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- AMA Group (AMA) slips in trade after deepening its annual loss over the 2021 financial year
- While revenue and earnings increased over the 2021 financial year, AMA’s loss after tax deepened by 38.6 per cent to roughly $99.1 million
- The company says COVID-19 restrictions and a major non-cash impairment relating to its Capital SMART purchase in 2019 drove the loss
- Looking ahead, the company says its business environment still faces challenges and disruptions because of the ongoing impact of COVID-19
- Shares in AMA Group are down 4.69 per cent and trading at 48.5 cents each at 3:20 pm AEST
Car repairs specialist AMA Group (AMA) has slipped in trade today after deepening its annual loss over the 2021 financial year.
The company released its annual financial report this morning, highlighting a loss after tax for the 2021 financial year of almost $99.1 million — roughly 38.6 per cent deeper than the 2020 financial year’s loss of $71.47 million.
The loss comes despite an 11.5 per cent increase in total revenue to just under $920 million.
What’s more, AMA’s normalised earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $71.55 million in FY21 — 34.6 per cent higher than the year before.
What caused the heavier loss?
As can be expected, AMA said the COVID-19 pandemic brought about some challenging conditions for the business.
While stay-at-home orders and other restrictions saw business soar in some sectors, AMA said fewer cars on the roads meant a decrease in repair volumes.
With Victoria in lockdown for most of the first quarter of the year and snap lockdowns popping up around the country in the months thereafter, AMA said it had to temporarily stand down some staff members and “hibernate” some of the most impacted sites.
The biggest blow to annual profit, however, came from a $90-million non-cash impairment of goodwill relating to the company’s 2019 purchase of Suncorp’s Capital SMART business.
Nevertheless, AMA said it was still able to reduce its net debt by $53.8 million thanks to the sale of its ACAD and Fully Equipped businesses. The company ended the 2021 financial year with $173.3 million in net debt and $57.7 million in undrawn debt facilities.
What’s next?
Looking ahead, AMA said its business environment was still plagued with challenges and disruptions because of the ongoing impact of COVID-19.
Particularly in light of the recent string of outbreaks across the country, AMA said its volume rates continued to experience variability depending on the level of restrictions in each state.
The company said it would keep working to mitigate the impacts of COVID-19 restrictions, which would primarily affect repair volumes and supply chain inputs. However AMA did not offer any profit or earnings guidance for the 2022 financial year.
AMA shares were down 4.69 per cent and trading at 48.5 cents each at 3:20 pm AEST.
