ANNUAL
FINANCIAL
REPORT
For the Year Ended
30 June 2023
AMA Group Limited ABN 50 113 883 560
Enduring Mobility:
Our vision for our customers, our people,
our industry, and our shareholders.
Contents
BUSINESS REVIEW
About this report
FY23 highlights
Our people
Letter from the CEO
Who is AMA Group?
Our business
ENVIRONMENT, SOCIAL AND GOVERNANCE REPORT
Environment
Social
Governance
DIRECTORS’ REPORT
Introduction
Review and results of operations
Directors and Officers
Annual statement by the People Committee Chair
Remuneration report
Other items
Auditor’s independence declaration
FINANCIAL REPORT
Consolidated financial statements
Notes to the consolidated financial statements
Directors’ declaration
Independent Auditor’s report
SHAREHOLDER INFORMATION
Additional information
Glossary
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6
8
10
12
21
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51
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102
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About this report
The FY23 Annual Report is a consolidated summary of
AMA Group's operations, performance, and financial
position for the year ended 30 June 2023. In this report,
unless otherwise stated, references to ‘AMA’, ‘Group’,
‘company’, ‘parent entity’, ‘we’, ‘us’ and ‘our’ refer to
AMA Group Limited and its controlled entities (refer to
Note E2 for a list of controlled entities).
References in this report to a ‘year’ relate to the financial
year ended 30 June 2023. All dollar figures are expressed
in Australian dollars (AUD) unless otherwise stated.
The consolidated financial statements included in this
report were authorised for issue by the Directors on
7 September 2023. The Directors have the power to amend
and reissue the Financial Statements.
All financial reports and other information are available at
our Investor Centre on our website amagroupltd.com
Reporting suite
This annual report forms part of our annual reporting
suite, which is available on our website amagroupltd.com.
In addition to this annual report, the other documents that
form part of the reporting suite are:
■ Appendix 4E
■ FY23 Results Presentation
■ Corporate Governance Statement
■ Modern Slavery Statement
AMA Group acknowledges Aboriginal and Torres Strait
Islander peoples, the Traditional Owners of the lands and
waters of Australia on which we live and work, and pay our
respects to their Elders past and present.
3
Annual Report | 30 June 2023 FY23 highlights
Cash on hand
Group revenue
$29m
following positive
operating cash flow in 2H
$870m
▲▲ 2.9% on pcp
Net debt
$187m
Normalised Group EBITDA 1
(post-AASB 16)
$65m
▲▲ $43m on pcp
Regular price discussions
to seek compensation for inflation
Capital S.M.A.R.T interim pricing
from October 2022
New AMA Collision site opened
in Queensland
ACM Parts reset completed
Network and organisational
optimisation undertaken
1 Normalised EBITDA is Earnings before interest, tax, depreciation, amortisation,
impairment and fair value adjustments on contingent vendor consideration,
excluding the impact of normalisations as identified on page 29.
4
AMA Group
Group safety rating (LTIFR)
2.07
47.7% improvement on pcp
Average repair days
(Capital S.M.A.R.T)
Average repair days
(AMA Collision)
Average repair days
(Heavy Motor)
6.1
▲▲ 6.9% on pcp
12.8
▲▲ 28.0% on pcp
15.3
▲▲ 35.3% on pcp
Rectification
(Capital S.M.A.R.T)
1.9%
▼▼ (0.3)% on pcp
Rectification
(AMA Collision)
1.7%
▼▼ (1.6)% on pcp
Rectification
(Heavy Motor)
0.5%
▲▲ 0.2% on pcp
Customer satisfaction
(Capital S.M.A.R.T)
Customer satisfaction
(AMA Collision)
Customer satisfaction
(Heavy Motor)
8.4/10
▼▼ (0.2) on pcp
9.4/10
▲▲ 0.1 on pcp
9.2/10
▼▼ (0.5) on pcp
Customer satisfaction
(Supply)
41NPS
▲▲ 9 on pcp
5
Annual Report | 30 June 2023
Our people
Improved employee satisfaction
Inaugural AMA Group Awards
presented
Team members
3,284
Frontline Leadership
Program continued
New talent acquisition
platform launched
Online training modules extended
124 international recruitment offers
6
Apprentices
373
Frontline leaders
through course
79
Improved employee satisfaction
Inaugural AMA Group Awards
presented
Frontline Leadership
Program continued
New talent acquisition
platform launched
Online training modules extended
124 international recruitment offers
“I have been employed for over three years now, and I could
have never imagined I would feel so secure and be so
happy to work for the AMA Group. During my time with
the company, I have had my ups and downs. The main
connection I have is with Martin Dickinson who has always
helped me through the hard times and continues to give
his time to support me.
“I feel so proud to work with AMA Group. To lead my Far
North Queensland team is an honour as I am rewarded
with One AMAzing team, the way we engage together
as a team and within the community is unique. We are
spread over 1700kms, yet we work as one team sharing
our challenges day to day and help guide each other
through them.
During the year, I was very lucky to be nominated in both
The National Collision Repairer and Paint and Panel awards
where I managed to win both, this has given me such more
passion for my work. To have such a supportive workplace
I feel would be rare and it is something I will be forever
thankful for. These awards allowed me to achieve more
than I ever expected. I know only a few get a chance to
achieve this. It has made myself and my family very proud.
I was so happy that AMA Group invited my Mother to attend
the awards in Melbourne as well. Not only I was looked after
and given a spruce up, but my Mother was also well looked
after and I was so appreciative of this. Thank you!
I am a confident person but going to the awards did make
me a little nervous, I soon overcame this and was happy to
express my thoughts and story to what I have achieved in
life and AMA. To be at the awards and achieve as made
me more eager to achieve more.
My future goal from here is do well in my job, finish my
apprenticeship, and own my own place to live and have a
family. I hope to inspire others and maybe one day I can
become a manager or leader to pass on my experiences.”
Eli Taylor – Apprentice Panel Beater,
Gemini Townsville
We are heavily involved within the community with
standouts being our support of the NRL Cowboys house
with donations and our partnership with the House,
which has also lead to them achieving their own driving
license program. The highlight for me this year was taking
part in the Government Driving Deterring Program held
at Alexanders for kids at risk of going down the wrong
path. To see their faces light up gives a feeling like no
other - pure goosebumps.
The way AMA Group supports Far North Queensland's
passion for community speaks volume of who we are as
a company, and I am truly thankful. I am a very proud
worker of AMA Group.”
Martin Dickinson,
Area Manager – North Queensland
7
Annual Report | 30 June 2023 Letter from the CEO
On behalf of the Board, I present AMA Group Limited’s
Annual Report for the year ended 30 June 2023 (FY23).
Introduction
FY23 was expected to be a transition year, with several
operational initiatives undertaken during the period.
FY23 was characterised by strong repair volume demand,
adversely impacted by industry-wide labour constraint
related throughput challenges. In 2H23, industry
participants sought to fill vacancies from a limited
labour pool, which led to elevated lateral hiring activity
and contributed to higher employee costs per hour and
operational disruption.
Whilst we led the market in achieving pricing increases with
many of our insurance customers, many industry contracts
still do not contain appropriate dynamic adjustment
mechanisms to insulate parties from external pressures
such as inflation or increasing repair severity. This remains a
key characteristic of the current operating environment.
These factors, combined with the supply strategy
progressing slower than anticipated, meant the Group
did not achieve our original guidance, but delivered a
normalised post-AASB 16 EBITDA (earnings before interest,
tax, depreciation, and amortisation) result slightly more
than the middle of the revised guidance provided in
April 2023. Further we delivered a $43.0 million increase
in normalised, post-AASB 16 EBITDA, thanks to the hard
work and dedication of our Teams across Australia and
New Zealand. With significant operational projects
executed, and more underway, we maintain confidence
in the long-term success of the Group.
FY23 Financial performance
AMA Group reported normalised post-AASB 16 EBITDA of
$64.6 million (up from $21.6 million in financial year ended
30 June 2022 (FY22)), and revenue and other income from
continuing operations of $869.6 million ($844.9 million in
FY22). The Group recorded a net loss after tax of $146.8 million
for FY23 (FY22 net loss after tax, $148 million). The FY23 net
loss after tax includes the impact of non-cash impairment
expenses of $116.8 million, including $57.7 million and $52.6
million in goodwill impairments related to Capital S.M.A.R.T
and AMA Collision, respectively.
The Group ended the FY23 year with $28.9 million in cash
and cash equivalents (ended FY22 with $52.2 million),
with operating cash inflows of $17.6 million for the year –
substantially improved from $28.2 million operating cash
outflows in FY22. This includes the positive impact of a $15.3
million tax refund and outflows of $5.8 million in make good
costs associated with closed sites and $3.7 million inventory
build in ACM Parts.
FY23 Operational achievements
In late FY22, the Group commenced pricing negotiations
across its customer portfolio, as the Group looked to offset
the impact of stagnant pricing in an operating environment
characterised by high inflation and increasing repair severity
(increasing complexity, resulting in higher cost and labour
demands on repairs). These negotiations resulted in higher
pricing. However, as anticipated, during this transition we
experienced short-to-medium-term volume disruptions.
Since these negotiations, an increasing amount of the
reduced volumes experienced have been successfully
sold to other work providers. These activities are reflected
in improved earnings despite lower repair volumes and
provide a pathway to longer-term improved pricing
outcomes. Further, the Group subsequently reengaged
with some insurer partners with whom an agreement had
not been reached during the initial pricing negotiations.
Throughout the financial year, the Group undertook
network optimisation activities, to consolidate our high-
quality Team member pool into fewer facilities with more
profitable work. Further, we undertook a program of
organisational optimisation to ensure a fit-for-purpose
organisational structure and reduce indirect expenses.
As the Group sought to attract, train, and retain its
Team members, we continued to invest in our people.
The Group rolled out the Take the LEAD Health, Safety
and Environment program, offered first aid training, and
achieved a record low LTIFR of 2.07. As at 30 June 2023,
the Group had 373 apprentices in our industry-leading
apprentice program, and throughout FY23, welcomed 83
skilled migrants. The Group also increased the number of
I-CAR Gold accredited sites from one to nine throughout
the year, welcomed 79 participants to the Group’s Frontline
Leaders Course, and introduced the AMA Group Awards.
Pleasingly, we have seen a significant improvement in
Team member satisfaction, evident in engagement
surveys conducted approximately 12 months apart.
Increasing parts disintermediation is a core element of
the Group’s long-term strategy, already contributing to
improved profitability for the Group. During the year,
ACM Parts commenced operations out of its new
warehouse facility in Hemmant, completing its east coast
supply network. This facility is significantly larger than the
previous Queensland warehouse and enables the ongoing
execution of the Group’s supply strategy. The parallel
imports program achieved record performance throughout
the year. ACM’s aftermarket parts program experienced
some delays, however, ACM completed quality assurance
on key parts, with the new range ordered in late FY23 ready
for the launch of the expanded range in August 2023.
During FY23, the Group completed the conversion of the
existing ACM Parts site at Arundel, Queensland into a
class-leading repair facility, combining three existing sites
into one facility, featuring updated technologies, facilities,
and customer experience. This new facility showcases the
new AMA Collision branding. The Group also significantly
progressed the new Heavy Motor site in South Australia,
which see the relocation and rebranding of All Transport
Heavy Motor in Regency Park to Wales Kilburn.
Board and Management changes
We have recently announced some changes to the Board
and Management. Following an incredibly challenging
few years for both the collision repair industry and
AMA Group, in which we have seen the Group undertake
huge transformation, the timing is right for new leadership
to realise the potential of the group and capitalise on
the strong foundations laid over recent years.
8
Along with the FY23 results, the Group has launched
a capital raising, comprised of a fully underwritten
Institutional Placement and a fully underwritten
accelerated renounceable entitlement offer. The capital
raising will strengthen AMA Group's Balance Sheet,
facilitating the principal repayment of $35 million of
existing senior bank debt by 31 December 2023; providing
liquidity and working capital, which will be deployed in
pursuit of the Group’s stated strategy and supporting the
execution of refinancing of residual debt facilities through
FY24. Refer to the FY23 Annual Results Presentation and
Equity Raising presentation for more information.
Close
With approximately 3,300 employees across over 140
locations, AMA Group is the leader in the Australian and
New Zealand collision repair industry, supported by
Australia’s leading distributor of vehicle parts.
Our workforce comprises highly skilled professionals and
operating technicians who drive the Group’s performance
outcomes and achievement of the Group’s strategic goals
to deliver shareholder value.
We thank all our employees for their ongoing commitment
and hard work. We also thank the Board, our customers,
insurance partners, investors, and all stakeholders for their
ongoing support of AMA Group.
In FY24 we are focused on continuing to execute our
strategic priorities, caring for the health and safety of our
Team, and delivering shareholder value.
Carl Bizon
Executive Director
& Group Chief Executive Officer
Anthony Day has therefore retired as Chair and
Non-Executive Director of AMA Group, and Paul Ruiz
has retired as Chair of the Audit and Risk Committee
and Non-Executive Director, effective 1 September 2023.
I will retire as Executive Director and Chief Executive Officer
(CEO) at the Group's 2023 Annual General Meeting (AGM)
on 23 November 2023.
Effective 1 September 2023, current Non-Executive Director,
Caroline Waldron, has stepped into the role of Chairperson
for the Group. Current AMA Group Independent
Non-Executive Director, Talbot Babineau has been
appointed Deputy Chair and Simon Moore has become
Chair of the Audit and Risk Committee. Kyle Loades is
continuing in his role as Chair of the People Committee.
The Board will review its composition and skills before
commencing Non-Executive Director recruitment,
to ensure a fit-for-purpose Board which will support the
Group as it pursues the opportunities that lie ahead.
The Board will undertake a formal search process for
the CEO role, with both internal and external candidates
considered and will update the market in due course.
Outlook
Having reset commercial and operational fundamentals,
AMA Group is preparing for profitable growth in line with
the company’s strategic objectives and has observed
strong trading results from May to August 2023,
providing confidence in Financial Year ending
30 June 2024 (FY24) guidance.
■ Significant improvement through FY23 transition year,
with momentum leading into FY24
■ Growing our workforce in this continued labour
constrained environment both domestically
and internationally
■ Pricing must remain a focus with ongoing inflation
and severity changes needing to be recovered
■ Capital S.M.A.R.T reset through commercial price reset
and operational initiatives will improve both customer
and profit outcomes
■ Continue expansion of ACM Parts’ strategy with
aftermarket focus
■ Conservative approach to cash management with
tight controls on discretionary and capital expenditure
■ Growth in core repair activity maximising existing
infrastructure and expanding where appropriate
■ Refinancing of residual debt facilities through
FY24 a priority
■ FY24 normalised post-AASB 16 EBITDA guidance
$86 – 96 million
9
Annual Report | 30 June 2023 Who is AMA Group?
We are the leader in the
Australian and New Zealand
collision repair industry.
Founded in 2005 as Allomak Ltd, to acquire
automotive aftercare businesses, the Group
was listed on the Australian Securities
Exchange in 2006. In 2007, we acquired our
first collision repair business, Mr Gloss in
Victoria, which the company still owns
and operates today.
In 2009, we became AMA Group. Since then,
through acquisition, AMA Group has become
the largest collision repair network across
Australia and New Zealand, supported by
Australia’s leading distributor of automotive
parts and consumables. We are Australia’s
only publicly listed dedicated collision repair
and automotive supply business.
Our people are the foundation of everything
we do. Our success is underpinned by
our Team of highly skilled and committed
technicians, customer service and support
staff who are driven to deliver for our
customers. Working together, we get more
than 300,000 people and businesses back
on the road every year.
Supply
Heavy
Motor
4 %
8 %
Revenue
$870m
12 months to
June 2023
8 8 %
Vehicle collision
(Capital S.M.A.R.T
& AMA Collision)
10
~3,300
Team
members
~260k
Vehicles
repaired
per year
~220k
Recycled & new
parts supplied
per year
~6.3k
Vehicles
reclaimed
per year
AMA Group Our Australian &
New Zealand
Network
140
Collision
repair sites
7
Supply
locations
1
Support
office
11
Annual Report | 30 June 2023 Our business
We are an integrated business that seeks to create value
for our stakeholders
Vehicle owners
Our Team
Investors & lenders
We keep vehicle owners
moving and extend the
life of their vehicles, while
delivering high quality
service and workmanship.
