AMA Group’s announcement came just after the Australian Taxation Office (ATO) stymied plans by the listed repair company to sell its smash repair businesses to Blackstone, the parent of giant US car repair business Service King.
That deal, which collapsed after the ATO objected to a capital gains tax issue, would have been worth about $508 million to AMA.
During the year, AMA boosted its smash outlets to 114 shops and took over – and delisted – compatible company Automotive Solutions Group Ltd, putting its six businesses into separate entities.
It also added body-building firm CSM Service Bodies in December and in the month of June alone, it contributed $1 million to AMA’s earnings.
AMA operates under names including Gemini, GoRapid, RPM, Micra and Mr Gloss for smash outlets, and in manufacturing and distribution of parts, known by the names Deering Autronics, FluidDrive, ECB and Alanco.
AMA panel division CEO Andrew Hopkins said after discussions with its insurer partners, it opened six greenfield sites in the 2018 year and is now poised to open another this year in New Zealand.
“We will continue to add sites, both through acquisition and greenfield development, over the year ahead to meet the rapidly growing demand for our services,” he said.
The panel division – Australia’s biggest – contributed 85 per cent of AMA’s revenue, down slightly on the 86.3 per cent share in the previous financial year.
AMA said the Australian smash repair market was expected to follow the trend of the US where it said small panel shops had reduced by about 26 per cent over the past decade.
In the same period, AMA reported to its shareholders and the Australian Securities Exchange that the larger multi-store owners (MSOs) in the US had lifted revenue to 28 per cent from nine per cent “whilst small operators has fallen from 91 per cent to 72 per cent”.
“Australian MSOs have increased market share to about 15 per cent as of the 2018 financial year,” it said.
“Growth in the market share is expected to continue and is forecast to reach 31 per cent by 2021 financial year.
“There is an opportunity for AMA Group to capture a significantly larger share of the panel repair market.”
The AMA Group said the reason for the optimistic outlook was due to the fragmented state of the Australian repair market that allows larger operators to have higher revenues with lower costs.
“The insurance industry is shifting support towards larger players by increasing the allocation of repair claims to multi-shop owners,” it said.
AMA’s ACAD division – which groups the non-smash repair businesses including manufacturing, distribution and performance services and products – had revenue of $70.78 million in the 2018 financial year, up 27 per cent on the previous year.
The division, which includes the six assets from Automotive Solutions Group (two additional assets were disposed in addition to the closure of its head office), focuses on the 4WD, SUV and commercial vehicle segments.
AMA said that ACAD had “significant future earnings upside” for the current and next financial years “with further strategic acquisition opportunities”.
By Neil Dowling