get underway, let's begin on slide four, a bit of a 1.5-26 overview. I'm pleased to report that AMA Group produced the first half result for FY26 of pre-AASB 16 normalised EBITDA of $30.5 million. That's up almost 22% on the first half of FY25 and continues our positive profit growth trajectory. In conjunction with our profit growth, our operating cash flow also improved by 16.2% for the corresponding reporting period. This solid result we have delivered for the first half is headlined by continued strong performance in the Capital Smart Network, considerable improvement in the financial performance of our AMA Collision Network and ACM parts contributing a positive EBITDA to the Group for the first time. We are a people business and have continued to focus on upskilling, growing and retaining our team, always in a safe manner. Our LTIFR of 3.1 as at the 31st of December 2025 is down from 4.2 in the corresponding period. We've increased our team by 37 members and maintained our voluntary turnover at very good rates. So if we look at the headline of our businesses, Capital Smart achieved EBITDA of $24 million for 1.526, which is down from the $25.8 million of 1.525, but that is in line with our expectations. AMA Collision continue on its good progress in its optimisation and capability improvement program, with an $8.1 million EBITDA improvement in the first half of FY26 compared to the first half of FY25. With continuing focus in our disciplined approach, there is significant opportunity for further improvement to continue to drive improved financial performance. Wales' performance was impacted by software provisions of large crash repair work and improved financial performance is expected in the second half of FY26. The specialist business has seen significant improvement in financial performance, in particular within and inside our Prestige network. In relation to ACM parts, it continues to improve its financial performance as it implements continued operating improvement actions. Overall group revenue of $524.1 million increased $29.6 million on the first half of FY25. That's a 6% increase. With revenue from our core vehicle collision repair businesses increasing 6.6% to $503.5 million. Normalised half 1 FY26 pre-AASB 16 EBITDA of $30.5 million. This is up $5.5 million or 21.9% on the first half of FY25. Now EBITDA margin has increased from 5% up to 5.8% in the first half of FY26. Operating cash flow after the payment of lease cost was a positive $12.2 million, an improvement of $1.7 million or 16.2% on the first half of FY25. Underlying financial performance, improvement in key strategic growth is expected to continue into the remainder of this year and beyond, and we'll cover that in more detail later in Outlook. Now if we move on to the specific slides on each business. Slide 5, Capital Smart. In the first half of FY26, Capital Smart was in line with expectations. Capital Smart continues to deliver improved customer outcomes in conjunction with our key customer Suncor. Despite moderately lower volumes, particularly in Victoria, revenue increased as a result of higher severity and complexity of repairs. As previously indicated, 1.525 and 2.525 both included incentives which have not been nor were they expected to be replicated in FY26. This has impacted the EBITDA margin slightly, reducing it as expected. Continued cost control measures and productivity initiatives will preserve margins going forward. Three new sites were opened in the first half of FY26, one in South Australia, one in Newcastle in New South Wales and one in Tasmania. These are all locations where opportunity is strong and where our network is underrepresented. These will deliver incremental EBITDA as they ramp up in operations. We did close one site in New Zealand during the first half of this period. We have two further site expansions planned for this calendar year, one in Sydney and one in Adelaide, and hopefully they'll both be up and running before the end of the calendar year as said. Overall, revenue increased $7.8 million to $245.9 million, an increase of 3.3% on the corresponding period. Normalised half 1.26 pre-AASB 16E draft $24 million is down $1.8 million on the first half of 25. Capital Smart will pursue further optimisation and growth, with focusing on optimising operations through insourcing, timely repairs and utilising technology. We will continue to develop the workforce by attracting and training and mentoring high-performing people. And we will continue to invest in a nationwide network in both refurbishment of existing sites and new sites, where key opportunity locations are aligned to our customer needs. and will continue to evolve and enhance our customer experience and convenience. If we move on to the collision business, turning to slide 6. The transformational change program within OMA Collision Business continues with significantly improved financial performance as mentioned. Revenues increased $18.4 million to $194.1 million, an increase of 10.5%, and normalised EBITDA for 1.526 pre-AASB 16 of $6.1 million is up $8.1 million from 1.5 FY25. The operational optimisation and key capability focus within the business continues to achieve results. This discipline focus will continue for the remainder of this year and into next year, with further upside from existing operations will be derived. Key insurance customer relationships continue to improve and strengthen. The business will continue to focus on network optimisation, including investment in vehicle repair capacity, team capability and customer experience. This will include site rationalisations and site expansions where appropriate. In addition, we will see strategic growth where opportunity, capability and capacity are aligned. Overall, a very pleasing result in collision. We turn to slide 7 and the Wales Heavy Vehicle Division. The Wales Heavy Vehicle business was impacted by some softer work provisions in this last half. In half 1.26, it delivered a normalised pre-AASB 16 EBITDA of $3.8 million, down $1.6 million from one half FY25. There has been a shift in work mix during this period, with reduced claim volume and large-scale repairs being lower, impacting growth in some states. This is expected to persist in the short term, but more large-scale repairs are expected to normalise over the next 12 months. Wales is well placed to take on more volume with capacity available as the volume returns, with additional opportunities being explored with insurers, government, corporate and private fleet operators and insurance brokers. The business continues to strengthen its relationship with both market leading insurers and smaller insurers and fleets who are seeking preferred repairers, as well as continue to expand its service offering with different types of repairs including machinery, motorhomes and specialist equipment. We turn now to slide 8, our specialist division. AMA Prestige Sites, Revenue and EBITDA were well ahead of the prior corresponding period. Its financial performance was improved on the back of improved productivity following a range of initiatives being implemented. The business will continue to focus on enhancing capability and strengthening key OM and insurance relationships. The TechRight business volumes have increased in 1.526 compared to the prior corresponding period, which has led to improved financial performance. Development plans continue where appropriate. Our truckwright mechanical division, the financial performance was also ahead of last year and the prior corresponding period. Work on optimising these sites in Queensland and Western Australia continues. We move to Slide 9, ACM Parts. The ACM Parts business continues to improve with positive pre-AASB16 normalised EBITDA of $0.7 million, up $1.4 million to the corresponding period. There was a strong uplift in financial performance as key initiatives relating to the reclaim and genuine parts businesses and growth in the consumables business have yielded positive results. Network optimisation or our warehouse capacity remains a key focus with a planned relocation of a site to a more fit for purpose facility currently underway. The business has seen a strong uplift in external revenues. This is attributed to a strong focus on operational quality and service performance, along with a competitive offering given from improved sourcing. Procurement continues to be one of the business's biggest opportunities. With the business now self-sustaining and continuing to improve its performance through these operational efficiencies, we will continue to focus on the outcomes we can control and maximise value for our company. I will now hand you over to Don to take you through the group financials.