We support our Team
to develop enduring and
sustainable careers as
One AMA, and care for
their health and safety.
We are future focused,
embracing change
and adapting to meet
it, targeting sustained
growth for our investors
and lenders.
Customer partners
Collision repair industry
Communities
We contribute to the
broader Collision Repair
industry by training
‘more than our share’
and showing leadership
on key industry issues,
as well as improving
parts and consumables
supply options.
We build enduring and
sustainable partnerships
with the communities
where our people live and
work through grassroots
community engagement
and we protect the
local environment.
We develop enduring
relationship with our
customer partners -
such as insurers, brokers,
fleet operators, and
Government - through an
integrated national network
and provide certainty of
service, compliance
and governance.
Suppliers
We are a trusted partner
to our suppliers, building
enduring, collaborative
relationships.
12
Four business units & groupwide functions
Through four business units, our Team provides repairs for light to high-severity collisions –
on everything from small private vehicles and prestige cars to commercial trucks and buses.
Rapid repair specialists across Australia and New Zealand for cars that are still
drivable, using state-of-the-art technologies and innovative processes. Focused on
consistent, high-quality service with fast vehicle turnaround times.
Addressing higher severity collisions, where more complex repairs are required
using the latest training, methodologies, and technology to deliver a quality and
safe repair. The Collision business unit also incorporates specialist prestige repairers
for luxury car repairs.
Heavy vehicle repairers, specialising in trucks and buses. Combining specialist
expertise and ongoing investment in equipment, technology, and people to deliver
outstanding quality of repair and customer service to get our clients’ businesses
back on the road safely, faster.
Supply works in tandem with our other business units, providing essential support
in resourcing and distributing parts to our collision repair sites as well as the broader
collision repair and mechanical industries. Our Supply business unit is an integral
part of the collision repair supply chain, reclaiming end-of-life vehicles and delivering
parts back into the collision repair and mechanical industries as well as providing
alternative parts sourcing opportunities to the market. AMA Group's Supply business
operates primarily through ACM Parts, offering four product ranges: Genuine,
Reclaimed and Aftermarket parts, as well as Collision Repair Consumables.
13
Annual Report | 30 June 2023 Our vision and mission
Our vision
Enduring Mobility
Our mission
AMA Group extends the life of vehicles through
an integrated network of repairers, dismantlers, and
distributors so our customers can keep moving.
14
AMA Group
15
Annual Report | 30 June 2023 Our values
The way we run our business is underpinned
by the Group’s core value that
Together we do it right
16
AMA Group Care
One Team
Ownership
Resilience
Performance
We treat
everyone
with empathy
and respect
We are
One AMA,
working
together to a
common goal
We own our
decisions and
actions
We embrace
change and
adapt as
needed
We deliver
value through
performance,
innovation,
and quality
17
Annual Report | 30 June 2023 The road so far
2013
Acquired commercial
vehicle alloy bull-bar
specialist Custom Alloy.
2015
Acquired
Woods Auto Group
(including 14 GoRapid
repair sites, Victoria)
and Gemini Accident
Repairs (42 repair sites
across Australia and
New Zealand).
‘13
‘09
‘15
‘14
2014
Acquired Repair
Management
Australia
(4 sites in Victoria).
2009
Allomak Ltd changed
name to AMA Group Ltd.
2007
Acquired auto parts
distributor Alanco
Australia and our
first collision repair
business Mr Gloss.
2005
Allomak Ltd
established to
acquire automotive
aftercare businesses.
‘05
‘07
‘06
2006
Acquired auto protection
accessories company, ECB;
Allomak listed on ASX.
18
2021
Carl Bizon appointed Group Chief
Executive Officer (CEO); Acquired
Perth Parts Solutions (Western
Australia) and National Trucks
(New South Wales).
‘21
‘22
2019
Acquired
90% of Suncorp’s
Capital S.M.A.R.T,
100% of ACM Parts,
and 21 other collision
repair sites across
Australia (including
heavy motor).
2016
Acquired
6 more collision
repair sites
(3 in Victoria,
2 in Queensland,
1 in Western Australia).
‘16
‘19
‘20
2022
Divested
FluidDrive Holdings
‘18
2018
Acquired auto aftermarket
group Automotive
Solutions Group.
2020
Acquired Fully Equipped Group
(New Zealand), Western Trucks
(Victoria) and 9 other repair sites;
Disposed ACAD & Fully Equipped
to GUD Holdings.
19
Annual Report | 30 June 2023 Strategy
Strategic objectives
Great place
to work
Organic
growth
Acquisition
growth
Cash flow
generation
Margin
expansion
Strategic pillars – the three Ps
Partnerships
Production
Procurement
Focus areas
Reset the Base Business
Grow
Minimise Disruption
Groupwide procurement to
leverage benefits of scale
Grow
workforce
Disintermediation
of parts
Operational
improvements
Retention and
engagement
Revenue
diversification
Organic and
acquisition growth
Workforce
of the future
Contract pricing
Accelerate third-party parts
and consumables business
ADAS opportunities
20
Environment, Social
and Governance Report
AMA Group's vision is for Enduring Mobility.
This is reflected in three pillars: Sustainability,
Innovation, and Community.
At our core, AMA Group’s operations seek
to promote socially responsible outcomes in
an environmentally sustainable manner.
Through our collision repair, end-of-life vehicle
dismantling and parts distribution businesses,
we repair to extend vehicle life, reuse and
renew components, and reduce waste.
Through employment and training of our
culturally diverse, geographically dispersed
teams we promote economic advancement
in the communities in which we operate.
While we are at the early stages of our
environmental, social and governance (ESG)
program and reporting journey, our operations
already support positive environmental and
social outcomes as detailed later.
This report is organised in three sections:
> Environment
> Social
> Governance
21
Annual Report | 30 June 2023 Environment, Social and Governance Report
Environment
Extending the life of vehicles
~260k
Repairs completed
Through vehicle repair, AMA Group contributes to waste
reduction, as vehicles stay on the road longer instead of being
replaced. We contribute by extending the vehicle's useful life,
even after significant collision damage, through manufacturer
approved repair techniques.
AMA Group is committed to careful consideration and increase
in "repairing" instead of "replacing" a greater proportion of
components as part of its longer-term production systems.
A part repaired is a part that is not required to be produced.
Reclaiming and refurbishing parts from
end-of-life vehicles
At target based
on current
capacity and
target stock
Evolution over
time based
on demand
planning
~6.3k
Vehicles
dismantled
+20%
over FY23
Total number
of components
we reclaim and
refurbish from
a vehicle
Through our ACM Parts business, we are actively involved
in the return of components from end-of-life (written off)
vehicles to the collision and mechanical repair industries.
Key components reclaimed by ACM Parts in FY23 were
engines, transmissions, doors, panels, and headlamps.
The reclamation of components for sale back into collision
and mechanical repair lifecycles, and the refurbishment of
select parts, reduces waste directed to landfill and reduces the
demand for new parts production, indirectly saving materials
and energy used in the manufacturing process.
ACM Parts has increased the number of parts reclaimed from
end-of-life vehicles by over 20% over FY23 and will evolve this
over time in line with demand planning.
Our ACM Parts dismantling operations also include separation
of recyclable materials from true “scrap” in end-of-life vehicles,
and focuses on safe, environmentally conscious reclamation
and disposal of end-of-life vehicle products including fuel, oils,
coolant, batteries, and air conditioner gas.
During FY23, ACM Parts continued to build our parts
refurbishment program, where partially damaged parts are
returned to replacement quality condition for resale. This
program saw some 1,100 headlamps returned to the repair
process, which would otherwise have become waste product.
ACM also continued to ramp up the use of recycled returnable
packaging within its recycling and warehousing operations,
with over 3,000 parts packed in recycled returnable packaging
during FY23, in place of disposable packaging.
22
Supporting new technologies
AMA Group is committed to supporting new technologies
for the betterment of our environment, by ensuring
our network is equipped for the repair of these new
technologies. Electric vehicles currently account for a small,
but growing number of the total cars on Australian and
New Zealand roads. AMA Group’s Porsche, Mercedes-Benz
and Tesla accredited facilities, as well as our Eagle Farm
and new Arundel facility are equipped with electric vehicle
charging units. Our Porsche, Mercedes-Benz and Tesla
accredited repair facilities are all equipped with dedicated
electric vehicle isolation bays. Where approved by the OEM,
technicians at these sites have undertaken specialised
training for electric vehicle disconnection and reconnection
by our OEM partners. Further, AMA Group has been rolling
out electric vehicle awareness courses across the vehicle
collision repair business units.
We will continue to ensure our technicians and facilities
are equipped to support the ongoing evolution of cars
on Australian and New Zealand roads to increasingly
sustainable solutions and will continue to scale capacity
in our operations to meet demand.
Climate change and regulation
We recognise that climate change, and associated
policy changes and regulation will impact the Group.
While the underlying operations of the business will
continue to evolve to support the change in vehicle
technology, the Group also recognises that climate change,
policy and regulation poses a business risk. This is reflected
in the formal incorporation of climate risk in the Group’s risk
register. AMA Group has a commitment to further assess
climate risk and develop relevant action plans in the future.
Environment & Sustainability Policy
We are committed to meeting our high standard of
business excellence in an environmentally responsible
and sustainable way through a formalised Environment &
Sustainability Policy.
Environment, Social and Governance Report
Environment
Production environmental efficiency
Through production techniques and facilities-based
initiatives, AMA Group seeks to minimise the impact of our
operations on the environment. We have identified three
key areas of focus which we can influence, and which will
make a difference to our environmental impact.
■ Waste reduction and recycling: over 95% of sites
had some recycling in place as at 30 June 2023.
The Group plans to continue to develop its recycling
and measurement of waste program over time.
■ Energy reduction (LED lighting): as at 30 June 2023,
63 sites used only LED lighting. During the FY23 year,
the previous ACM Parts Arundel site was converted into
a collision repair facility, including LED lighting in the
factory and office spaces. We plan to continue to use
LED lighting where possible over time.
■ Green energy (solar): as at 30 June 2023, 17 sites
had solar panels at their facility. Due consideration
will be given to future leases and the availability of
sites with solar options.
Water-based paint
AMA Group, partnering with our paint supplier, uses
water-based paint technology throughout our vehicle
repair network. The water-based product releases less
organic solvents (<10%) into the atmosphere compared
to solvent-based paint, which is a significant environmental
benefit, as well as supporting the safety and wellbeing of
our employees.
The product also provides optimal colour accuracy and
ease of application, improving our efficiency, resulting
in less overall product needed per job whilst delivering
a high-end result.
Environmental compliance
AMA Group is dedicated to good corporate citizenship
and is committed to ensuring compliance with all statutory
and government requirements pertaining to environment
and sustainability.
In FY22, 30 sites were identified as targets for wash bay
upgrades, with 28 completed in FY22. In FY23, the two
sites remaining were upgraded, with no further upgrades
identified as being required at this time.
Environmental focus at site level in FY23 was to ensure
compliance with stormwater protection, reduce waste to
landfill and improve lighting in our Prestige sites for
better sustainability.
AMA Group had two unscheduled visits from EPA Victoria in
FY23, with both resulting in positive findings for initiatives in
place at each site. Chemical storage, stormwater protection,
recycling programs in place and use of Spill Kits by trained
team members, were some of the positive initiatives noted
by the inspectors. There were no improvement notices
issued to either site. Positive findings were shared across
AMA Group sites.
23
Annual Report | 30 June 2023 Environment, Social and Governance Report
Social
AMA Group’s Social strategy is founded on Community,
one of the three pillars of our vision of Enduring Mobility.
We are committed to helping communities be more
mobile, more resilient, and more sustainable.
When referring to community, we mean the communities
in which we operate, the communities we serve and the
community of people who make up the AMA Group Team.
Our Social Sustainability Strategy, while in its infancy,
is founded on four core pillars:
■ Reflecting the Community
■ Enhancing the Community
■ Protecting the Community
■ Supporting the Community
Reflecting the community
Diversity, equity, and inclusion
We are committed to building a diverse workforce that
recognises and embraces differences, and provides a safe,
respectful, and inclusive environment for all our people.
We recognise the benefits gained from having a
workforce that reflects the communities that we work
in, including attraction and retention of talent, improved
engagement, increased productivity and access to
broader perspectives and ideas.
AMA Group operates in a traditionally male-dominated
industry. We currently have 14% female participation across
the Group. AMA Group is focusing on building female
participation in the industry by identifying and promoting
female role models such as our 2023 Women in Collision
winners, Chloe Oldland and Kylie Clark.
AMA Group employs Team members who are skilled
migrants from countries including the Philippines, United
Kingdom, and South Africa, and we have partnerships to
better attract and include Indigenous staff and people
with disabilities.
We are an equal opportunity employer and are committed
to ensuring our processes and policies are inclusive for all,
regardless of age, religion, national origin, disability, sexual
orientation, or gender identity. This includes ensuring we
follow best practice recruitment processes which base key
selection criteria on experience, merit, and competency for
each role with a focus on gender equality.
Recruitment practices
AMA Group is continually reviewing and updating our
recruitment practices to attract a broader talent pool.
We also advertise in industry publications (print and online),
attended career expos, and expanded our employee
referral program in FY23.
We recognise that there are people from a wide variety of
backgrounds with the desire and talents to contribute to
our business. To that end, we have developed partnerships
with groups and industry bodies to attract candidates from
diverse backgrounds including people with disabilities,
those who are socially disadvantaged, Aboriginal and
Torres Strait Islander peoples and refugees.
During FY23, we worked with Westgate Community
Initiatives Group and the NRL Australia School to Work
program to facilitate opportunities across various groups
of prospective Team members.
Age diversity
Age diversity brings a wealth of experience and knowledge
and enables skills to be taught organically. Our experienced
tradespeople act as mentors to apprentices and new
Team members. Our Team members represent a wide
range of age groups with most being aged 20-49 years old.
4% are aged 15-19 years old and 25% over 50 years.
While apprentices are typically school leavers, 34% are
mature age i.e., over 25 years old.
Gender diversity
We are committed to improving the gender balance at
all levels of the organisation and particularly in traditionally
male-dominated roles. We will continue to review our
policies and practices to ensure these are inclusive.
There has been a continued focus on flexible rostering
and working arrangements at sites as a key part of
attracting greater diversity.
Of the AMA Group employees nominated for the
2023 Paint and Panel Women in Collision Awards, six
were named as finalists and two won their categories,
highlighting the important roles that women play in our
business and industry.
The following table represents the gender breakdown of
our workforce at 30 June 2023:
Level
Non-Executive Directors (Board)
Senior Executives 1
Other Levels
Total
Proportion of
women %
Proportion of
men %
17%
17%
14%
14%
83%
83%
86%
86%
1 Senior Executives are defined as the Group CEO and direct reports to the
Group CEO.
24
Environment, Social and Governance Report
Social
Enhancing the community
Workforce of the future
AMA Group is focused on building our future workforce
by growing our apprentice program, building leadership
capability, and ensuring our people are at the forefront
of their trade.
Frontline Leadership Training
The Frontline Leaders Program has been designed to
build leadership foundations and ensure that leaders
understand their responsibilities beyond the technical
aspects of their roles.
Apprentices
We are committed to developing the next generation of
tradespeople for our business and our industry. With 373
apprentices at 30 June 2023, and the industry and a plan to
continue to increase the number of apprentices throughout
the network in FY24, we are leading the Australian vehicle
collision repair industry in our apprentice program.
Skilled migration
Skilled Migration has been a high priority to address
local workforce shortages. Recruiting across eight
countries along with two bulk recruitment initiatives in
the Philippines has resulted in 124 offers and 83 arrivals
of skilled technicians in FY23. Delays in mandatory
government-managed skills assessments impacted the
arrival of international recruits under TSS 482 visa rules
but the Group’s use of the 400 short-term visa alternative
visas has somewhat alleviated the bottlenecks.
Leadership training
We will continue to build leadership capability across all
levels of the company. In FY23, the Group continued its
focus on frontline leadership development.
In addition to building leadership capability, participants are
able to develop their internal networks and leverage broad
experience and knowledge from across the organisation.
The Group delivered the program to 79 leaders in FY23,
and will continue to deliver the program to new leaders
and seek to extend the program for those who have
previously participated in FY24.
Technical training
We will continue to invest in technical skills training to
ensure our people remain future ready.
