AMA Group Limited

Standing by and welcome to the AMA Group FY26 results call. All participants are in a listen-only mode. 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 one on your telephone keypad. If you wish to ask a question via the webcast, please enter it into the ask a question box and click submit. I would now like to turn the conference over to Mr Ray Smith-Roberts, Group Managing Director. Please go ahead.

Good morning everyone. Thank you for taking the time to join us for this presentation of the AMA Group FY26 year-end results. For those joining us via webcast, you should be able to view the presentation on your screen. If you are joining us by teleconference, you should have access to our investor presentation via the ASX platform or our company website. I will begin today's presentation with a business update along with the details of our portfolio business results. I'll then hand over to our Group CFO Dominic Rominelli who will take you through the Group Financials. I will then return to cover the outlook. We will 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 referring to our presentation, let's begin on slide four. I'm very pleased to report that AMA Group produced a record revenue of $1,039,000,000 in FY26, leading to a full year FY26 pre-AASB16 normalized EBITDA of $68,000,000. This is up 8.6% on FY25 and reflects growth in the majority of our businesses despite Q4, which is traditionally the strongest quarter for repair volumes, being affected by elevated fuel prices and public transport concessions. Operating cash flows after lease payments were $32.8 million for the financial year. Despite higher income tax payments of $12.5 million in FY26, an increase of $11.6 billion on FY25. This is a solid result, which was delivered for the full year, and it's headlined by a few things. Continued strong performance in our Capital Smart Network, which achieved an EBITDA margin of 10.6%. Strong growth in our specialist division, and ACM Parts went from a significant loss in FY25 to a $2.3 million EBITDA in FY26, reflecting a stronger performance and operating improvements. Now to talk about our businesses. Capital Smart achieved an EBITDA of $51.9 million in FY26, down from $58.4 million, but certainly in line with expectations, due to the higher incentives obtained in the prior year. AMA Collision showed volume, revenue and EBITDA growth with continued focus on process improvements to enhance margins. Our Wales business performance was impacted by softer work provisions of large crash repair work, but pleasingly, bucking the trend, Q4 of FY26 was the strongest quarter of our financial year. Our specialist business has seen considerable growth and improved financial performance, with increased capability and capacity for mechanical work and ADAS calibrations, along with continued improvement in our prestige sites. ATM Parts is now operating at a consistent and profitable manner, reflecting stronger performance and operating improvements. AMA's vertical integration, combining broader vehicle repair services with automotive parts sourcing and supply, enables greater control over our repair quality, turnaround times and costs, providing us with a key, unique competitive advantage, now with a much wider value chain. Underlying financial performance improvement and key strategic growth will continue into FY27 and beyond, and will be covered later when we talk in the outlook. Now to slide 5 in Capital Smart. Revenue was steady in FY26 at $490.7 million. Normalised FY26 pre-AASB 6DM EBITDA was $51.9 million, down on FY26 as outlined. Capital Smart continues to deliver improved customer outcomes in conjunction with our key customer Suncorp. We achieved our any but darn margin target of 10.6%. Strong cost control measures and productivity initiatives have preserved these margins, offsetting the impact from bonding incentives received in the prior period. There has been a reduction in the number of drivable repairs since the start of the geopolitical events in the Middle East, which commenced in March. This has reduced the amount of drivable work, largely from customers delaying minor repairs and with some reduced road use. We opened three new sites in FY26, one in South Australia, one in New South Wales and one in Tasmania. These were all areas where the network was underrepresented. We also closed two sites, one in Metro Melbourne and one in New Zealand. We will continue to grow, refresh and rationalise the network with customer needs and market opportunities. There is a continued focus to improve the effectiveness of our highly skilled team through targeted initiatives and systems, processes, tools and technology. Capital Smart in FY27 will seek further improvement and growth from capacity management opportunities, pursued by extending our customer base and service offerings and through these targeted initiatives and systems and process, tools and technology as mentioned. Turning to slide 6, an AMA collision. AMA Collision remains on the path of improved network optimisation and capability, delivering higher volume revenue and earnings than the prior financial year. Revenue increased by $19.6 million to $379.7 million, an increase of 5.4%, and our normalised FY26 pre-AASB16 EBITDA of $10.6 million is up 43.2% on FY25. This was achieved on the back of continued focus on and investment in the network footprint and optimisation with various expansions, relocations and rationalisations completed and we have more to come in the new financial year. will continue in FY27, driven by increased margins and volumes, by the business focusing on improving the team's capability, by embedding best practice operational models, delivering consistent systems, processes and behaviours. Current economic conditions are shifting available work mix opportunities with a skew to more non-drivable complex repairs. Pleasingly, insurance relationships continue to improve and strengthen, with volume and market share growth seen across most major insurers. As said, further improvement will continue in FY27, driving increased margins and volumes. Now to slide 7. Our wilds business delivered a normalised pre-AASB 16E radar of 7.7 million in FY26, down 2.8 million from FY25. Wales experienced a shift in work mix through this year, with reduced claim volumes and large-scale repairs, as well as the deferral of non-urgent repairs impacting growth, particularly in New South Wales and Western Australia. These factors are expected to abate with more large-scale repairs expected to return in the next 12 months, together with other revenue opportunities growing. We've already seen evidence of this in the last quarter, leading to the expectations that Wales will continue to grow in FY27. The business continues to strengthen its relationship with both market-leading insurers and smaller insurers who are seeking a preferred repairer. as well as continue to expand its service to fleet and new customers with different types of services