Thanks Ray and good morning everyone. Slide 11 is a summary of the first half FY26 financial performance. The financial performance is presented on a post-AASB 16 basis below EBITDA. However, we have included supplementary analysis on slide 19 which provides a comparison of first half FY26 results on a pre and post AASB16 basis. As Ray has outlined, our first half FY26 financial performance was a continued improvement on the first half of FY25 with revenues up $29.6 million or 6% to $524.1 million. and normalised pre-AASP EBITDA of $30.5 million up $5.5 million, 22% up on the first half of FY25. This reflected an EBITDA margin improvement from 5.0% to 5.8% for the first half of FY26. If we look at purely at our core vehicle collision repair businesses, our EBITDA percentage margin grew from 5.4% to 5.9%. This uplift was largely driven by the continued operational performance of our AMA collision, specialist and ACM parts businesses. Finance costs in total were down $1.5 million for the first half of FY26 when compared to the corresponding first half period. Fleecingly, finance costs other reduced by $3.7 million for the first half year, due to the improved cost of funding and debt levels following the refinancing of the Group's senior debt in February 2025. This benefit was partially offset by an increase of $2.2 million in the finance cost of our leases, reflecting the increase in market rents and interest rates. Consistent with FY25, there is no dividend declared for the first half of the 26 financial year. And the increase in income tax expense reflects the uplift in earnings, particularly within the Capital Smart Tax Group, the non-deductible nature of our P&L expense relating to our Executive Share Plan and prior period under-provision adjustments that have been corrected. The normalisations we have called out for the first half of FY26 relates to planned site closures within AMA Collision which represents $0.8 million and the planned ACM Warehouse relocation of $0.6 million. The normalisation in the corresponding period of $3.5 million related to a legal settlement claim relating to an earn out of an acquisition that took place in 2018. Turning to slide 12 and the summary financial position. We ended the first half to 31 December 2025 with net debt of $20.7 million, a slight increase from the 30 June 25 balance of $17.7 million. Our balance sheet remains strong and provides the organisation the capability to execute its capital expenditure program. The Group continues to meet all its financial covenants and expects to operate within them for the next 12 months. and we also completed a 1 for 10 share consolidation during this period. Now to slide 13. The Group had positive operating cash flows of $12.2 million for the first half of FY26, once the principal elements of lease payments are taken into account, which was an improvement of $1.7 million or 16.2% on the corresponding half year period. This was driven by the Group's stronger EBITDA, continued improved cash management, albeit we are now starting to pay income taxes, which we will continue to increase in the second half of the financial year, and $2.5 million reduction in interest paid due to our improved customer funding. The first half of the financial year saw capital expenditure payments of $15.3 million, an increase of $5.6 million on the corresponding half-year period. This was primarily due to investment in greenfield sites and investment in replacement equipment and site expansions. The group has a healthy cash position at 31 December 2025. Turning to slide 14. Normalised corporate costs were $2.2 million higher than in the corresponding half-year period. This was predominantly due to a higher expense of $2 million relating to an executive share plan in this half year period compared to the corresponding half year period. This expense is of a non-cash nature and is only deductible for income tax purposes if the shares ultimately vest. The normalisation noted in the slide for the last year's half year period related to the legal settlement claim over the year now calculated on a 2018 acquisition. In addition, slides 18 to 21 provide additional financial information that will assist with your analysis. I'll now hand back to Ray.