As our industry advances, so must our technical skills
and we continue to provide dedicated training to upskill
our workforce. Our tradespeople participate in a variety
of training delivered through I-CAR, OEM providers and
industry training alliance partners such as industry bodies,
BASF and Car-O-Liner. Training courses are conducted
online, virtually and face to face. We will continue to
expand the training offering across AMA Group.
During FY23, nine AMA Group sites achieved I-CAR Gold
status, with more significantly progressed. Prior to this,
only one site had achieved I-CAR Gold status.
25
Annual Report | 30 June 2023 Workplace health and safety
We take the health, safety and
environment of our Teams, our sites,
and the communities in which we
live and work very seriously.
As such, in FY22 we developed an
entire, bespoke, safety management
program from scratch; from incident
reporting (AMAlert) to high-risk
equipment maintenance, through
to first aid and safety warden
training. We are committed to
proactive safety awareness and
continuous improvement.
Take the LEAD is a behavioural
change program, specifically
designed by and for AMA Group.
The key focus of the program is to
empower all Team members to take
the lead on their health and safety.
The program aims to improve overall
safety culture from being reactive and
dependent, to independent where all
employees lead by example, lead with
care and lead by choice.
LEAD is an acronym for:
■ LOOK out for hazards and
unsafe practices to create a safe
working environment
■ ENGAGE with Team members so
everyone is aware of risks and can
recognise safe behaviours
■ ACT quickly to manage incidents
and injuries and
■ DEBRIEF and share learnings
from incidents by consulting
all Team members.
Monthly Take the LEAD campaigns
target key injury themes in the
form of educational toolbox talks.
Information is provided to every team
member on safe ways to complete
tasks, as well as the most appropriate
equipment and personal protective
equipment to be used. These targeted
campaigns have significantly reduced
the reoccurrence of trending themes
and have helped us reduce Lost Time
Injuries (LTIs) by 48% over the previous
12-month period. Proactive defect
reporting via QR Codes also ensures
that high risk equipment including
hoists, mobile plant and spray
booths remain in good condition,
reducing the risk of a serious event
from occurring.
Monthly checklists have been
developed for the seven highest
operational risks in AMA Group sites.
By completing the monthly checklists,
Team members can feel satisfied
that these higher-risk elements are
in a safe condition, without defects
or hazards. If a defect is noted while
completing a high-risk checklist,
team members can ACT and log
appropriate correct actions to ensure
rectification in a timely manner.
Sites all display Take the LEAD
safety boards that have important
information including the latest
monthly toolbox talks, safety alerts
and key safety contacts; first aiders,
wardens, and site safety ambassadors.
Responsible Repair
Standards – repairing to
manufacturer requirements
The design and construction of motor
vehicles is continually evolving, and
it is critical that all repairs are carried
out in accordance with the latest
applicable industry standards and
codes of practice to ensure the safety
of our Team and the vehicle owner.
Due to the complexity of different
types of substrates used in the
construction of vehicles, OEM repair
methods must be followed as the
vehicles are designed to react in a
specific way in an accident. Once
repaired, the vehicle must react
the same way if involved in another
accident. Even windscreens are part
of the overall makeup of the vehicle
strength. Further, the increasing
use of Automated Driver Assistance
Systems (ADAS) has added another
dimension to repair requirements.
Following repair methods and
standards take the guesswork out of
the repair process and ensures that
we return our vehicles in a safe,
pre-accident condition.
Following repair methods also ensures
the safety of our Team. For example,
disengagement / reengagement of
electric vehicles must be completed
by trained technicians before and
after repair, following specific steps.
Environment, Social and Governance Report
Social
Protecting the community
Employment standards
AMA Group is committed to
meeting employment standards
for our employees. We regularly
review our employer obligations
towards our employees.
Remuneration practices
We meet our employer obligations by:
■ providing fair remuneration for
employees' skills and experience
to ensure we attract and retain
talented team members. This is
reviewed upon commencement
of employment and through the
annual remuneration review across
the entire AMA Group
■ regularly reviewing remuneration
practices to ensure we meet our
obligations, including but not
limited to minimum wage, pay
equity and award compliance
reviews
■ upskilling and training our
people on employment standards
and obligations.
Remuneration equity
In FY23, AMA Group submitted
a group-combined report to the
Workplace Gender Equality Agency
(WGEA) with the People Committee
overseeing and reviewing the report
and its insights. The FY23 WGEA
report continues to provide the
opportunity to review and analyse
gender pay equity across the entire
Group with no significant gender
pay gaps identified.
We have continued to educate our
Talent Acquisition team and people
leaders on gender pay equity.
This, along with the AMA Way Code
of Conduct, people leader training
on Secure Jobs, Better Pay and
Respect@Work, sets AMA Group
up as an attractive employer for
women and for all team members.
Training
AMA Group has continued our focus
on training and developing our team
with initiatives including the launch
of our Frontline Leaders Program,
Lunch ‘n’ Learn sessions for people
leaders on a range of topics and
Mental Health First Aid Training.
26
Environment, Social and Governance Report
Social and Governance
Supporting the community
AMA Group Welfare Fund
Through the AMA Group Welfare Fund, we support the
welfare of our employees and their families. The Welfare
Fund delivers a tangible benefit to our employees who are
facing financial hardship or unforeseen circumstances.
Supported by employee and AMA Group contributions,
the Welfare Fund is accessible by all employees of the
Group and their families in emergencies such as, but not
limited to, natural disasters, medical emergencies, severe
illnesses, or death.
In FY23, the Fund continued to support our Team members
and their families through bereavement and illness.
Further, in FY23, sites participated in initiatives, such
as Joondalup Smash Repair who collected soft toys for
the Wheelchairs for Kids program in Western Australia,
AMA Group Heavy Motor contributed to the Movember
campaign, and Alexander Bodyworks was the first site to
support the Government’s Deterring Driver program for
at risk youth.
The Australian Collision Industry Alliance
We recognise that the collision repair industry needs to
stand together to ensure the longevity of the industry, by
becoming a founding member of the Australian Collision
Industry Alliance (The ACIA), whose purpose is to:
Sponsorships and partnerships
A key pillar in AMA Group’s vision is community. Our goal is
to be a positive force in every community in which our Team
lives and works, by helping those communities to be more
mobile, more resilient, and more sustainable. We want to
empower individuals and teams all over our network to give
back to their local communities. Our Team members will
identify local causes that are meaningful to them and will
play an active role in forging partnerships between those
causes and AMA Group.
While at an early stage in this journey, the Group has a
well-established partnership with the Cowboys Foundation
in Queensland, which embodies the spirit of grassroots
community partnerships we aim to replicate throughout.
This partnership includes a bursary, sponsorship of their
learning to drive program, volunteering at the 50-50 raffle
events, as well as providing employment opportunities
for students.
Governance
Governance
AMA Group’s governance framework plays an important
role in helping our business deliver on its strategy. AMA
Group’s governance framework, including our statement
of compliance with the 4th edition of the ASX Corporate
Governance Council’s Principles and Recommendations,
is detailed in our 2023 Corporate Governance Statement,
which is available on our website together with key
governance documents, including charters and policies.
Modern slavery
AMA Group’s Modern Slavery Statement details the policies
and practices in place to reduce the risk of modern slavery
and other unethical behaviour in both our operations and
supply chain. AMA Group respects ethical labour practices
and has a zero-tolerance for any form of human rights
abuses, including in our operations and supply chains.
■ Provide rewarding futures for people and
ensure sustainability of the motor vehicle collision
repair industry;
■ Reposition motor vehicle collision repair as an
attractive career choice and an industry of high
social and commercial value;
■ Coordinate motor vehicle collision repair industry
stakeholders to fund, innovate, develop and drive
programs to attract, train and retain people for
the industry; and
■ Increase the number, capability and longevity
of people entering the motor vehicle collision
repair industry.
Whistleblower
AMA Group recognises the importance of identifying
wrongdoing or conduct that is not consistent with the
Group’s corporate culture and values. Our Whistleblower
Policy encourages Directors, employees, contractors
and suppliers who have witnessed, or know about, any
misconduct or suspected misconduct to raise such matters
without fear of intimidation, disadvantage or reprisal.
The AMA Way
The AMA Way is AMA Group's Code of Conduct and
articulates the behaviours expected of our Directors and
Team Members. All Directors and employees are expected
to align their actions with our Code of Conduct and AMA
Group’s values whenever they are representing the Group.
27
Annual Report | 30 June 2023 Directors’
Report
Introduction
Your Directors present their report on the consolidated entity (referred to hereafter as the “Group”) consisting of AMA Group
Limited (“AMA Group” or the “Company”) and its controlled entities for the Financial Year (FY) ended 30 June 2023.
This Directors’ Report has been prepared in accordance with the requirements of Division 1 of Part 2M.3 of the
Corporations Act 2001.
Board of Directors
The Directors of AMA Group Limited during the year and up to the date of this report were (full financial year unless specified):
■ Caroline Waldron (Chair of the Board)
■ Carl Bizon (Chief Executive Officer)
■ Talbot Babineau (from 13 February 2023)
■ Kyle Loades
■ Simon Moore
■ Nicole Cook (until 24 November 2022)
■ Anthony Day (until 1 September 2023)
■ Paul Ruiz (until 1 September 2023)
Principal activities
The principal activities of the Group are the operation of vehicle and heavy motor collision repair facilities and the supply of
automotive parts and consumables.
28
Review and results of operations
The following table shows the year-on-year performance of the operating segments of the Group:
Revenue and other income
Pre-AASB 16 EBITDA 1,2
Segment ($'000)
Vehicle Collision Repairs
Heavy Motor
Supply
Corporate / Eliminations
Total Group
FY23
764,461
65,395
79,557
(39,813)
FY22
725,301
53,954
96,847
(31,173)
869,600
844,929
Change
39,160
11,441
(17,290)
(8,640)
24,671
Normalisations:
Closed and hibernated site costs (including $4.9m make good and lease
liability write-backs on impaired sites)
Restructuring costs
Legal costs on investigations and earn-outs
Normalised Pre-AASB 16 EBITDA (unaudited, non-IFRS term) 1
AASB 16 Leases impact to occupancy costs
Normalised Post-AASB 16 EBITDA (unaudited, non-IFRS term) 1
FY23
20,748
7,581
(2,213)
(7,381)
18,735
(993)
820
1,056
19,618
45,022
64,640
FY22
(25,001)
6,570
(3,182)
(10,334)
(31,947)
Change
45,749
1,011
969
2,953
50,682
1,938
(2,931)
-
836
(29,173)
50,800
21,627
820
220
48,791
(5,778)
43,013
1 Non-IFRS measures, including Normalised EBITDA, are financial measures used by management and the Directors as the primary measures of assessing the
financial performance of the Group and individual segments. The Directors also believe that these non-IFRS measures assist in providing additional meaningful
information for stakeholders and provide them with the ability to compare against prior periods in a consistent manner.
2 Refer to B1 Segment information for further information regarding pre-AASB 16 EBITDA. Normalisations are excluded from the Segment results.
Vehicle Collision Repairs – revenue increase of $39.2 million despite a 5% volume reduction. This revenue increase was as
a result of improved commercial pricing as well as the removal of COVID-19 restrictions that impacted the prior year results.
Costs were constrained as a number of sites were closed early in FY23 improving the overall utilisation of the Group.
Heavy Motor – 21% revenue increase and 15% EBITDA improvement as a result of pricing uplifts and higher direct headcount
driving repair volume and revenue growth across most sites. The closure of one loss making site in Victoria also contributed
to the positive result.
Supply – internal sales improved year on year, however the removal of whole vehicle sales and low margin brokered parts
sales resulted in a 18% revenue reduction for this segment. The disposal of the Fluid Drive business in December 2022
resulted in a $3.6 million reduction in revenue and an insignificant reduction in EBITDA. EBITDA was improved from prior
year as a result of removal of overheads associated with the discontinued brokered sales workstream as well as focussing
on higher margin part sales.
Corporate – corporate costs have reduced year on year as a result of a number of cost reduction initiatives. In addition, the
current year includes $2.1 million higher rebates.
Normalised EBITDA is used by the Group to define the underlying results, adjusted for abnormal and non-recurring costs
which are determined as not in the ordinary course of business.
29
Annual Report | 30 June 2023 Directors’ Report Financial results
The Group’s results for the year are as follows.
Revenue
Operating expenses
Fair value adjustments on contingent vendor consideration
Depreciation & amortisation
Impairment expense
Operating loss before interest and tax
Finance costs
Income tax benefit
Net loss after tax
FY23
$'000
869,600
(805,906)
654
(71,360)
(116,830)
(123,842)
FY22
$'000
844,929
(826,076)
13,729
(78,754)
(105,513)
(151,685)
(37,431)
14,467
(31,141)
34,818
(146,806)
(148,008)
Change
$'000
24,671
20,170
(13,075)
7,394
(11,317)
27,843
(6,290)
(20,351)
1,202
Revenue – Increased 3% for FY23 despite 5% lower repair volumes driven by network optimisation, partly offset by higher
volumes in Capital S.M.A.R.T business absent COVID related lockdowns in Victoria and New South Wales which impacted
FY22. Revenue increases largely the result of revised pricing arrangements with major insurers that took place during FY23.
Refer to note B2 for disaggregation of revenue and other income by reporting segment.
Operating expenses – The Group managed costs in a higher inflationary environment through rationalisation of sites
and more internal purchasing from ACM Parts. The Group finished FY23 with approximately 3,300 employees (FY22: 3,500)
following corporate restructuring as well as network optimisation. The Group continues to manage its operating expenses
by working continuously to identify costs savings.
Fair value adjustments on contingent vendor consideration – For the year ending 30 June 2023, the Group recognised an
$0.7 million gain on fair value adjustment on contingent vendor consideration (FY22: $13.7 million). FY23 was the finalisation
of all earn-outs for the Group.
Depreciation and amortisation – Depreciation of right-of-use assets represents 59% of the total depreciation and
amortisation expense. Amortisation of intangibles, specifically the customer contract between Capital S.M.A.R.T and
Suncorp represents 22% of the total depreciation and amortisation expense (see note B3(A)).
Impairment expense – FY23 impairment relates to Capital S.M.A.R.T and AMA Collision goodwill impairment arising from
updated forecast cashflow assumptions as well as site right of use and plant and equipment impairment associated with the
network optimisation program. FY22 impairment relates to impairment of goodwill of $80.7 million and right-of-use assets
and property, plant & equipment for sites that were closed during the year or expected to permanently close. Further details
of impairment expense is set out in note B3(C).
Finance costs – $19.0 million of finance costs relate to interest expense on lease liabilities (FY22: $18.3 million). Interest and
finance charges on the senior debt and convertible notes increased compared to the prior comparative period. The effective
interest rate on borrowings increased to 6.0% (FY22: 4.3%) as a result of the 1.5% margin increase in debt as well as the
increase in interest rates on the unhedged portion of debt. Fixed rate swaps on senior debt facilities were closed out for
$6.1 million cash in the current period, however the remaining hedge reserve will unwind over the remainder of the debt
term, reducing the future P&L impact of floating rates until the senior debt matures.
Income tax benefit – Income tax benefit represents approximately 30% of the loss before tax (after adjusting for impairment
of goodwill). In the prior year, the Group had several permanent differences and items which are not assessable or deductible,
including impairment expense and fair value adjustments on contingent vendor consideration.
The Group has revenue losses of $53.8 million and capital losses of $13.4 million.
Capital management
Cashflow and liquidity has been effectively managed across the business.
The Group paid earn-outs in respect of existing acquisitions totalling $2.0 million during FY23, with no earn-outs on foot at
30 June 2023.
The net debt calculation, which is presented consistently to the calculation requirements of the Group’s Syndicated Facility
Agreement is set out in the table below.
Net debt
Financial liabilities – drawn cash facilities
PIK interest 1
Cash and cash equivalents
Net Senior Debt
Contingent vendor consideration – 50% of cash portion
Net debt used in covenant calculations
1 PIK interest relates to a 1.5% margin which was capitalised into the loan balance during FY23.
30
Jun 2023
$'000
165,000
1,042
(28,874)
137,168
-
137,168
Jun 2022
$'000
165,000
-
(52,189)
112,811
1,220
114,031
Directors’ Report Directors interests
Directors’ interest in shares of AMA Group Limited as at the
date of this report are set out in the table below.
