Thorney Opportunites Update Excerpt

For AMA investors who have been questioning their investment thesis with regards to AMA recently, might be worth having a read of the below excerpt from TOP Chairman Alex Waislitz. For those not in the know, AMA is one of TOP's major holdings and Waislitz is one of the shrewdest fund managers and investors in the country. That said, these guys still get it wrong sometimes, but will likely have much better access to the inside workings of a business than you or I:

22nd June 2017

"Two other TOP portfolio companies which have seen takeover activity since I last wrote to you are AMA Group (AMA) and Service Stream (SSM). Of course in both cases the companies were the acquirer rather than the target.

AMA Group Limited: on May 23, AMA launched a takeover bid for the Automotive Solutions Ltd (4WD) after having built a substantial stake in the company. While the target company initially rejected AMA’s offer we believe AMA’s bid still has a good chance of being successful. The move demonstrates our view that further consolidation in both the automotive panel repair and auto aftercare accessory markets exists and that AMA is extremely well positioned to take advantage of those opportunities and continue its strong growth path.

AMA's half year profit results were solid, and it has reconfirmed its full year profit guidance of at least $40m EBITDA. With its consistent cash flows and existing debt facilities, we believe it will be able to complete this latest acquisition without raising any further equity. The move will be value accretive for shareholders with some analysts estimating it will add at least 7% to AMA's profits.