Thank you, Don. If we now turn to slide 16 and the outlook. AMA Group continues to progress on its journey to achieving a pre-AASB 16 EBITDA percentage of 10% within our core collision vehicle repair businesses. I've set a target of doing that in the next three to four years as a maximum, but I'm confident of doing it sooner. Capital Smart is expecting another strong result, albeit slightly lower than FY25. There will be some rationalisation within the existing network, partially offset by a key focus on specialised and value-added activities and on further developing high-performing, highly capable teams. As mentioned earlier, we have opened three sites so far this financial year where the network was underrepresented. The plan continues to be growth we demand and opportunity align with our key partners. AMA Collision continues through the Transformational Change Program with further operational capability improvements being implemented. A strong runway of continuous improvement exists with continued execution. Wales is expected to have a better second half than our first half. The specialist business will see within the prestige businesses continued improvement from operational parameters and focus. Our tech right and track right business will continue with their development and opportunity where capability and capacity are aligned and we will continue to improve the ACM parts performance maximising value to the company. Overall, we continue to target 5,000 repairs a week as an average volume, which we are very confident of being able to do sustainably. Strategic growth in all core businesses will be pursued where opportunity, capability and capacity are aligned via greenfield, brandfield and acquisition where appropriate. We will continue to further develop our high performing, highly capable team and work with our people. And finally, we maintain our guidance for FY26 financial year. We expect the normalised pre-AASB 16 EBITDA to be in the range of $70 to $75 million. I will now address questions. Please note that you may submit your questions through the webcast facility.

Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad. To ask a question via the webcast, please type your question into the ask a question box and click submit. Once again, to ask a question, please press star 1 on your phone. The first phone question today comes from Chris Savage from Bell Potter. Please go ahead.

Thanks and good morning. Ray, probably one for you firstly. volume. You flagged at the AGM that there'd been some weakness in September and they continued into October. Can you talk us through how it transpired for the rest of the year?

Yeah, look, overall, Chris, there's no one answer to the volume. We're a diversified group. We're continuing to see a change in landscape in what events look like and what severity and complexity looks like. But if we look at volume generally, it's improving. There was a couple of months late last year where it was a bit under what we expected. We're certainly seeing overall volumes stronger than where we expected as well. So they've actually gone the other way. So the volumes are sustained. We work in different areas and different divisions. If I had a volume concern, we're certainly seeing in our heavy business where we're overall larger collision work. So volumes themselves are holding up. The severity is a bit different because it's a higher write-off rate than what we've been seeing for a while. The volumes, we've seen some areas, we are heavily footprinted in Victoria. Victoria is a struggling state in a few areas, so we tend to feel it more relative to the overall nation. Volumes in New South Wales are strong. Volumes in Queensland are strong. Volumes in Western Australia are strong. South Australia, Tasmania, Canberra are strong. In most areas of our network, we have more than enough volume. We have pockets of our network where we don't have enough volume.

Sure. Thanks. So can you say what the repairs averaged in the first half?

In terms of volume?

Yeah, you're targeting 5,000 repairs per week. I'm guessing that the number was below that in that one.

We achieved, I think, 4,772 was the average. 5,000 a week, again, over a 52-week average is going to require weeks of 5,500. There are some weeks where, based on calendar cycles and public holidays and times of year where it's just not possible, if I just completed a week last week of 5,600. So the volumes, as I say, are strong at the moment, but they're trending in the right direction overall. As I say, we see a mix, there's an average repair price mix changing based on severity and complexity, but the volume isn't, other than in Wales, where it is probably seasonally or down where I expect it to normalise, Everywhere else, we have pockets of volume where, again, the network is overrepresented or there is a range of oversupply, but generally, volumes are fine.

Okay. And just your thinking on ACM Parks now, going forward?

Look, at the moment, I'm just focusing on what we can control. Chris, the business is going well. I mean, my thoughts around it, The better we get it, the more strategically important to us it is. A network our size, having influence over our own parts supply, then we'll always have strong relationships and heavy dependence on the dealer network and the OEM relationships. But there is a range of areas, especially as we move into the need for all of our new climate reporting and the area of recycled and those areas being right, it's becoming stronger. It's far less of a distraction. And we're actually continuing to get benefit out of it. Now, if someone comes along and writes me a big check, well, then we'll look at it. But for the time being, I'm focusing on what we can do. And it's working well.

All right. Thanks, Ray. Cheers.

Thank you. Once again, to ask a question via the phones, please press star 1. To ask a question via the webcast, please type it into the Ask a Question box. We'll pause for a moment to allow parties to enter the queue. The next phone question comes from Jared Gelsimone from Morgans. Please go ahead.

Morning, guys. Thanks for taking my question. Just a quick one, just interested on the volumes, how the volumes started this calendar year, just knowing that you had a really strong third quarter last year and trying to understand the third quarter, fourth quarter dynamic as we work through this half.

Everyone is, at the moment, very good, Derek. They're actually... We're on track for February in Smart to have our highest average per day volume that we've had all financial year. Volumes in Collision are strong and volumes in Wales are improving. Volumes in Prestige are also holding quite steady and up around target. So right now, there's always a bit of a glitch at Christmas where we have a range of where we don't operate, but we keep sites open or our ability to take vehicles open. We do a lot of drivable work, so you don't always get drivable. You don't get either volume of drivable work over Christmas. But the volume is built in January. It's continued to build in February. We're carrying a very good level of width at the moment. So the network's actually in very good shape from a width processing point of view. So I'm very happy with where volumes are right at the moment and how they're shaping up.