Director
Anthony Day
Simon Moore
Talbot Babineau
Carl Bizon
Paul Ruiz
Kyle Loades
Caroline Waldron
Ordinary Shares Number
704,797
41,655,153
8,038,124
842,858
660,810
420,019
100,000
Meetings of Directors
The number of meetings of the Company’s Board of
Directors and of each Board Committee held during the
year ended 30 June 2023, and the number of meetings
attended by each Director are as follows:
Board
meetings
Audit & Risk
Committee
meetings
People
Committee
meetings
A
20
20
4
15
20
20
20
20
B
20
20
4
15
20
20
20
20
A
5
5
-
-
-
5
-
5
B
5
5
-
-
-
5
-
5
A
4
-
3
1
-
-
4
-
B
4
-
3
1
-
-
4
-
Anthony Day
Simon Moore
Nicole Cook 1
Talbot Babineau 2
Carl Bizon
Paul Ruiz
Kyle Loades
Caroline Waldron
Key:
A Number of meetings attended.
B Number of meetings held during the time the Director held office or was a
member of the committee during the period.
- Not a member of the relevant committee
1 Nicole resigned as a Non-Executive Director on 18 November 2022.
2 Talbot commenced as a Non-Executive Director on 13 February 2023.
Key risks
The Board is responsible for setting the overall risk culture of
the business. The Group has a risk management framework
in place to identify, understand and manage key strategic,
financial and operational risks.
The Board reviews and guides the Group’s system of risk
management, compliance and internal controls, including
the setting of risk appetite. The Audit and Risk Committee
(ARC) assists the Board in discharging these responsibilities.
The ARC oversees the adequacy and effectiveness of
AMA Group’s internal audit program, risk management
processes and internal control systems. This includes
the monitoring of material business risks and corporate
compliance activities.
The Board is cognisant of the following principal risks
that may materially impact the execution and achievement
of our business strategy and financial performance
and position:
■ Growth – Failure to deliver on AMA Group's strategic
plan including market opportunities and maintaining
a positive brand / reputation.
■ Macroeconomic pressures – Elevated levels of cost
inflation impacting parts and labour costs and ability
to pass on increases to customers.
■ Capital management and funding costs – Inability
to gain and maintain access to cost effective capital
for growth and development opportunities. Short term
liquidity constraints limiting availability of, or ability
to deploy growth funding. Higher costs of funding
with rising interest rates and potential movements in
margins as the Group navigates the recovery period.
■ Insurance pricing/relationships – Exposure to
contractual risks which are not appropriately
identified and/or priced.
■ People management – Inability to hire and retain
the necessary level of skills and experience within
the Group.
These risks are managed and mitigated through various
controls and programs including the bolstering of
corporate commercial, financial and people teams, who are
responsible for actively managing these risks. In addition,
the Company continues to monitor government policies,
regulatory changes and industry trends, and undertakes
regular risk register reviews and updates.
Outlook
The business environment remains challenging and repair
volume and site capacity remains variable throughout the
various states in which the Group operates.
The Company will continue to work to mitigate the
effect of the current economic downturn on its
operations. It is difficult to predict the impacts of labour
constraints, inflation and ability to pass on inflation and
insurer behaviour.
The Board remains confident in the executive team,
systems and experience and is committed to use of best
practices, economies of scale and infrastructure and
systems to enhance profitability and achieve operational
excellence. The Company remains vigilant when
considering the impact on team members, customers,
suppliers, and the communities we serve.
Accretive growth will remain the Company’s long-term
focus, whether it is through organic growth from the
Company’s existing operations or business acquisitions.
Dividends
A final dividend has not been declared.
31
Annual Report | 30 June 2023 Directors’ Report Directors
and Officers
32
Caroline Waldron
LLB (Hons), GAICD, FGIA
Non-Executive Chair of the Board
since 1 September 2023
Non-Executive Director
since 1 March 2022
Caroline is a Non-Executive Director and cross-border
advisor with over 30 years’ experience in regulated
consumer sectors such as technology, retail, and health.
Her executive experience includes leadership roles
in law, human resources, marketing, risk and internal
audit gained from ASX100 and bluechip organisations.
Caroline’s formal training is in law, and she has been
admitted to the Bar of England and Wales, and the
courts of various jurisdictions including in Australia and
New Zealand.
Board Committees:
Member of Audit and Risk Committee
Other directorships (current and recent):
Caroline currently serves on the Boards of Resimac
Group Limited (since 2020), Genetic Signatures Limited
(since 2022) and Southern Cross Care (NSW and ACT).
Directors’ Report Carl Bizon
Executive Director and Group Chief Executive Officer
since 1 February 2021
Non-Executive Director
3 February 2020 to 31 January 2021
Carl’s career in the manufacturing and automotive
industries spans more than 25 years. Carl has
held senior executive roles with world-leading
manufacturing and distribution businesses in various
sectors of the automotive industry.
Carl most recently served as President and CEO of
Horizon Global and prior to that was CEO of Jayco
Corporation and President and Managing Director
of TriMas Corporation’s Cequent subsidiaries in Asia
Pacific, Europe and Africa.
Carl’s expertise and experience extends to mergers
and acquisitions, manufacturing, operations, sales, large
scale project management and IT. Carl has successfully
led global businesses, improving profitability and
operational performance, delivering efficiencies and
increasing margins. Carl also serves as a Director of the
Australian Collision Industry Alliance.
33
Annual Report | 30 June 2023
Directors and Officers
Simon Moore
LLB (Hons), BCom (Hons)
Non-Executive Director
since 28 November 2018
Talbot Babineau
CFA, BA (Hons)
Non-Executive Director
since 13 February 2023
Simon founded Colinton Capital Partners in 2017. He is an
experienced private equity investor with significant public
company Board experience. Prior to founding Colinton
Capital Partners, he was a Managing Director and Global
Partner of The Carlyle Group for 12 years.
He brings to the Board strong corporate finance skills
and experience having held senior roles in investment,
financial, private equity, investment banking and
academic sectors. Simon has extensive experience in
successfully developing and implementing plans to
assist the growth potential of businesses.
Board Committees:
Chair of Audit and Risk Committee
(since 1 September 2023, member prior to that)
Member of the People Committee
(since 5 September 2023)
Other directorships (current and recent):
Simon is currently a Non-Executive Director of Alexium
International Group Limited and has previously served
as Non-Executive Director of Palla Pharma Limited
(resigned 23 May 2022), Firstwave Cloud Technology
Limited (resigned 30 August 2019) and Megaport Limited
(resigned 23 September 2019).
Talbot founded and is currently the President and
Chief Executive Officer of Bryson Holdings, a Canadian
based firm which has assembled a portfolio of
investments in public and private companies. He is
responsible for setting the firm's strategic vision,
pursuing new investment opportunities, and
maximizing the value of its existing portfolio.
During a nearly two-decade career as a successful
entrepreneur and investment manager, Talbot has
demonstrated expertise investing globally across asset
classes and industries. His capital markets experience
includes developing and implementing transformational
strategies that optimize operational and financial
performance and create value for all stakeholders.
Board Committees:
Member of People Committee
Member of the Audit and Risk Committee
(since 5 September 2023)
Other directorships (current and recent):
Talbot is a CFA Charterholder and currently serves as a
Non-Executive Director at The Lung Health Foundation.
34
Directors’ Report Former Directors
Nicole Cook, former Non-Executive Director, resigned
from the Board on 24 November 2022. She had served
as a Non-Executive Director since 1 December 2019.
Anthony Day and Paul Ruiz, former Non-Executive
Directors, resigned from the Board on 1 September 2023.
Anthony had served as a Non-Executive Director
since 28 November 2018, and Paul had served as a
Non-Executive Director since 17 May 2021.
Mark Licciardo
BBus (Accounting), FAICD, FGIA
Company Secretary
since 30 August 2021
Mark joined AMA Group Limited as Company Secretary
in August 2021. Mark was the founder and Managing
Director of Mertons Corporate Services, and is now
Managing Director, Listed Company Services for Acclime.
Acclime provides company secretarial and corporate
governance consulting services to ASX listed and unlisted
public and private companies.
He is also a former Company Secretary of ASX listed
companies Transurban Group and Australian Foundation
Investment Company Limited.
Kyle Loades
MBA, FAICD
Non-Executive Director
since 24 May 2021
Kyle is a seasoned Non-Executive Director and
Advisory Board Member with over two decades of
Board experience in a broad range of industry sectors
including financial services, the automotive, mobility
and transport sectors, infrastructure, emergency
services and technology.
Kyle has deep experience in developing and
implementing transformational growth strategies.
Most notably he was recently Chairman of the NRMA,
where he led a significant and successful operational
and cultural transformation of the business.
Board Committees:
Chair of People Committee (since 18 November 2022,
member prior to that)
Other directorships (current and recent):
Kyle also serves as Independent Chair of Active Super,
Non-Executive Director of Great Southern Bank,
and Non-Executive Chair of Hunter Medical
Research Institute.
35
Annual Report | 30 June 2023 Directors’ Report Directors’ Report
Remuneration Report
Annual statement by the
People Committee Chair
On behalf of the Board, we are pleased to present the
AMA Group FY23 Remuneration Report. This report focuses
on our remuneration approach and outcomes, and our
people highlights for the financial year ended 30 June 2023.
Operating conditions
FY23 was expected to be a transition year. Whilst the
Group did not achieve the original EBITDA guidance
provided to the market, the business delivered a
substantial improvement in earnings. Despite significant
repair volume demand and the execution of optimisation
strategies, the business experienced ongoing margin
compression, adverse to expectations. This was a result of
industry-wide labour constraints limiting repair volume
throughput; elevated lateral hiring contributing to higher
employee costs per hour and operational disruption; many
industry contracts not including appropriate dynamic
adjustment mechanisms that insulate parties from external
pressures such as inflation or increasing repair severity;
and the Group's Supply strategy progressing slower
than anticipated.
Board and Management Changes
and Remuneration
In November 2022, Nicole Cook, Chair of the People
Committee retired from the AMA Group Board; and
Talbot Babineau was appointed to the Board in February
2023. Talbot's appointment adds a diversity of thinking
to the AMA Group Board, as his overseas experience
supports breadth of perspective in support of the
advancement of AMA Group.
The FY23 Short Term Incentive (STI) and Long Term
Incentive (LTI) structure remained in line with FY22. For
the STI measures, we refined financial and non-financial
measures with the Group's endorsed strategy. For the LTI,
we maintained a 50% absolute TSR and 50% relative TSR
measure. For FY23 no STI was awarded to the Group CEO,
COO and CFO as the gateway hurdle was not met.
As we look to FY24, we will continue to set incentive
measures that align all stakeholders including
management, employees, and shareholders.
Attracting & Retaining the Workforce
AMA Group is committed to addressing the ongoing
skilled-labour shortages. The Group has an industry-leading
apprenticeship program which had 373 apprentices
within the business at 30 June 2023. Further, despite
externally driven delays in visa processing, the Group
landed 83 international recruits during FY23.
Throughout the year, the Group also continued to drive
cultural change through its “Building Better” program,
part of the One AMA concept. This program saw
several initiatives at both the site and Group level. This
included initiatives such as site-based morning teas and
lunches, Groupwide frontline leaders training, enhanced
communications, and the introduction of the AMA Group
Awards. The Group’s “Our Voice” engagement survey
showed improved employee satisfaction across all metrics.
Our commitment to safety
The safety of our people remains top priority. In FY23, the
Group finalised the roll out and training of the Take the
LEAD program, a tailored Health, Safety, and Environment
program developed in-house for AMA Group, with targeted
campaigns and materials, as well as training and monthly
focus areas. AMA Group’s LTIFR reduced by 48% over the
12 months to 30 June 2023, to 2.07.
Close
The People committee continues to focus on the safety,
attraction, and retention of its workforce, as well as
continuing to drive Diversity & Inclusion.
We trust this Remuneration
Report provides insight into the
high priority the Board places
on listening and responding
to our stakeholders, including
shareholders, employees, and
the broader community.
Kyle Loades
Chair of the People Committee
36
Remuneration ReportDirectors’ Report Introduction
This Remuneration Report provides shareholders with an understanding of our remuneration strategy and outcomes
for our Key Management Personnel (KMP) for the year ended 30 June 2023.
This report is presented in accordance with the requirements of the Corporations Act 2001 and its regulations.
Information has been audited as required by Section 308 (3C) of the Corporations Act 2001.
Key Management Personnel
The KMP of the Group comprise all Directors (Executive and Non-Executive) and other members of AMA Group's Executive
Management who have authority and responsibility for planning, directing and controlling the activities of the Group.
The table below sets out the details of those persons who were KMP during FY23.
Name
Position
Non-Executive Directors
Dates
People
Committee
ARC
Chair of the Board and Non-Executive Director
Full Financial Year
Anthony Day
Simon Moore
Talbot Babineau
Paul Ruiz
Kyle Loades
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Caroline Waldron
Non-Executive Director
Former Non-Executive Directors
Nicole Cook
Non-Executive Director
Full Financial Year
From 13 February 2023
Full Financial Year
Full Financial Year
Full Financial Year
Until 24 November 2022
-
-
Chair
-
-
-
-
-
-
Chair
-
-
-
-
-
Executive Directors
Carl Bizon
Executive Management
Geoff Trumbull
Mathew Cooper
Group CEO and Executive Director
Full Financial Year
Group CFO
Group COO
Full Financial Year
Full Financial Year
Our remuneration approach
The Board is committed to clear and transparent communication of remuneration arrangements. Our remuneration
approach is focused on appropriately motivating and retaining Executives while ensuring alignment with shareholder
outcomes and delivery against Group strategy.
Remuneration is competitive with Executives in comparable companies and roles and is reviewed against a mix of financial
and non-financial measures designed to reward the achievement of both short and long-term objectives. Our performance
metrics are aligned with the growth and development of all areas of the business including operational performance,
customer satisfaction and our longer-term people strategy.
External remuneration consultant engagement
In August 2022, the People Committee engaged Ernst & Young (EY) to provide advice on general market practice and
approach to executive incentive schemes. EY provided this advice at a fee of $13,750 inclusive of GST. EY’s advice was based
on a clear set of requirements from the People Committee and their report was provided directly to the People Committee
for their consideration. The Board and the People Committee are satisfied that this advice was made free of any undue
influence by any KMP.
EY's advice was considered by the Board and the People Committee in determining the FY24 Executive STI and LTI plans.
37
Annual Report | 30 June 2023 Remuneration ReportDirectors’ Report Remuneration framework
Our strategic priorities
Organic
Growth
Acquisition
Growth
Margin
Expansion
Cashflow
Generation
Great Place
to Work
Our remuneration framework is designed to support the Group’s strategic priorities, attract, retain and motivate
appropriately skilled and talented Executives to drive the business forward, instill a strong performance and governance
culture, and provide a link between executive remuneration, group performance and shareholder return. The Group has a
clear set of principles which guide our remuneration decisions and design.
The Group reviews its remuneration framework regularly to ensure it continues to evolve and be fit-for-purpose ensuring
alignment to market expectations and the businesses' strategic priorities.
Our remuneration principles
Fair and Market
Competitive
Linked to our
Strategic Priorities
Linked to Performance
and Culture
Simple and
Transparent
Aligned to our
Shareholders
Our remuneration framework for FY23
Purpose
Link to
performance
Total Fixed
Remuneration
(TFR)
Attract and retain Executives
with the capability and
experience to deliver our
strategic objectives and
contribute to the Group’s
financial and operational
performance.
Appropriately compensate
Executives for driving a
performance and governance
culture and delivering on the
business strategy.
Performance
measures
Considerations
■ Skills and experience
■ Accountability
■ Role complexity
■ Market competitive
STI
LTI
Reward Executives for
performance against agreed
annual objectives aimed at
achieving the financial and
strategic objectives of
the Group.
Strategic annual objectives are
embedded in the Executive
STI Plan.
Financial Gateway
A minimum Group normalised
EBITDA of at least 74.2% of target
must be achieved before any
STIs are payable.
Financial criteria
Group EBITDA:
Operating cashflow
Debt and refinancing
Price renegotiation
Optimise cost base
Non-Financial criteria
Workforce optimisation
STI at risk
Group CEO and CFO:
up to 100% of TFR
35%
25%
10%
10%
10%
10%
Align performance with the
long-term business strategy to
drive sustained earnings and
long-term shareholder returns.
Performance hurdles are set
by the Board and tested at
the end of the three-year
period to deliver sustained
shareholder value.
Performance measures are
independently tested.
