AMA overview in my opinion

Looking at that the collisionbusiness it is really not doing great at all. Less than 1% EBIT is no good.

Collision division has revenue of $764,461,000 which is 87.9% of the full group to deliver a Pre-AASB 16 EBITDA of $7,581,000 is .99%.

Thank god the heavy vehicledivision is running well with a good EBIT margin. Revenue of $65,395,000 which is 7.5% of the group to deliver a Pre-AASB 16 EBITDA of $20,748,000 at 31.73%. This division has larger barriers to entry and insurers are less able to dictate terms like the collision division face.

Combined those 2 divisions have a Pre-AASB 16 EBITDA of $28,329,000. I will assume a ratio of 4 then the heavy division has a sale value of $82 mil and the collision is $30 mil.

They have pre raising Net finance costs of -$37,431,000 which is -4.30%of revenue.

It isn’t even about that theypaid too much for Capital Smart anymore, its about the profit isn’t right. Isit that their revenue per job is too low? Is it just that their costs are toohigh?

The insurers have got this company into a cliffing position in some ways as they dictate the terms to a large degree so its accept the price or you get nothing.

IAG have pretty much rolled out their own repair network and use AMA and other shops to fill in the supply constraints they have so IAG are just using smash repair shops till they get a complete network in place. Other insurers need a large repair network but there are some other groups like AMA that are setting up locations, they too will be cliffed at some stage.

There are some shops within theAMA group that would be doing well so there must be a lot that are in need some serious resuscitation.

Problem is that they can’t sellthe truck division as that is the golden goose and to sell off good performingshops is going to make it worse. They need to get rid of the bad shops, how? Toclose will hit them with ongoing costs for leases so that will be a tough one,hopefully a lot of leases are about to end but then they have site clean upcosts to deal with. They could try and sell the non performers I guess.

The new CEO sure has somethingchallenging to deal with.