and repairs, including partnerships with new heavy vehicle market entrants, machinery, motorhome and specialist equipment suppliers. On to slide 8, our specialist business. The specialist business achieved strong growth with a further runway to expand. Revenue in FY26 was $65.6 million, an increase of $9.3 million, or 16.5%. Normalised FY26 EBITDA was $5.6 million, a significant $4.1 million increase on the prior year, with a significantly improved EBITDA margin now at 8.6%. The mechanical and ADAS business capacity increased through the expansion of our ADAS celebration and mechanical service offering, with further opportunity available through expansion where opportunity exists within the current network. This will continue to grow positively and make a substantial contribution to the Group's profitability, delivering additional incrementable EBITDA in FY27. Development plans continue with further expansion planned, for a business that is quickly becoming a meaningful part of our diversified group earnings. The prestige sites NFY26 Revenue and EBITDA were ahead of the prior financial year. Improvements were driven by best practice operational models being invented, consistency continuing to enhance capability, which is strengthening our financial performance. We have achieved good progress at the two Queensland sites, while the two sites in Victoria have been impacted by lower available volume. We have strengthened our relationships across our key OEM and insurance partners. Now onto Slide 9, our ACM Parts business. ACM Parts is producing consistent profitability month on month. The ACM parts pre-AASB 6B normalised EBITDA is $2.3 million, up $7 million on the prior financial year. There was a significant uplift in the financial performance as key initiatives relating to recycled, parallel and aftermarket parts and consumables have yielded very positive results. There will be ongoing investment in inventory management and digital sales channels, improving customer access and margins. The network optimisation strategy has been very successful, with the relocation of our site in Queensland to a more fit-for-purpose facility now complete and some further optimisation works underway in our Western Australian facility. Procurement continues to be one of the businesses' biggest opportunities. With continued focus on supply chain and procurement efficiency and sustainability, the initiatives are ongoing. ACM now is also a strategically important part of our diversified group earnings and repair network capability and provides a positive differentiation to our market competitors and a significant competitive advantage. 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 full year FY26 financial performance. The financial performance is presented on a post-AASB16 basis below EBITDA. However, we have included a supplementary analysis on slide 19 which provides a comparison of full year FY26 results on a pre- and post-AASB16 basis. As Ray has outlined, FY26 financial performance is a continued improvement on FY25. with revenues up $25.4 million or 2.5% to a record $1,039 million and a normalised pre-AASB 16 EBITDA of $68 million up $5.4 million or 8.6% on FY25. This reflected on an EBITDA margin improvement from 6.2% to 6.5% for FY26. This uplift was largely driven by continued operational performance improvement of our AMA collision specialist and ACM past businesses. Finance costs in total were down $8.7 million for FY26. Finance costs other reduced by $12.7 million for the full year due to the improved cost of funding and debt levels following the refinancing of the Group's senior bank debt in the prior financial year. The prior period included one-off impacts from prior refinancing activities. This benefit was partially offset by an increase of $4 million in the finance costs for our leases, reflecting the increase in market rents and interest rates. The increase in income tax expense reflects the uplift in earnings, particularly within the Capital Smart Tax Group and the prior period under-provision adjustment has been corrected during the financial year. These movements resulted in net profit after tax of $7.7 million versus a net loss after tax of $6.2 million in FY25. The normalisations we have called out for FY26 relate to site closure, relocation and restructuring costs. The normalisation in the corresponding period of $3.5 million related to a legal settlement claim relating to an earner of an acquisition that took place in 2018. Pleasingly with the net profit after tax produced in FY26, together with strong operating cash flows and a robust balance sheet, the Board determined it appropriate to declare a fully franked dividend of 0.5% per share. This is the first dividend AMA has declared since 2019. Turning to slide 12 and the summary financial position. We ended the full year to 30 June 2026 with net debt of $18.4 million, a slight increase from the 30 June 2025 balance of $17.7 million. The Group continues to meet all its financial covenants and expects to operate within them for the next 12 months. We also completed a 1 for 10 share consolidation during the financial year. The group maintains a disciplined approach to capital management, and with our strong balance sheet and operating cash flows, we are well placed to actively manage capital expenditure to deliver organic growth, funding M&A activity to deliver inorganic growth, initiation of a dividend program, first time since 2019, and buying back shares via the program initiated this year. Now to slide 13. The group had positive operating cash flows of $32.8 million for the full financial year of FY26, once the principal elements of lease payments are taken into account. This was $11.3 million lower than FY25 and was predominantly due to an increase of $11.6 million in income tax payments as our profits grew and we utilised our historical tax revenue losses within the Capital Smart Income Tax Group. FY26 saw capital expenditure payments of $30.3 million, a similar figure to the prior financial year. We anticipate capital expenditure to be around $35 million in FY27, with regular maintenance capex in the range of $12.5 million to $15 million on an annual basis. We expect this level of capital expenditure to decrease once we complete the catch-up capital expenditure from the prior financial years. You should also note that within our operating cash outflows that there were $6 million of cash payments relating to non-recurring expenditure, that is make-goods, lease costs on hibernated sites and redundancies. The Group has a healthy cash position at 30 June 2026. Turning to slide 14. Normalised corporate costs were $10.1 million, $0.3 million lower than the prior financial year. We anticipate that these will be in the range of $12 million to $13 million in FY27, predominantly from a higher LTI expense in the coming financial year. Slides 18 to 21 provide supplementary financial information that will assist with the analysis. I'll now hand back to Ray.