Absolute TSR
50% of LTI allocation
Relative TSR
50% of LTI allocation
LTI at risk
Group CEO and COO:
up to 100% of TFR
Group COO: up to 50% TFR
Group CFO: up to 50% of TFR
Alignment
Attract and retain the best
people based upon the
competitive landscape
among relevant peers.
Reward year-on-year
performance in a balanced
and sustainable manner.
Delivery
Competitive, market-based fixed
remuneration (Base salary and
statutory superannuation and
other minor fringe benefits).
Performance based incentives
delivered in 50% cash and
50% deferred into equity
vesting after 12 and 24 months.
Performance conditions
must be satisfied before
the conditional rights vest.
Encourages sustainable,
long-term value creation
through equity ownership.
Performance Rights with
allocation calculated at
Face Value.
38
Remuneration ReportDirectors’ Report
Executive remuneration in detail
The level and mix of remuneration is designed to reward the achievement of both short and long-term objectives of the
business. This provides strong alignment between Executives’ achievement outcomes and performance.
FY23 – Remuneration mix and composition
The Executive variable pay opportunities for FY23 were weighted in favour of short-term outcomes, however delivery
of entitlements arising under the STI has been stretched over a two-year period, including deferral of 50% of any
entitlements into equity.
Year 1
Year 2
Year 3
Year 4
Total Fixed
Remuneration (cash)
Includes Base Salary
and Superannuation
STI
(cash & rights)
50% paid in cash at end
of performance year
25% deferred in rights
for 1 year
25% deferred in rights
for 2 years
LTI
(Performance Rights)
50% subject to relative TSR and 50% subject to absolute TSR
Key:
Grant / Award date
Vesting date
Performance period
Deferral period
The graph to the right represents the
target remuneration mix for Executive
KMP for FY23. The FY23 STI and LTI
represent maximum opportunities
available for Executives assuming the
performance requirements are satisfied.
Key:
TFR
STI
LTI
Group CEO
Carl Bizon
Group CFO
Geoff Trumbull
Group COO
Mathew Cooper
33%
33%
33%
40%
40%
20%
40%
20%
40%
FY24 – Change to remuneration mix and composition
During the year, the Board reviewed the Executive Remuneration Framework to ensure it drives the right outcomes for the
business. The Board approved the following changes to the FY24 STI and LTI plans for Executive KMP:
■ CFO's STI opportunity will change from 100% to 50% of TFR and LTI opportunity from 50% to 100% of TFR.
■ CEO's and COO’s STI and LTI opportunities remain the same as FY23.
■ FY24 STI payments, if achieved, will be paid fully in cash.
For FY24 LTI, the method to calculate the Volume Weighted Average Price for allocation, the number of Performance Rights
to be allocated, the Performance Period, the Vesting Conditions, and all other terms and conditions of the ELT grant remain
the same as FY23.
FY24 Executive KMP remuneration mix and
potential incentive payment mechanism
are illustrated in the tables below.
Key:
TFR
STI
LTI
Group CEO
Carl Bizon
Group CFO
Geoff Trumbull
Group COO
Mathew Cooper
33%
33%
33%
40%
20%
40%
40%
20%
40%
Year 1
Year 2
Year 3
Year 4
Total Fixed
Remuneration (cash)
Includes Base Salary
and Superannuation
STI
(cash)
Performance period
100% cash
LTI
(Performance Rights)
50% subject to relative TSR and 50% subject to absolute TSR
Key:
Grant / Award date
Vesting date
Performance period
39
Annual Report | 30 June 2023 Remuneration ReportDirectors’ Report Executive employment agreements
Remuneration and other terms of employment for Executive KMP are formalised in employment agreements and are
summarised in the table below.
Executive KMP
Carl Bizon
Geoff Trumbull
Mathew Cooper
Base salary inclusive
of statutory
superannuation
$900,000
$470,000
$650,000
Term of agreement
Ongoing contract
Ongoing contract
Ongoing contract
Notice period and
termination entitlement
Review period 1
6 months
6 months
6 months
Annual
Annual
Annual
1 This review will have regard to such matters as the responsibilities, performance, and remuneration of the employee.
Total fixed remuneration
TFR considers the complexity and expertise required of individual roles. To assess the competitiveness of fixed remuneration,
the People Committee considers market data by reference to appropriate independent and externally sourced comparable
benchmark information, as required.
TFR comprises cash salary and superannuation. Additional annual benefits may include minor fringe benefits.
Short-term incentives
STIs are based on the Group’s business and growth strategies and are set annually by the Board at the beginning of the
performance period. Executive KMP and other eligible senior management are entitled to participate in the STI Plan.
STI entitlements are assessed after the end of each financial year and in conjunction with the completion of the external
audit of the Group’s Financial Statements.
Any cash entitlements will be paid at a date determined by the Board following the release of the Group’s financial results
to the ASX and performance rights issued for any deferral into equity.
The below table summarises the objectives of the Group’s STI plan and identifies the performance measures and relevant
weightings for FY23.
Purpose
Motivate and reward employees for contributing to the delivery of annual business performance.
Participation
Executive KMP and other eligible senior management.
Performance
period
Opportunity
Financial
gateway
Performance
targets
The performance period is for the 12 months ended 30 June.
The target STI opportunity for executive KMP is 100% of fixed remuneration with the exception of the
COO (please refer to the Performance and Remuneration Outcomes section of this report).
Where significant outperformance is achieved the Board has discretion to pay above target amounts.
A sliding scale element is incorporated into the relevant performance measures to motivate Executives
to outperform base targets set by the Board.
A minimum Group budgeted EBITDA of 74.2% of target must be achieved before any STIs are payable.
The achievement of individual performance targets (once the financial gateway has been achieved)
shall determine the proportion of the potential incentive that will be awarded. Set out below are the
performance goals and weightings that were applied in respect of FY23.
Measure
Category
Weighting Goals
Financial
EBITDA
Operating
cashflow
Debt and
refinancing
35%
25%
Achieve budgeted EBITDA 1
Achieve budgeted Cashflow
10%
■ Resolve existing relationships, covenants &
short-term debt
■ Refinance existing debt
Pricing
renegotiation
Optimise
cost base
10%
10%
■ Reach agreed process with Suncorp to arrive at FY24 ARC
■ Other Insurers
Optimise (right-size) the cost base to current volumes
(infrastructure utilisation, procurement, car allocation/mix)
Non-financial Workforce
10%
optimisation
Drives focus on continued process improvement
and Workforce optimisation (acquisition, retention,
reallocation by location)
Deferral
50% of any entitlement will be deferred into equity using performance rights.
50% of the deferred portion will vest after 12 months and the other 50% will vest after 24 months
subject to the recipient being still employed by the Group.
1 Budgeted EBITDA is measured considering the financial impact of any acquisition, and any other significant restructuring cost or normalisations within the
Group, or changes in accounting standards, in order that the target is measured on a comparable basis.
40
Remuneration ReportDirectors’ Report
Long term incentives
The key aspects of the Performance Rights Plan are summarised in the table below.
Purpose
Eligibility
Instrument
Assist in attracting, motivating, and retaining Executive talent; focus executives' attention on driving
sustainable long-term growth; and align the interest of Executives with those of shareholders.
LTI grants are generally restricted to Executive KMPs and senior management who are most able to
influence shareholder value. Non-Executive Directors are not eligible to participate in the LTI plan.
Awards under this plan are made in the form of performance rights which are granted by the Company
for nil consideration. A performance right is a right to acquire one fully paid AMA share provided
specified performance hurdles are met. No dividends/distributions are paid on unvested LTI awards.
Allocation
methodology
The number of performance rights allocated to each participant is set by the Board. Accounting
standards require the estimated valuation of the grants be recognised over the performance period.
The maximum value is based on the estimated fair value calculated at the time of the grant and
amortised in accordance with the accounting standard requirements.
Opportunity
The maximum LTI opportunity for FY23 is equivalent to 100% of fixed remuneration for the Group CEO
and Group COO and up to 50% of fixed remuneration for the CFO.
Performance
period
Performance
hurdles
Performance measures are tested at the end of the three-year period.
The People Committee review the performance conditions annually to determine appropriate hurdles
based on the Group’s strategy and prevailing market practice. The following performance measures apply
to the LTI grants:
Relative TSR
(50% of LTI
Allocation)
TSR is an objective measure of shareholder value creation and is widely understood
and accepted by various key stakeholders. The Company’s TSR over the performance
period must be equal to or greater than the median TSR performance of the
Comparator Group. The Comparator Group consists of ASX201-300 companies,
excluding non-comparable companies from the Materials, Energy, Information
Technology, Financial and Real Estate sectors.
Absolute TSR
(50% of LTI
allocation)
Absolute TSR measures the growth in the price of shares (modified to account for capital
adjustments where appropriate) together with the value of the dividends over the
Performance Period, assuming that all those dividends are re-invested into new shares.
The absolute TSR growth calculation is a three-year compound annual growth rate (CAGR).
Vesting
schedule
Relative TSR
Relative TSR
(percentile)
Percentage of TSR-tested
rights to vest
Absolute TSR
TSR CAGR
Percentage of absolute
TSR-tested rights to vest
<50th
50th
Nil
50%
75th and above
100%
<8%
8%
12%
Nil
50%
75%
15% and above
100%
Vesting/
delivery
Straight line pro-rate vesting form 50%-100%
Straight line pro-rate vesting between each point
Vesting of LTI grants is dependent on achieving relative and absolute TSR performance targets
which are tested at the end of the three-year period. The performance rights will automatically vest
and be exercised if, and when, the Board determines the performance conditions are achieved.
If the performance rights vest, entitlements may be satisfied by either an allotment of new shares to
participants or by the purchase of existing shares on-market. The Board retains a discretion to pay a
cash amount, equivalent in value to the Shares that would have been issued, acquired or transferred.
Any performance rights that do not vest at the end of the performance period will lapse. The terms of
the performance rights do not include re-testing provisions.
Termination/
forfeiture
Executive KMP must be employed at the time of vesting to receive an entitlement to shares.
The Board has discretion on vesting of unvested performance rights where an employee leaves due
to retirement, retrenchment or redundancy, or termination by mutual consent. Where an employee
leaves due to resignation or termination all unvested performance rights will lapse.
41
Annual Report | 30 June 2023 Remuneration ReportDirectors’ Report Performance and remuneration outcomes for FY23
Company performance
The Group has operated under a challenging environment over the past three years as a result of COVID-19 lockdowns,
ongoing labour shortage and supply chain issues. During FY23 significant network and organisational optimisation activities
have been undertaken to improve financial performance.
The table below shows historical Company performance across a range of key measures. Performance across earnings
and individual measures is reflected directly in STI awards. LTI outcomes are aligned with shareholder returns over the
last three years.
Company Performance
Revenue and other income ($M)
Net Profit/(loss) ($M)
Normalised EBITDA pre AASB 16 ($M)
Total Shareholder Return
Basic EPS (cents)
Annual TSR (%)
Dividends (cents)
Share price at 30 June ($)
Change in share price ($)
FY19
FY20
FY21
FY22
FY23
606.7
21.7
58.2
3.4
38.8
2.75
1.43
0.38
825.4
(71.5)
53.2
(9.7)
(58.0)
-
0.60
(0.83)
919.9
(99.1)
71.5
(14.8)
(4.2)
-
0.58
(0.02)
845.1
(148.0)
(29.0)
(15.1)
(70.4)
-
0.17
(0.41)
869.6
(146.8)
19.6
(13.4)
(41.2)
-
0.10
(0.07)
Fixed remuneration outcomes
There have been no adjustments to Executive KMP fixed remuneration in FY23. The People Committee considers that the
current fixed remuneration for Executive KMP appropriately reflects their skills and experience at this time.
STI outcomes
During the year the Board reviewed the appropriateness of the performance measures linked to the STIs for Executives.
A main area of the review focused on identifying performance metrics that were measurable, understood and appropriate,
aligned with the growth and development of the business, and to the interests of our shareholders.
In addition to financial performance targets, including a financial performance gateway of achieving 74.2% of budgeted
EBITDA, the Board introduced Workforce Optimisation as a non-financial performance metrics for Executives.
STI outcomes for Group Executives including the Group CEO, CFO and COO are determined based on performance against
the Group STI scorecard. The table below outlines the Group STI performance measures that applied to the FY23 STI, and
the performance achieved.
Group scorecard category
and performance measures
Weighting
(at target)
Overall FY23
outcome
Performance
assessment
74.2% of budgeted Group
normalised EBITDA
Financial
Group normalised EBITDA
Operating cashflow
Debt and refinancing
Pricing renegotiation
Optimise cost base
35%
25%
10%
10%
10%
Non-Financial
Workforce optimisation
10%
EBITDA gateway performance was not met
EBITDA targets were not met during the year.
Operating cashflow was also not met as a result of the
lower EBITDA.
AMA Group complied with or received waivers of covenants.
Refer to note F6 for FY24 covenant change / waiver details.
Capital S.M.A.R.T achieved an interim price with Suncorp and
subsequent to year end finalised FY24 pricing (refer note F6).
AMA Collision achieved commercial pricing uplifts.
AMA Group successfully reduced cost base through network
and organisational optimisation activities, taking out over
$20 million of operating costs, including deferral of employee
share plan and no short term incentives for FY23.
Noting the constrained labour market both locally and globally,
the AMA workforce was redeployed to a reduced number of
locations which could be run with high productivity. Those sites
no longer manned were either hibernated or exited.
Key: FY23 outcome
Above target
At target
Between threshold
and target
Not achieved
42
Remuneration ReportDirectors’ Report STI outcomes (Cont.)
The following table outlines the FY23 STI outcomes for Executive KMP. In line with the STI outcomes for Executive KMP,
no STI payments were made to other Executives of the Group.
Executive KMP
Carl Bizon
Geoff Trumbull
Mathew Cooper
Target STI
as a % of fixed
remuneration
Total STI
awarded
($)
Payable
in cash
(50%)
Deferred
into equity,
vesting after
12 months
Deferred
into equity,
vesting after
24 months
% of target
STI awarded
100%
100%
50%
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
Long term incentive outcomes
Performance rights were granted on 15 December 2022 to the Executive KMP relating to FY23 Performance rights following
the resolution that passed at the Company’s 2022 AGM.
All grants were awarded at no cost to the participants and are subject to performance conditions which will be tested at the
end of the three-year performance period.
Accounting standards require the grant date fair value be recognised over the performance period.
For further details on the number of performance rights awarded to Executive KMP during the year, refer to the
Executive Remuneration Disclosure section of this report.
The FY21 grant under the LTI made to the CEO was tested at the end of FY23. Following the performance test, no rights vested.
Executive remuneration disclosures
FY23 Executive remuneration
The table below sets out the executive remuneration for FY23. Amounts represent the payments relating to the period
during which the individuals were KMP.
Salary 1
Bonus 2
Non-
Monetary
Benefits 3
Long-
Term
Benefits 4
Post-
Employment
Benefits 5
Performance
Rights 6
Total
Performance
related
Executive Director
Carl
Bizon
2023
2022
866,616
876,432
Executive Management
Geoff
Trumbull
Mathew
Cooper
2023
2022
2023
2022
452,741
186,013
624,577
522,026
Consolidated Remuneration
2023
2022
1,943,934
1,584,471
-
-
-
-
-
-
-
-
3,050
5,437
3,050
3,135
3,050
3,135
9,150
11,707
5,264
14,579
-
3,088
-
8,701
5,264
26,368
25,292
23,568
25,292
9,820
25,292
19,640
75,876
53,028
367,759
1,267,981
135,135
1,055,151
73,003
11,633
178,899
9,154
554,086
213,689
831,818
562,656
619,661
2,653,885
155,922
1,831,496
29.0%
12.8%
13.2%
5.4%
21.5%
1.6%
1 Salary includes short-term absences and changes in annual leave provision.
2 Bonus represents the cash component of the STI awarded.
3 Non-monetary benefits represent the effective net cost to the Group, consisting of the taxable value of fringe benefits aggregated with the associated fringe
benefit tax payable of those benefits.
4 Long-term benefits represent the movement in the provision for long service leave for amounts accrued and paid.
5 Post-employment benefits represent amounts paid for pension and superannuation benefits.
6 Performance rights represent the accounting expense recognised in relation to performance rights granted in the year. For details on the valuation of the
performance rights including models and assumptions used, please refer to Note F1(A)(iii) in the Consolidated Financial Statements.
