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.

Thank you Don. Now to slide 16 and the outlook. AMA Group continues to progress on its journey of achieving a pre-AASB16 EBITDA percentage of 10% within 3 years by leveraging our vertically integrated structure and widening value chain. Capital Smart is expecting another strong result in FY27 with an EBITDA margin in the range of 10-11%. It will achieve this result from initiatives to improve market share of Suncorp's total claims and initiatives to expand its customer base and service lines with a view to growth. AMA Collision will continue to implement operational capability improvements with continued focus and investment on the network footprint optimisation. Further improvement in margins and profitability will continue in the new financial year. Wales is expected to have a better year in FY27, with heavy and mixed showing improvement and non-traditional revenue streams now gaining momentum. The specialist business is expecting further growth in FY27 also. In the mechanical and ADAS business, the roadmap to capture a greater level of our mechanical and ADAS service is being rolled out, together with meeting the growth in ADAS demand. And our press release sites are continuing to embed best practice operational models and explore growth opportunities. ACM will also continue to grow and improve its profitability in FY27. It provides a positive differentiation to our market competitors and a competitive advantage. Future dividends are expected with the initiation of our dividend program for the first time since 2019. For FY27 financial year, We expect further growth with a normalised pre-AASB 16 to be in the range of $75 to $80 million subject to ordinary business trading conditions. Dom and I will now address any questions that you may have. Please note that you may submit your questions through the webcast facility.

Thank you. If you wish to ask a question via the phone, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box and click Submit. Your first question is a phone question from Jarrod Gelsomino with Morgans. Please go ahead.

Hi, guys. Congratulations on your point of growth next year. It looks quite positive. I'm probably just interested a little bit in terms of the change in stance on ACM. I mean, you've seemed to have stabilised our business and now... and very much speaking to it as an integral part of the group. Could you maybe just touch on that a little bit?

Thanks, Darren. Yeah, look, there's no doubt there is an evolution of how we're viewing that done in the last 12 months and we're definitely now in a position where the business is going well and we see plenty of opportunity going forward. Obviously, go back 18 months when there was a lot of things happening, there was Business was in a different position and we had a bunch of priorities and there was some concern about what we could do collectively or holistically across it. And the reality is I've been able to work really well with the team. We've got some very good people and we've made a lot of changes and it's coming along well. And that's now forming a very important part of what we're doing with positive contributions consistently. Certainly see a bit more of a runway for those earnings or the quality of those earnings to continue to improve. as well as the continual growth. So, yeah, it's not really for sale anymore, and it's definitely helping amongst our overall service offering. And when you're a company of our size and scale, an integrated supply company working properly is actually a strong advantage. It wasn't working properly, but it now is.

Yeah, no, that's clear. And can I maybe just show one or two more? Just on the collision business and trying to understand the composition of that second half, I mean, I understand it's typically a seasonally stronger fourth quarter and you did have good growth on the PCP, but I guess it probably does seem to be a little bit impacted by maybe some consumer pressures through that fourth quarter. Could you maybe just speak to collision in the fourth quarter and I guess whether that pressure maybe is localised in specific regions such as Victoria and sort of how that group performs?

We look at collision holistically. We've made good progress, but there's no hiding the fact we've still got a fair bit of work to do. There's been a lot of transformational activity, and we really embarked on a bit of a change program from around December this year in getting that embedded and everything working properly. We're still on the journey to how underlying volumes in this last quarter have been uttered. There's no two ways about it. We would normally see volume improvement generally in quarter four. It's a busy time now. The general economic factors, cost of living, interest rates, a range of things. We didn't see a significant downturn from where the volumes have been, but they certainly didn't increase like we generally see them do. So, again, we were hoping for more volume always makes things a bit easier. The volume wasn't everywhere that we would expect it to be, in some cases now a bit. So, It's tracking well. We've still got a lot of work to do in getting the footprint right, the processes right for everything. We've got some parts of the network working really well. We've got some parts of the network we're still working through. So I suppose in an overall, the progress is a little bit slower than what I would have liked or what I anticipated in terms of the full year. and understanding where we are in the journey and the job. There's lots happening with people, lots of positive things. It's a combination of available work and available capability and available capacity. So all of those things are being worked on together. And as I say, it is going well, but it's not just the volumes more volume always helps. We can't ever get away from that. The volumes aren't disastrous. They just didn't kick up like we expect they normally do. And the kick up is not significant, but it generally is higher through that last quarter.

Yeah, that makes sense. And so just last one, just on the collision network, I mean, you're still sort of essentially rationalising the size and you're still obviously looking through that broader optimisation piece, but I guess to try and understand how much further network rationalisation would be expected before it's probably considered stabilised and you can maybe look to start rolling out some net new sites year on year?

Yeah, look, I'm not completely clear on the timing of what's left to go. I mean, we've got key plans. The reality is the dynamic of the market continues to move a little bit. So some of those are based around things that you don't have complete view of. in terms of areas and PMAs and particular market shares. Right now, we're seeing demand in Queensland is very good. Demand in Western Australia is very good. Demand in South Australia is stable. New South Wales, in our collision network, we're not significantly represented, but we do have a number of sites. Victoria is difficult and we may still need to do a little bit more in Victoria because we have a very significant footprint in Victoria and we've got some other areas so there's a few more planned for the moment and that's more about again rationalisation and then in other areas we do need to expand so there's always work to do on it I wouldn't say that it's ever going to be done but you're always there's less to fine tune so There's probably two or three more key areas and then just continual fine-tuning going forward.