Perfect. And maybe just a small one on CapEx. I mean, obviously, you stepped up and you're just putting that investment back into the network. Just interested in the outlook for CapEx and how it sort of balances between new store openings as well as sort of the refurbs going through the rest of the network.

Jarrod, we're still forecasting CapEx of $40 million for the financial year, and we believe with the EBITDA that we're guiding towards, that we'll still end up with a positive free cash flow at the end of the financial year if we hit $40 million. But we'll keep monitoring it. Ray and I have always got our eye on the capex and how it's progressing through the year, how our cash is progressing through the year, and we'll manage it accordingly. But we're comfortable with still that $40 million forecast for the financial year.

Well, things are happening at a little bit slower rate there. We've got two site expansions in SMART that are underway. I've got two site expansions in Collision that are underway. But I'm also doing some site rationalisation, which unfortunately does take some capital, but it gets it right. So it is definitely at a slower rate. We're continuing to invest in our existing facilities where they need it. And there's still a little bit to do there. But again, it's all about increasing our capacity and our team's ability. Our continued throughput and our growth is not coming from new sites. It's coming from optimizing what we've got. In some areas, that does need some investment. If we look at it sort of very generally, it's going to be at a bit slower rate in the second half than it was in the first.

Thanks, Ray. Thanks, Dom.

Thank you. At this time, we're showing no further questions. I'll hand the conference back to Ray for any closing remarks.

Well, guys, I expected a few more than that, but thank you. Look, I think overall, I know for some of you, you were hoping for a stronger first half result, but I'm actually very pleased with where we are and where we're going. We are in good shape. All of the hard work that we're continuing to do, driving results. I know some of you will also be disappointed in the point I put on the 10% EBITDA and I put the three to four time year there. I think keep that very much in mind. I put that down as an absolute, you know, A, an annunciation point and I have no doubt we're going to get there. The speed to it still remains the biggest challenge. If I look at it from a run rate or a bridge perspective, I'm still very focused on the road to it, and I hope that what I'm working toward is being there on a quarter basis. I think it's possible we can be there for quarter four. this year, not guaranteed, but definitely possible. I hope to be there for two quarters next year. And then, you know, the year after that, it's about doing enough and being able to be enough above it in quarter three and quarter four, because it's very difficult to be there in quarter one and two, given those times. So, you know, things are going in the right direction. Don't think that I've changed my view. I haven't. I'm trying to describe it in a slightly different way to give people comfort, but the bridge to it is still very clear. As I said, there's another question come up there. Are we going to take that?

Absolutely. From the webcast, Capital Smart has rolled out three new sites and with two further planned. Is this keeping up with the previously flagged expansion? Are there new site rollouts representing any short-term drag on divisional earnings in Smart?

There's two parts to that. I mean, yes, these aren't new sites, Warren, that both of these are site expansions. So where we operate in Sydney, there's a site there that we're increasing the capacity. Where we operate in South Australia, we've already got three sites in South Australia, but we are pretty much doubling the capacity of one. So, yes, they are part of the previous plan in terms of where we're going. And, look, there is no doubt over, We've opened three new sites this year and we had some startup costs. Right now we're carrying some costs in Sydney. That site will get operational. We were carrying costs in Tasmania and we were carrying costs in Newcastle. all three of those now have moved into production and producing, and all three of them are actually at a positive EBITDA. But during the last half, they actually reduced it, no doubt. And that's going to happen a little bit until we get Sydney up and running. We're not carrying cost in South Australia yet, but that will commence in about April. So there is going to be some cost road, but we manage that very carefully.

Thank you, confirming that once again we're showing no further questions.