These values may not represent the future value that the Executive KMP will receive, as the vesting of the Rights is subject to the achievement of performance
conditions. The probability of the performance conditions being satisfied is assessed at the end of each reporting period to reflect the most current
expectation of vesting.
43
Annual Report | 30 June 2023 Remuneration ReportDirectors’ Report
Executive KMP shareholdings
The table below summarises the movements in holdings of interests in shares of AMA Group Limited relating to the period
during which individuals were KMP.
KMP
Executive Directors
Carl Bizon
Executive Management
Geoff Trumbull
Mathew Cooper
Total
Opening
balance
Balance on
appointment
Other changes
(net) 1
Balance on
resignation
Closing
balance
842,858
-
350,000
1,192,858
-
-
-
-
-
-
-
-
-
-
-
-
842,858
-
350,000
1,192,858
1 Other changes (net) represent shares that were purchased or sold during the year.
Executive KMP performance rights
The terms and conditions of each grant of performance rights affecting remuneration in the current or a future reporting
period are set out in the table below:
Executive
KMP
Carl
Bizon
Geoff
Trumbull
Mathew
Cooper
Grant
FY23
FY22
FY21
FY23
FY22
FY23
FY22
Grant date 1
30/11/22
09/12/21
09/12/21
30/11/22
18/02/22
30/11/22
14/06/22
Performance
period
start date
Performance
period
end date
01/07/22
01/07/21
01/07/20
01/07/22
01/07/21
01/07/22
01/07/21
30/06/25
30/06/24
30/06/23
30/06/25
30/06/24
30/06/25
30/06/24
Vesting
date 2
31/08/25
31/08/24
31/08/23
31/08/25
31/08/24
31/08/25
31/08/24
Performance
rights as at
30 June
4,475,385
2,004,900
903,034
1,168,572
218,125
3,232,222
1,206,653
Fair value
per
instrument 3
FY23
expense /
(write-back)
RTSR
ATSR
($)
0.17
0.18
0.04
0.17
0.14
0.17
0.03
0.15
0.21
-
0.15
0.18
0.15
0.01
235,032
130,319
2,408
61,370
11,633
169,745
9,154
Maximum
value yet
to vest
705,096
390,956
-
184,109
34,900
515,570
27,461
1 Grant date is the date on which there is a shared understanding of the terms and conditions of the share-based payment arrangement.
2 Vesting date refers to the date at which the performance conditions are met.
3 The fair value of the performance rights at grant date is determined using appropriate models including a Monte-Carlo simulation for the relative TSR
component and Black Scholes Model for the EPS and ATSR component, and dependent on the vesting conditions. The value of each performance rights is
recognised evenly over the service period ending at the vesting date. For details on the valuation of the performance rights including models and assumptions
used, please refer to Note F1(A)(iii) in the Consolidated Financial Statements.
The table below summarises the movements during the reporting period in the number of performance rights over ordinary
shares in AMA Group Limited held by each Executive KMP.
Executive KMP
Executive Directors
Carl Bizon
Executive Management
Geoff Trumbull
Mathew Cooper
Total
Opening
balance
Granted as
compensation
Lapsed
or forfeited
Closing
balance
Vested and
exercisable
2,907,934
4,475,385
(903,034)
6,480,285
218,125
1,206,653
4,332,712
1,168,572
3,232,222
8,876,179
-
-
1,386,697
4,438,875
(903,034)
12,305,857
-
-
-
-
Options over unissued shares
No options were granted as remuneration during FY23. As at 30 June 2023 there are no unvested or unexercised options
held by Executive KMP.
Changes to Executives
Carl Bizon will retire as Executive Director and Chief Executive Officer (CEO) at the Group's 2023 Annual General Meeting (AGM)
on 23 November 2023.
44
Remuneration ReportDirectors’ Report Non-Executive Directors’
arrangements
Policy and approach to setting fees
The remuneration policy for Non-Executive Directors aims
to ensure the Group can attract and retain suitably skilled,
experienced and committed individuals to serve on the
Board and remunerate them appropriately for their time
and expertise.
The remuneration policy is reviewed annually by the People
Committee taking into consideration the size and scope of
the Group’s activities, the responsibilities and liabilities of
Directors, and demands placed upon them.
Upon the appointment to Chair of the People Committee
on 25 November 2022, Kyle Loades received the Committee
Chair fee of $15,000 per annum in addition to his existing
Non-Executive Director fee.
Upon the appointment to the Non-Executive Director
role on 13 February 2023, Talbot Babineau received a
fee of $120,000 per annum in line with other
Non-Executive Directors.
No other changes have been made to Non-Executive
Directors’ fees during FY23.
Changes to Board composition
Talbot Babineau was appointed as an independent
Non-Executive Director with effect from 13 February 2023
following the resignation of Nicole Cook in November 2022.
Effective 1 September 2023, Anthony Day and Paul Ruiz
resigned from their positions as Non-Executive Directors.
Current fee structure
Fees paid to Non-Executive Directors are inclusive of
superannuation and reflect the commitment, demands
and responsibilities of the position. Fees are benchmarked
against an appropriate group of comparator companies and
determined within the aggregate Directors’ fee pool limit of
$1,100,000, approved by shareholders at the 2019 AGM.
Non-Executive Directors do not receive variable remuneration.
Non-Executive Directors are entitled to reimbursement for
reasonable business-related expenses and are covered by the
Group’s Directors and Officers liability insurance policy.
The table set out below provides a summary of the
FY23 Board and Committee annual fees (inclusive of
superannuation). Fees for being a Committee member are
included in the Non-Executive Director fee.
Position
Chair of the Board
Non-Executive Director
Committee Chair
Annual Fee
$
275,000
120,000
15,000
45
Annual Report | 30 June 2023 Remuneration ReportDirectors’ Report Non-Executive Directors’ remuneration disclosures
FY23 Non-Executive Directors’ remuneration
The table below sets out the remuneration of Non-Executive Directors of the Group. Amounts represent the payments
relating to the period during which the individuals were KMP.
Post employment benefits
Non-Executive Directors
Anthony Day
Simon Moore
Talbot Babineau
Paul Ruiz
Kyle Loades
Caroline Waldron
Salary
2023
$
275,000
120,000
50,000
122,172
128,750
108,597
Former Non-Executive Directors
Nicole Cook
Leath Nicholson
Total
50,905
-
855,424
2022
$
2023
$ 1
275,000
126,250
-
117,061
120,000
36,382
135,000
46,000
855,693
-
-
-
12,828
-
11,403
5,345
-
29,576
2022
$
-
-
-
12,141
-
3,618
Total
2023
$
275,000
120,000
50,000
135,000
128,750
120,000
-
-
56,250
-
15,759
885,000
2022
$
275,000
126,250
-
129,202
120,000
40,000
135,000
46,000
871,452
1 Post employment benefits only apply to Directors that are paid through AMA Group payroll. Post-employment benefits represent amounts paid for pension
and superannuation benefits.
Non-Executive Directors’ shareholdings
The table below summarises the movements of interests in shares of AMA Group Limited relating to the period during which
individuals were KMP.
Opening
Balance
Balance on
appointment
Balance on
retirement /
resignation
Other changes
(net) 1
Closing
Balance
Non-Executive Directors
Anthony Day
Talbot Babineau 2
Kyle Loades
Simon Moore
Paul Ruiz
Caroline Waldron
Former Non-Executive Directors
Nicole Cook
704,797
-
172,668
41,555,153
531,778
-
135,128
-
7,038,124
-
-
-
-
-
Total
43,099,524
7,038,124
1 Other changes (net) represent shares that were purchased or sold during the year.
2 Talbot Babineau was appointed Non-Executive Director on 13 February 2023.
-
-
-
-
-
-
-
1,000,000
247,351
100,000
129,032
100,000
704,797
8,038,124
420,019
41,655,153
660,810
100,000
(135,128)
(135,128)
-
-
1,576,383
51,578,903
Other transactions and balances with KMP
In addition to specific disclosure requirements, the Group continuously re-assesses judgmental matters surrounding
relationships with KMP and completeness of its related party disclosures.
Loans provided to KMP
There were no loans provided or outstanding to KMP at the end of the financial year.
Amounts recognised as assets and liabilities
No balances are outstanding in relation to entities controlled by current KMP at 30 June 2023 (2022: nil).
46
Remuneration ReportDirectors’ Report Remuneration governance
The role of the People Committee
The role of the Committee is to assist the Board in fulfilling its governance and oversight responsibilities relating to:
■ People: management programs to optimise the contributions of AMA Group employees and corporate objectives
including succession and leadership development, talent management, diversity, organisational culture, employee
engagement and wellbeing;
■ Remuneration: AMA Group’s remuneration framework, practices and disclosures for the Chair and other Non-
Executive Directors, plus the remuneration, incentives and performance of the Group Chief Executive Officer (CEO),
other members of Executive KMP and other senior executives (as required); and
■ Nomination: Board and Board Committee composition and succession planning, diversity, performance.
Governance framework
The Group has a robust remuneration governance framework overseen by the Board. This ensures that remuneration
arrangements are appropriately managed and that the agreed frameworks and policies are applied across the Group.
The Board is supported by the People Committee and Audit and Risk Committee. Each committee has its own Charter
setting out its role and responsibilities, composition and how it operates. Further information on these committees is
available on the Company’s website: amagroupltd.com/corporate-governance
The diagram below provides an overview of the remuneration governance framework that has been established by the Group.
Group
Board
People
Committee
Role
The Board maintains overall accountability for oversight
of remuneration policies. The Board reviews, challenges,
applies judgement and, as appropriate, approves the
recommendations made by the People Committee.
It approves remuneration of Executive KMP and Non-Executive
Directors and the policies and frameworks that govern both.
The People Committee is the main governing body for key
people and remuneration strategies across the Group.
The role of the People Committee is to provide advice and
assistance to the Board in relation to people management
and remuneration policies, so that remuneration outcomes
for Executives are appropriate and aligned to Company
performance and shareholder expectations.
Management
Provides recommendations on remuneration design and
outcomes to the People Committee.
Implements remuneration policies.
Independent
external
remuneration
advisors
The People Committee may seek advice from independent
remuneration consultants in determining appropriate
remuneration polices for the Group.
Other governance practices
Category
Detail
Board
People
Committee
Management
Independent
External
Remuneration
Advisors
Use of
external
advisors
Clawback
policy and
discretion
To assist in performing its duties and making recommendation to the Board, the People Committee has
access to independent external consultants to seek advice on various remuneration related matters as
required. Any recommendations made by consultants in relation to remuneration arrangements for KMP
must be made directly to the Board without any influence from management to ensure any advice is
independent of management.
The Group’s LTI plan include claw-back provisions. This enables the Board to claw back remuneration
outcomes in the event of material non-compliance with any financial reporting requirement, misconduct,
or breach of obligations. The Board retains discretion to adjust remuneration outcomes upwards or
downwards to ensure incentives are not provided where it would be inappropriate or would provide
unintended outcomes. The Board balances judgement on remuneration outcomes with consideration
to all stakeholders.
Securities
trading policy
AMA has adopted a Securities Trading Policy that applies to all employees of the Group including
Non-Executive Directors, Executive KMP and their associated persons. The policy ensures compliance
with insider trading laws, to protect the reputation of the Group and maintain confidence in trading in
AMA Group Limited securities. The policy also prohibits specific types of transactions being made which
are not in accordance with market expectations or may otherwise give rise to reputational risk.
Remuneration
Report
approval
The People Committee will continue to encourage an open and constructive dialogue with shareholders
and their representative bodies and will consult with major stakeholders on any material changes to the
remuneration policy or how it is implemented. Of the eligible votes cast at the Company’s 2022 AGM,
99.07% were in favour of the FY22 Remuneration Report. The Company did not receive specific feedback
at the AGM on its remuneration practices.
47
Annual Report | 30 June 2023 Remuneration ReportDirectors’ Report Other items
Corporate governance statement
The Board believes that genuine commitment to good
corporate governance is essential to the performance and
sustainability of the Company’s business.
The Board has given due consideration to the ASX
‘Corporate Governance Principles and Recommendations’,
which offer a framework for good corporate governance.
The Board has approved the Corporate Governance
Statement for the year ended 30 June 2023 which can be
viewed on the Company’s website at amagroupltd.com/
corporate-governance/
Environmental regulation
Management continues to work with local regulatory
authorities to achieve, where practical, best practice
environmental management so as to minimise risk to
the environment, reduce waste and ensure compliance
with regulatory requirements. The Group had no adverse
environmental issues during the year.
Insurance of officers and indemnities
Insurance of officers
During the financial year, the Company paid a premium in
respect of a contract insuring the directors, the company
secretaries, and all executive officers of the Company
and of any related body corporate against a liability
incurred as such a director, secretary or executive officer
to the extent permitted by the Corporations Act 2001.
The directors have not included details of the nature of
the liabilities covered or the amount of the premium paid
in respect of the directors’ and officers’ liability, costs and
charges, as such disclosure is prohibited under the terms
of the contract.
Indemnity of auditors
The Company has not during or since the end of the
financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor
of the Company or of any related body corporate against a
liability incurred as such an officer or auditor.
Auditor's independence declaration
A copy of the auditor's independence declaration as
required under section 307C of the Corporations Act 2001
is set out on page 50.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of
the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings
to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of
those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor
(KPMG) for audit and non-audit services provided during
the year are set out in note F3 to the Consolidated
Financial Statements.
KPMG did not provide non-audit services during FY23.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191, relating to the 'rounding off' of amounts in the
Directors' Report. Amounts in the Directors' Report have
been rounded off in accordance with the instrument to
the nearest thousand dollars, or in certain cases, to the
nearest dollar.
Matters subsequent to the end of the
Financial Year
Finalisation of Suncorp pricing with Capital S.M.A.R.T
On 18 August 2023, the Group announced finalised pricing
with Suncorp in relation to the Capital S.M.A.R.T Motor
Repair Service Agreement (MRSA). The new pricing will
apply to all repairs booked from 1 July 2023 and returns
the arrangement to annual pricing reviews with a clear
re-pricing mechanism. The arrangements include
transitional support while AMA Group implements several
operational initiatives throughout FY24, which are planned
to improve efficiency and profitability of Capital S.M.A.R.T.
As transitional support payments cease at the end of FY24,
the loss of those benefits is expected to be offset by the
benefits realised from the several operational initiatives
identified by management.
While this new pricing improves the EBITDA of Capital
S.M.A.R.T in FY24, it represents a more modest level
of profitability compared prior assumptions used for
impairment testing purposes, which results in the
impairment of the remaining Capital S.M.A.R.T goodwill.
Refer to note C6 for further details.
48
Directors’ Report Other items
Matters subsequent to the end of the
Financial Year (Cont.)
Syndicated Facility Agreement Covenant Waiver
and Other Consents
Following engagement with existing lenders, AMA Group
has received consent from lenders for the following matters:
■ Waiver of June 2023 minimum EBITDA covenant.
While the June 2023 covenant was calculated and
technically achieved under the Syndicated Facility
Agreement (SFA), it was met with minimal headroom
and numerous addbacks. Given the time required
to review the basis of these calculations, the Group
requested the covenant be waived as a
precautionary measure.
■ Change of FY24 covenant requirements to remove
the fixed charge cover ratio (FCCR) for FY24 and
replace the net senior leverage ratio (NSLR) covenant
with a minimum EBITDA covenant for September and
December 2023. The NSLR covenant would also be
increased for March 2024 but left unchanged for
June 2024.
■ A debt repayment obligation of $35 million by
31 December 2023, with repayment to be funded
through equity raising proceeds.
■ Changing the maximum net debt to a minimum cash
requirement of $15 million at the end of each month.
■ Interest rate to continue to be set at BBSY + 4.15%
margin until September 2024.
As these consents were received by the lenders in August
2023, this does not change the debt classification from
current, however provides sufficient relief for the Group to
execute a pathway to refinancing the existing debt. As part
of this arrangement, the existing margin (including PIK
interest) will remain in place until September 2024.
Equity Raising
On 7 September 2023, AMA Group launched a capital
raising to raise $55 million of share capital. The capital
raising is comprised of a fully underwritten Institutional
Placement and a fully underwritten accelerated
renounceable entitlement offer. The proceeds of the equity
raising will be used to facilitate the principal repayment of
$35 million of existing senior bank debt by 31 December
2023 as well as providing further working capital funding.