Yeah, perfect. That's clear. Thanks, guys.

Thank you. Your next question is from Chris Savage with Bell Potter. Please go ahead.

Thank you. Hey, Ray. Hey, Dom. Thanks for taking my questions. Just to follow on on the volumes, How are they tracking so far on Q1? That's also obviously another typical strong quarter for you.

Yeah, they're going okay. They haven't gotten any worse, but they haven't gotten a lot better either. So they're remaining fairly consistent through what we saw in May and June, really. So where they didn't uptick in some times, we don't have as much uptick in this first quarter, but they're generally strong. They're holding fairly consistently. There are some green shoots. There are some areas, as I say, we've got parts of the country that is very high demand. And look, with the delay in... We're seeing some consumers, and I wouldn't say it's systemic everywhere, but there is... People are delaying minor repairs. They're delaying minor spend. So there is a skew. Our severity rate is going up. Our average repair price is going up. and we certainly in collision are seeing a skewed of more non-drivable work than in the mix of what we would normally do. There are some opportunities, they're not getting any worse, they're not getting significantly better, so we're seeing fairly stable.

Thanks for that, Ray. So when you say the guidance is subject to ordinary business trading conditions, are you assuming an uplift in the average from, what was it, 4.7, 4.7 in FY26, or are you assuming fairly flat average repair volumes?

We're not assuming significant uplift in volume in those numbers. We're just hoping that the world settles down and doesn't get much worse.

Sure. Thanks. And just lastly, like, You've reinstated or restarted the dividends. You've got an active buyback. Where's the priority between those two and then also potentially M&A as well?

Look, I think we're in a very good position. I mean, someone used the word to me the other day, bulletproof in balance sheet. I thought that was a little bit optimistic, but we have a very strong balance sheet. From a priority point of view, I think it's important and the board's taking a very balanced view we believe we're undervalued and we will utilise the share buyback program if it's appropriate or if the share price remains as subdued as it is. We felt it was important to reinstate the dividend plan. It's been a long time since we've been in an MPAT situation and paying dividends again for the first time. A long and supportive share group and to be able to give them something back was important to us and an important show the robustness in where we are. But growth is also important as well. I still have a good opportunity and we've got a bit of work to do in our organic growth, but that still requires some expenditure to unlock it. But as we move through that and I look further forward, we will definitely be back in a more active inorganic growth capacity, I think, as we move through this year.

Good one. Thanks, Ray.

Thank you. Your next question comes from Warren Jeffries with Canaccord. Please go ahead.

G'day guys, well done. Just a quick one, just on the CapEx Dom, so $35 million into 27 and then Does it moderate over 28 or do you sort of step straight down to that sort of 12.5 to 15? I think it might.

I think at the moment it does move. It depends as race is. It depends on how things move. But I would say it starts to moderate during F528 before settling in F529.

Righto. So 12.5 to 15 to 29 sort of...

It's a regular maintenance case. Yeah. And then... And that works in better and better shape. There was lots of things... We've still got a bit of work to do in areas, but it's... It's not a mountain like it was.

And most of that thing has been directed towards capital smart? Is that right?

It's a bit of both. We spend a bit of money on a range of things, but it's where we're getting the most payoffs. So that's where we always prioritize based on outcome. And we certainly regulate our capital expenditure based on what's going on in the world as well. So we don't just roll out a locked-in plan. but I'm very focused on investing it where I know it's going to give us the best benefit.

And that corporate overhead, does that sort of bounce around quarter to quarter but is it settling around that $10 to $11 million per annum?

I actually guided in the presentation, we think it'll be around $12 to $13 because the LTI expense will come up a little bit in the next financial year. So that $12 to $13 is what I think is an appropriate number.

Thanks, Tom. Pleasure.

Thank you. Once again, if you wish to ask a question via the webcast, please type your question into the Ask a Question box and click Submit. Your next question is a webcast question from Yarin Shamgar, who asks, are there any debt facility restrictions that impact on Quantum of buying back shares or paying out dividends?

Yarin, yeah, there is. There's a restriction up to impact. It's something that we're looking at, and when I talk to the banks towards the end of this calendar year, it will be something I'll have a chat with them, but at the moment there's a restriction to impact.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Smith-Roberts for closing remarks.

Thank you, everyone. That's all fairly easy on us today. Appreciate you taking the time to listen. We'll obviously have a number of one-on-one meetings and broader group meetings over the following week. But look, the team have done a very good job. We're always working to improve more. I would like to have always wanted to achieve more, but I think we've got a very firm foundation. I'm very focused and very pleased with the road ahead. I like to look at where we are. It's been a lot of work to get to here, but I'm excited about where we're going. I think the broad value chain that we're developing in the business, gives us a very key competitive advantage going forward. Our mechanical and ADAS business has moved ahead in strides. Our parts business is moving ahead. That, combined with our core repair capability, is giving us a very significant opportunity to talk to our key customers about diversity of services and products and ways to solve their problems that we've never been able to do properly before. And living this together, we do it right-bodied and really will or value, should I say, and really being able to look across the group and how do we solve solutions and provide opportunities that we haven't been able to do before puts me in a very positive mindset about what the future's looking like. So, appreciate your time, appreciate your support, look forward to talking with many of you further and thanks to all of our people that have made this possible.

That does conclude our conference for today. Thank you for participating. You may now disconnect.