No other matters or circumstances have occurred
subsequent to period end that have significantly affected,
or may significantly affect, the operations of the Group,
the results of those operations or the state of affairs of the
Group or economic entity in subsequent financial years.
This Directors’ Report is signed in accordance with a
resolution of the Board of Directors.
Carl Bizon
Executive Director
& Group Chief Executive Officer
7 September 2023
49
Annual Report | 30 June 2023 Directors’ Report 50
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of AMA Group Limited for the financial year ended 30 June 2023 there have been: i.no contraventions of the auditor independence requirements as set out in the CorporationsAct 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Maritza Araneda Partner Melbourne 7 September 2023 Financial Report
Contents
FINANCIAL REPORT
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
A
A1
A2
A3
B
B1
B2
B3
B4
C
C1
C2
C3
C4
C5
C6
C7
C8
C9
C10
D
D1
D2
D3
D4
D5
D6
D7
D8
E
E1
E2
E3
E4
F
F1
F2
F3
F4
F5
F6
BASIS OF PREPARATION
Basis of preparation
Significant accounting policies
Critical accounting estimates and judgements
PERFORMANCE FOR THE YEAR
Segment information
Revenue and other income
Other expense items
Income tax
ASSETS AND LIABILITIES
Receivables and contract assets
Inventories
Other financial assets
Other assets
Property, plant and equipment
Intangible assets
Right-of-use assets and lease liabilities
Trade and other payables
Other liabilities
Provisions
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
Capital management
Earnings / (loss) per share
Dividends
Contributed equity
Other reserves
Cash and cash equivalents
Other financial liabilities
Financial risk management
GROUP STRUCTURE
Parent entity information
Investments in controlled entities
Non-controlling interests
Deed of cross guarantee
OTHER INFORMATION
Share-based payments
Related party transactions
Auditor's remuneration
Commitments
Contingent liabilities
Events occurring after the reporting period
Directors’ Declaration
Independent Auditor’s Report
51
52
53
54
55
56
56
56
57
58
59
59
61
62
63
66
66
67
68
68
69
71
74
77
77
78
80
80
81
81
82
83
84
86
88
92
92
93
94
95
97
97
99
100
100
101
101
102
103
These Financial Statements are Consolidated Financial Statements for the Group consisting of AMA Group Limited and its controlled
entities. A list of controlled entities is included in note E2. The Financial Statements are presented in the Australian currency.
The Financial Statements were authorised for issue by the Directors on 7 September 2023. The Directors have the power to amend
and reissue the Financial Statements.
AMA Group Limited is a Company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of
business is: Level 13, 484 St Kilda Road, Melbourne Victoria 3004
All press releases, financial reports and other information are available at our Investor Centre on our website: https://amagroupltd.com/
51
LeadAuditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that,to the best of myknowledge and belief,in relation to the audit of AMAGroup Limited for the financial year ended 30 June 2023 there have been: i. no contraventions of the auditorindependence requirementsas set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code ofprofessional conduct in relation to the audit. KPMG Maritza AranedaPartner Melbourne6 September 2023 Annual Report | 30 June 2023 Consolidated Statement of Comprehensive Income
For the year ended 30 June 2023
Revenue and other income
Raw materials and consumables used
Employee benefits expense
Occupancy expense
Professional services expense
Other expense
Loss on disposal of business
Fair value adjustment on contingent vendor consideration
Depreciation and amortisation expense
Impairment expense
Operating loss before interest and tax
Net finance costs
Loss before income tax
Income tax benefit
Loss after income tax
Loss is attributable to:
Ordinary shareholders of AMA Group
Non-controlling interests
Loss for the period
Other comprehensive income / (expense)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Changes in fair value of cash flow hedges
Other comprehensive income / (expense), net of tax
Notes
B2
2023
$’000
2022
$’000
869,600
844,929
B3(A)
B3(C)
B3(B)
B4(A)
(412,906)
(344,801)
(15,641)
(7,544)
(24,951)
(63)
654
(71,360)
(116,830)
(123,842)
(37,431)
(161,273)
14,467
(146,806)
(424,365)
(340,161)
(25,792)
(10,777)
(24,981)
-
13,729
(78,754)
(105,513)
(151,685)
(31,141)
(182,826)
34,818
(148,008)
(144,448)
(2,358)
(146,806)
(144,214)
(3,794)
(148,008)
4
(1,768)
(1,764)
(76)
4,575
4,499
Total comprehensive loss, net of tax
(148,570)
(143,509)
Total comprehensive loss is attributable to:
Ordinary shareholders of AMA Group
Non-controlling interests
Total comprehensive loss for the period
Basic and diluted earnings / (loss) per share (cents)
E3(B)
Notes
D2
(146,214)
(2,356)
(148,570)
(139,714)
(3,795)
(143,509)
2023
cents
(13.46)
2022
cents
(15.10)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
52
Financial Report Consolidated Statement of Financial Position
As at 30 June 2023
ASSETS
Current assets
Cash and cash equivalents
Receivables and contract assets
Inventories
Other financial assets
Current tax receivable
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Other financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Total current liabilities
Non-current liabilities
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Convertible notes
Other reserves
Retained deficit
Equity attributable to ordinary shareholders of AMA Group
Non-controlling interests
Notes
D6
C1
C2
C3
B4(C)
C4
C5
C7
C6
C3
B4(E)
C8
D7
C7
C10
C9
D7
C7
C10
C9
B4(E)
2023
$’000
2022
$’000
28,874
61,470
44,457
1,592
4,178
14,469
155,040
46,479
296,184
325,788
-
685
20,747
689,883
52,189
67,428
39,565
3,067
14,405
7,820
184,474
53,013
266,889
454,162
5,212
-
20,942
800,218
844,923
984,692
111,441
163,846
31,000
36,331
3,459
346,077
45,104
285,988
31,742
38,079
23,761
424,674
116,470
2,940
34,076
42,593
14,752
210,831
205,088
255,227
25,292
33,841
34,630
554,078
770,751
764,909
74,172
219,783
D4(A)
D7(B)
D5
E3(A)
533,190
5,197
4,652
(476,930)
66,109
8,063
531,504
5,197
5,145
(332,482)
209,364
10,419
Total equity
74,172
219,783
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
53
Annual Report | 30 June 2023 Financial Report Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Attributable to owners of AMA Group Limited
Share
capital
$’000
Convertible
notes
$’000
Other
reserves
$’000
Retained
deficit
$’000
Notes
Balance at 1 July 2021
Loss for the year
Other comprehensive income /
(expense)
Total comprehensive income /
(expense) for the year
Transactions with owners in
their capacity as owners:
Shares issued, net of transaction costs 1
Equity component of convertible bond,
net of transaction costs
Employee equity plan
Service rights vesting
Balance at 30 June 2022
424,404
-
-
-
103,662
-
3,184
254
107,100
531,504
-
-
-
-
-
5,197
-
-
5,197
5,197
Non-
controlling
interests
$’000
Total
equity
$’000
14,214
(3,794)
(1)
250,918
(148,008)
4,499
Total
$’000
236,704
(144,214)
4,500
568
-
4,500
(188,268)
(144,214)
-
4,500
(144,214)
(139,714)
(3,795)
(143,509)
-
-
331
(254)
77
-
-
-
-
-
103,662
5,197
3,515
-
112,374
-
-
-
-
-
103,662
5,197
3,515
-
112,374
5,145 (332,482)
209,364
10,419
219,783
1
Includes $96,894 thousand (net of transaction costs) from shares issued under the non-renounceable entitlements offer which completed on 5 October 2021
and $6,768k from shares issued to vendors (refer to note D4(B) for further information).
Attributable to owners of AMA Group Limited
Share
capital
$’000
Convertible
notes
$’000
Other
reserves
$’000
Retained
deficit
$’000
Notes
Non-
controlling
interests
$’000
Total
$’000
Total
equity
$’000
531,504
-
-
5,197
-
-
5,145
-
(1,766)
(332,482)
(144,448)
-
209,364
(144,448)
(1,766)
10,419
(2,358)
2
219,783
(146,806)
(1,764)
-
-
(1,766)
(144,448)
(146,214)
(2,356)
(148,570)
Balance at 1 July 2022
Loss for the year
Other comprehensive income /
(expense)
Total comprehensive income /
(expense) for the year
Transactions with owners in
their capacity as owners:
Shares issued, net of transaction costs
Employee equity plan
1,686
-
1,686
-
-
-
(255)
1,528
1,273
-
-
-
1,431
1,528
2,959
-
-
-
1,431
1,528
2,959
Balance at 30 June 2023
533,190
5,197
4,652
(476,930)
66,109
8,063
74,172
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
54
Financial Report Consolidated Statement of Cash Flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payments for make good of leased sites
Interest received
Interest and other costs of finance paid
Income taxes received / (paid)
Government grants received
Net cash inflows / (outflows) from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from disposal of business (net of costs and cash disposed)
Payments for property, plant and equipment
Payments for intangible assets
Contingent consideration relating to previously acquired businesses
Net cash outflows from investing activities
Cash flows from financing activities
Repayment of borrowings
Principal elements of lease payments
Payment of new borrowings transaction costs
Equity raised, net of costs
Proceeds from issuance of convertible notes
Net cash (outflows) / inflows from financing activities
Notes
2023
$’000
2022
$’000
995,655
(963,143)
(5,780)
368
(24,498)
14,969
-
17,571
972
2,428
(10,383)
-
(2,041)
(9,024)
-
(31,887)
-
-
-
(31,887)
946,798
(947,496)
(687)
198
(26,387)
(1,158)
501
(28,231)
229
-
(6,793)
(546)
(10,840)
(17,950)
(72,500)
(32,531)
(6,006)
95,285 1
50,000
34,248
B4(C)
D6(B)
D6(C)
D6(C)
D6(C)
D6(C)
Net decrease in cash and cash equivalents
(23,340)
(11,933)
Cash and cash equivalents, at the beginning of the financial year
Effects of exchange changes on the balances held in foreign currencies
Cash and cash equivalents, at end of the financial year
D6(A)
52,189
25
28,874
64,203
(81)
52,189
1 On 5 October 2021, the Group successfully completed the fully underwritten institutional and retail components of its pro rata non-renounceable
1 for 2.8 entitlement offer. The total gross proceeds of $99,981 thousand ($95,285 thousand net of transaction costs and tax) were used to repay $72.5 million
in debt facilities, with the remainder used to fund working capital, liquidity and in supporting growth initiatives.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
55
Annual Report | 30 June 2023 Financial Report A
BASIS OF PREPARATION
This section of the notes includes other information that must be disclosed to comply with the accounting standards and
other pronouncements but is not directly related to individual line items in the financial statements.
A1 Basis of preparation
This section describes the financial reporting framework within which the Consolidated Financial Statements
are prepared and a statement of compliance with the Corporations Act 2001 and Australian Accounting
Standards and Interpretations.
The Group is a for-profit entity which is incorporated and domiciled in Australia. The Consolidated Financial Report of the Group
for the year ended 30 June 2023 (FY23) was authorised for issue in accordance with a resolution of directors on 7 September 2023.
The Consolidated Financial Statements have been prepared on the historical cost basis except for derivative financial
instruments and contingent vendor consideration which have been measured at fair value.
Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial
year presentation.
The Consolidated Financial Statements are presented in Australian dollars and amounts have been rounded to the nearest
thousand dollars unless otherwise stated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191.
The Consolidated Financial Statements of the Group are general purpose financial statements which have been prepared in
accordance with the Corporations Act 2001, and Australian Accounting Standards and Interpretations.
Compliance with Australian Accounting Standards ensures that the Consolidated Financial Report complies with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Consequently, this Financial Report has been prepared in accordance with and complies with IFRS as issued by the IASB.
Going concern
(A)
This general purpose Consolidated Financial Report has been prepared on a going concern basis, which assumes that the
Group will be able to meet its debts as and when they become due and payable.
While performance is improved in FY23, AMA continues to see negative effects on labour and supply chain costs inputs
as well as labour availability. These factors have moderated the expected profitability growth in FY23 and FY24. As a result,
continuing at current levels of profitability may cast significant doubt on the Group’s ability to continue as a going concern
in the event that the Group is unable to meet existing covenants or refinance existing debt prior to its maturity.
As noted in note F6, the Group has received a waiver of June 2023 covenants and a reshaping of FY24 covenants. Based
on current forecasts including amounts to be received through the equity raise, the Group expects to meet these new
covenants. Under the new arrangements for FY24, a repayment of $35 million is required by 31 December 2023. This is
expected to be met through the equity raise as described in note F6.
Management has prepared cash flow forecasts for the next twelve months that include the above initiatives and support
the ability of the Group to continue as a going concern. The Group was cash flow positive for the second half of FY23 and the
Board approved budget for FY24 projects positive cash flow after funding some growth initiatives. The main consideration
for FY24 is the refinancing of existing senior debt facilities ahead of their October 2024 maturity.
The Group’ has a net senior debt position as at 30 June 2023 of $137,168,000. As at 30 June 2023, the Group had $28,874,000
in cash and cash equivalents.
As at 30 June 2023, the Group has current liabilities exceeding current assets by $191,037,000 of which $163,846,000
is expected to be refinanced in FY24. The deficit is also impacted by AASB 16 Leases (refer note C7) which requires of
the right-of-use asset to be entirely classified in non-current, whilst future lease payments are split between current
($31,000,000) and non-current, resulting in a mismatch. Management expects any working capital deficiency will
be met out of operating cash flows.
The Group remains confident that based on forecast performance for FY24 and assuming a successful equity raise as set
out in note F6 that it can remain within reshaped covenants. In the event that cash flows do not meet expectations, the
Group has a number of options which could include restructuring operations or the sale of assets to assist in meeting of
revised covenants if required.
Management has taken a number of actions during the year to improve future profitability of the Group. Whilst the Group’s
path to expected profitability, completion of fundraising activities in the current environment and ongoing compliance with
covenant requirements is inherently uncertain and so may cast significant doubt upon the Group’s ability to continue as a
going concern, Management believes that the range of actions available to it means that the uncertainty is being managed.
In the event the Group does not achieve the above outlined initiatives, it may not be able to continue its operations as
a going concern and therefore may not be able to realise its assets and extinguish its liabilities in the ordinary course of
operations and at the amounts stated in this Consolidated Financial Report.
The Directors’ are of the opinion that, as at the date of approving this report, the cash flow forecasts and deleveraging activities
described in note F6 support the Group’s ability to continue as a going concern including ongoing covenant compliance.
56
AMA Group
Notes to the Consolidated Financial Statements A2 Significant accounting policies
This section sets out the significant accounting policies upon which the Consolidated Financial Statements are
prepared as a whole. Where a significant accounting policy is specific to a note to the Consolidated Financial
Statements, the policy is described within that note. This section also shows information on new accounting
standards, amendments, and interpretations not yet adopted and the impact they will have on the
Consolidated Financial Statements.
Basis of consolidation
(A)
The Consolidated Financial Statements incorporate the assets and liabilities of all controlled entities in the Group as at
30 June 2023 and the results of all controlled entities for the year then ended. A list of the controlled entities is provided in
note E2 to these financial statements.
The Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date
that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Non-controlling interests are shown separately in the Consolidated Statement of Comprehensive Income, Consolidated
Statement of Financial Position and Consolidated Statement of Changes in Equity.
Goods and Services Tax (GST)
(B)
Revenues, expenses, assets and liabilities are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included within other receivables or payables in the
Consolidated Statement of Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
New and amended standards adopted by the Group
(C)
The Group has adopted the following new and amended accounting standards and interpretations for the annual reporting
period commencing on 1 July 2022:
■ AASB 2020-3 Annual improvements 2018 – 2020 and Other Amendments
Application of the above amendments has not materially impacted the Group.
New and amended standards not yet adopted by the Group
(D)
Certain new accounting standards and amendments to standards have been published that are not mandatory for
reporting periods commencing 1 July 2022 and have not been early adopted by the Group. These standards are not expected
to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.
57
Annual Report | 30 June 2023 A Basis of preparation A3 Critical accounting estimates and judgements
This section describes the critical accounting estimates and judgements that have been applied and may have a
material impact on the Consolidated Financial Statements.
In applying the Group’s policies, the Directors are required to make estimates, judgements, and assumptions that affect
amounts reported in this Consolidated Financial Report. The estimates, judgements, and assumptions are based on
historical experience, adjusted for current market conditions, and other factors that are believed to be reasonable under
the circumstances, and are reviewed on a regular basis. Actual results may differ from estimates. Revisions to estimates
are recognised prospectively.
The estimates and judgements which involve a higher degree of complexity or that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next period are included in the following notes:
■ Note A1(A) – Going concern
■ Note B4(F)(i) – Recoverability of deferred tax assets
■ Note C6(B)(iv) – Estimation of recoverable amounts of assets and CGUs
■ Note C7(H) – Estimation of lease term
■ Note C10(B) – Estimation of make good provisions
Detailed information about each of these estimates and judgements is included in other notes together with information
about the basis of calculation for each affected line item.
Key estimates and judgements – climate change
The Group is progressing its assessment of the potential financial impacts of climate change and the associated policy
changes and regulations anticipated as part of the transition to a low carbon economy. While climate risk has been formally
incorporated in the Group's risk register, there are no immediate impacts to the carrying amount of the Group's assets and
liabilities at the date of this report. Further assessment of climate risk and the development of any relevant action plans may
impact the Group's critical accounting estimates and judgements and result in material changes to the financial results and
the carrying amount of certain assets and liabilities in future reporting periods.
58
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
B
PERFORMANCE FOR THE YEAR
This section provides information that is most relevant to explaining the Group's performance during the year and where
relevant, the accounting policies that have been applied.
B1 Segment information
The Group identifies different business divisions that are regularly reviewed by the Board and executive
management in order to allocate resources and assess performance. These divisions offer different products and
services and are managed separately. The segment disclosures present the financial performance of each division
and other material items.
Description of segments
(A)
The Board and Executive Management Team, the Chief Operating Decision Maker (CODM), monitor the operating results
of the business units separately for the purpose of making decisions about resource allocation and performance assessment.
The Group’s operating segments are organised and managed separately according to the nature of the products and
services provided being Vehicle Collision Repairs, Heavy Motor and Supply. The Group’s corporate function is not an
operating segment under the requirements of AASB 8 Operating Segments as its revenue generating activities are only
incidental to the business. Geographically, the Group operates in Australia and New Zealand.
A description of the operations in each of the Group’s reportable segments is outlined below.
Vehicle Collision Repairs
Includes Capital S.M.A.R.T, which specialises in performing rapid repairs on cars that have sustained low-to-medium
collision damage and are still drivable and AMA Collision, which provides larger, more complex repairs of cars that
have sustained high severity collision damage and are undriveable as well as prestige repair. These business units
were previously referred to as “Drive” and “Non-Drive”, with a change in nomenclature following network optimisation.
Heavy Motor
Provides dedicated and highly specialised facilities for all commercial vehicle repairs, from light commercial to
prime movers, B-doubles, buses, and earthmoving equipment.
Supply
Operating under ACM Parts, this business provides a large range of genuine, reclaimed and aftermarket parts
as well as collision repair consumables for the mechanical and collision repair industries.
Unless stated otherwise, all amounts reported are determined in accordance with the Group’s accounting policies.
All inter-segment transactions are eliminated on consolidation for the Consolidated Financial Statements. Comparative
information has been re-presented to achieve consistency in disclosure with the current financial period presentation.
59
Annual Report | 30 June 2023 B1
Segment information (Cont.)
Adjusted EBITDA from reportable segments
(B)
In addition to using profit as a measure of the Group, the CODM use adjusted EBITDA (Earnings Before Interest, Tax,
Depreciation and Amortisation) as a measure to assess the performance of the segments.
Adjusted EBITDA excludes the effects of significant items which may have an impact on the quality of earnings such as fair
value adjustments or items that are the result of an isolated, non-recurring event. It includes occupancy costs, reflecting the
treatment of these costs prior to the implementation of AASB 16 Leases.
A reconciliation of adjusted EBITDA to loss before income tax is provided below:
Vehicle Collision
Repairs
Heavy
Motor
Supply
Corporate /
Eliminations
Total
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
Revenue and
other income
Revenue from
external customers
Inter-segment
revenue
Other income
Total group
revenue and
other income
Segment result
(EBITDA excluding
impact of AASB 16
Leases)
AASB 16 Leases
impact to
ccupancy costs
and other income
760,238 718,960
65,043
53,873
39,252
65,245
-
- 864,533 838,078
-
-
-
-
40,250
31,222 (40,250)
(31,222)
-
-
4,223
764,461
6,341
725,301
352
65,395
81
53,954
55
79,557
380
96,847
437
(39,813)
49
6,851
5,067
(31,173) 869,600 844,929
20,748
(25,001)
7,581
6,570
(2,213)
(3,182)
(7,381)
(10,334)
18,735
(31,947)
35,918
42,143
5,075
4,209
3,842
4,371
187
77
45,022
50,800
EBITDA
56,666
17,142
12,656
10,779
1,629
1,189
(7,194)
(10,257)
63,757
18,853
Depreciation and amortisation
Impairment expense
Loss on disposal of business
Net finance costs
Fair value adjustments on contingent vendor consideration
Loss before income tax
(71,360)
(116,830)
(63)
(37,431)
654
(78,754)
(105,513)
-
(31,141)
13,729
(161,273)
(182,826)
Segment assets and liabilities
(C)
Segment assets and liabilities are not directly reported to the CODM when assessing the performance of the operating
segments and are therefore not disclosed.
Geographical information
(D)
The Group operates in two geographical locations, being Australia and New Zealand. The table below provides information
on the geographical location of non-current assets and revenue from external customers. Revenue is allocated to a
geography based on the location of the operation it was derived from. All revenue in New Zealand relates to the vehicle
collision repairs segment.
Australia
New Zealand
Total
Revenue from external customers
Other income
2023
$’000
838,931
5,067
2022
$’000
815,668
6,676
Total group revenue and other income
843,998
822,344
2023
$’000
25,602
-
25,602
2022
$’000
22,410
175
22,585
2023
$’000
864,533
5,067
869,600
2022
$’000
838,078
6,851
844,929
Non-current assets (excluding financial
instruments and deferred tax assets)
660,326
764,816
8,810
9,248
669,136
774,064
60
Notes to the Consolidated Financial Statements B2 Revenue and other income
The Group is Australia's largest vehicle accident repairer and generates revenue primarily from its panel repair
services. Other revenue is derived from the sale of automotive parts.
Set out below is the disaggregation of the Group’s revenue and other income. The Group derives revenue from the transfer of
goods and services over time and at a point in time. Comparative information has been re-presented to achieve consistency
in disclosure with the current financial period presentation.
Vehicle Collision
Repairs
Heavy
Motor
Supply
Corporate /
Eliminations
Total
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
759,577
718,275
-
-
-
-
64,439
53,258
-
-
-
-
-
-
- 759,577
718,275
-
64,439
53,258
661
-
685
-
760,238 718,960
6,341
4,223
604
-
65,043
352
615
-
53,873
81
79,382
120
79,502
55
96,201
266
(40,250)
-
96,467 (40,250)
437
380
40,397
120
(31,222)
-
66,279
266
(31,222) 864,533 838,078
6,851
5,067
49
764,461
725,301
65,395
53,954
79,557
96,847
(39,813)
(31,173) 869,600 844,929
759,577
661
718,275
685
760,238 718,960
64,439
604
65,043
53,258
615
53,873
120
79,382
79,502
266
-
96,201
(40,250)
96,467 (40,250)
771,799
-
824,136
(31,222)
66,279
40,397
(31,222) 864,533 838,078
Revenue
Vehicle panel
repair services
Truck and
bus repairs
Sale of goods
Other services
Total revenue
Other income
Revenue and
other income
Timing of revenue
recognition
Over time
At a point in time
Revenue
In respect of vehicle collisions repairs and heavy motor segments:
■ approximately 87% of revenue is derived from insurers (2022: approximately 88%);
■ approximately 66% of revenue is derived from the top two customers (2022: approximately 60%).
Significant accounting policies
Revenue
Revenue from contracts with customers is recognised to depict the transfer of promised goods or services to
customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services.
Revenue is recognised for the major business activities as follows:
Vehicle Collision Repair Services
Revenue arising from these services relate to performance obligations satisfied over time and in future
periods. Revenue is recognised based on the inputs used in the vehicle repair process, primarily labour
hours expended and parts purchases, relative to the total expected inputs to complete the repairs. All
vehicle repairs are invoiced upon completion, with payment terms between 1 and 7 days for insurers, cash
on delivery for private work and up to 30 days payment terms for fleet and other commercial customers.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change.
Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the
period in which the circumstances that give rise to the revision become known by management.
Jobs completed not invoiced are reflected as a contract asset and jobs still in progress within other
receivables until billed.
Sale of goods
The Group sells automotive parts and consumables online, in the wholesale market and through retail
premises. Sales are recognised when control of the goods has transferred, that is, when the goods are
delivered to the wholesaler or sold to the end customer.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration
is unconditional because only the passage of time is required before the payment is due.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
61
Annual Report | 30 June 2023 B Performance for the year
B3 Other expense items
The Group has identified a number of items which are material due to the significance of their nature and/or amount.
They are listed separately below to provide a better understanding of the financial performance of the Group.
(A)
Depreciation and amortisation expense
Depreciation expense on property, plant and equipment
Depreciation expense on right-of-use assets
Amortisation on intangibles
Total depreciation and amortisation expense
(B)
Net finance costs
Interest and finance charges
Interest expense on lease liabilities
Unwind of discount on make good provision
Amortisation of borrowing costs
Interest income
Net finance costs
Significant accounting policy
Notes
C5
C7(C)
C6(A)
2023
$’000
12,836
42,138
16,386
71,360
2023
$’000
14,802
19,015
1,486
2,496
(368)
37,431
2022
$’000
17,413
43,618
17,723
78,754
2022
$’000
9,577
18,269
309
3,184
(198)
31,141
Finance costs
Finance costs are recognised as expenses in the period in which they are incurred. Finance costs comprise
interest on borrowings calculated using the effective interest method, interest expense on lease liabilities, and
amortisation of capitalised borrowing costs over the term of the borrowings.
(C)
Impairment expense
The Group recognised the following non-cash impairment expense:
Impairment of goodwill – Capital Smart
Impairment of goodwill – AMA Collision
Impairment of non-current assets
Impairment of right-of-use assets
Total impairment expense
Notes
C6(B)(ii)
C6(B)(ii)
C5
C7(C)
2023
$’000
57,740
52,632
2,427
4,031
116,830
2022
$’000
41,400
39,300
8,315
16,498
105,513
62
Notes to the Consolidated Financial Statements B4 Income tax
This section presents the total income tax expense charged to the Group in respect of amounts currently
owing/receivable for taxable profits/losses and future income taxes recoverable or payable in respect of temporary
differences. The Group presents a reconciliation of accounting profit or loss to income tax and a summary of
changes in future income tax recoverable or payable by major category.
(A)
Income tax benefit
Current tax
Current tax benefit
Adjustments for current tax of prior periods
Total current tax benefit
Deferred tax
Increase / (decrease) in deferred tax assets
Increase / (decrease) in deferred tax liabilities
Under / over provision in respect of prior years
Total deferred tax benefit
2023
$’000
(5,009)
198
(4,811)
(11,955)
2,120
179
(9,656)
2022
$’000
(14,270)
400
(13,870)
(5,552)
(15,396)
-
(20,948)
Income tax benefit
(14,467)
(34,818)
(B)
Reconciliation of accounting profit/(loss) to income tax benefit
Loss before tax
2023
$’000
2022
$’000
(161,273)
(182,826)
Tax at the Australian tax rate of 30% (30 June 2022: 30%)
(48,382)
(54,848)
Tax effect of amounts which are not (assessable) / deductible in calculating taxable income:
Non-deductible impairment expense
Non-deductible expenses
Fair value adjustments on contingent vendor consideration
Employee equity plan expense
Non-assessable income
Adjustments for current tax of prior periods
Recognition of previously unrecognised tax losses
Derecognition of previously recognised deductible temporary differences
Effect of tax rates in foreign jurisdictions
Other
33,112
78
(196)
602
(86)
198
-
231
30
(54)
24,210
49
(4,119)
99
(495)
400
80
(202)
10
(2)
Income tax benefit
(14,467)
(34,818)
(C)
Reconciliation of income tax payable / (receivable)
Balance at 1 July
Movement:
Income taxes payable / (receivable) for the period
Adjustments for current tax of prior periods
Income tax received / (paid)
(Disposed) / acquired through business combinations
Balance at 30 June
2023
$’000
(14,405)
(5,009)
267
14,969
-
(4,178)
2022
$’000
1,456
(14,270)
(332)
(1,158)
(101)
(14,405)
63
Annual Report | 30 June 2023 B Performance for the year
B4
(D)
Income tax (Cont.)
Amounts recognised directly through equity
Hedging reserve
Share Capital (equity raising costs)
Total recognised directly through equity
2023
$’000
719
-
719
2022
$’000
(1,930)
1,408
(522)
(E)
Deferred tax assets and deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Receivables and contract assets
Inventories
Property, plant and equipment
Right-of-use assets
Intangible assets
Trade and other payables
Lease liabilities
Provisions – employee benefits
Provisions – other
Deferred income
Capitalised expenditure
Tax losses
Other items
Deferred tax assets / (liabilities) – before set-off
2023
$’000
235
295
2,568
-
56
1,961
94,911
10,738
10,067
-
1,472
15,536
262
138,101
2022
$’000
334
-
1,293
-
38
2,455
86,650
11,295
9,323
2,314
2,380
8,961
250
125,293
Set-off of tax
Net deferred tax assets / (liabilities) – after set-off
(117,354)
20,747
(104,351)
20,942
2023
$’000
2022
$’000
-
(212)
(1,829)
(88,916)
(49,892)
-
-
-
-
-
-
-
(266)
(141,115)
117,354
(23,761)
-
(816)
(1,687)
(79,930)
(54,500)
-
-
-
-
-
-
-
(2,048)
(138,981)
104,351
(34,630)
Balance at 1 July
Movement:
Adjustments for tax of prior periods
To profit or loss
Through equity
Balance at 30 June
(F)
Tax losses
125,293
120,672
(138,981)
(154,063)
134
11,955
719
138,101
(409)
5,552
(522)
125,293
(14)
(2,120)
-
(141,115)
2023
$’000
51,786
15,536
2,032
13,407
15,439
(314)
15,396
-
(138,981)
2022
$’000
29,869
8,961
2,032
12,264
14,296
4,632
4,289
Unused tax losses for which a deferred tax asset has been recognised
Unused revenue losses
Tax benefit @ 30%
Unused tax losses for which no deferred tax asset has been recognised
Unused revenue losses
Unused capital losses
Total unused tax losses
Potential tax benefit @ 30%
64
Notes to the Consolidated Financial Statements B4
(F)
Income tax (Cont.)
Tax losses (Cont.)
Critical accounting estimates and judgements – Recoverability of deferred tax assets
(i)
Significant judgement is required in determining the provision for income taxes. The Group has recognised deferred tax
assets relating to carried forward tax losses to the extent there are forecast future taxable profits relating to the same
taxation authority against which the unused tax losses can be utilised.
All unused tax losses can be carried forward indefinitely subject to the loss utilisation tests and have no expiry date.
The unused losses for which a deferred tax asset has been recognised represent revenue losses for the Company's
partially-owned subsidiary, Capital Smart Group Holdings Pty Ltd (refer to (G)). Management considers it probable that
future taxable profits would be available against which these tax losses can be recovered and, therefore, the related
deferred tax asset can be recognised.
The unused revenue losses for which no deferred tax asset has been recognised represent transferred revenue losses of the
Company and its wholly-owned Australian resident entities. Management has determined that a deferred tax asset should
not be recognised for these losses as they have restricted rates of utilisation.
The unused capital losses for which no deferred tax asset has been recognised represent capital losses of the Company and
its wholly-owned Australian resident entities. Management has determined a deferred tax asset on unused capital losses
should not be recognised on the basis that it is not probable that future capital gains would be available against which the
capital losses can be utilised.
Tax consolidation
(G)
The Company and its wholly-owned Australian resident entities formed a tax consolidated group with effect from
1 September 2006. AMA Group Limited is the head entity of the tax consolidated group and has assumed the current tax
liabilities of the members in its tax consolidated group.
The Australian resident entities of the Capital Smart Group of companies formed a separate tax consolidated group with
effect from 31 October 2019. Capital Smart Group Holdings Pty Ltd is the head entity of the tax consolidated group and has
assumed the current tax liabilities of the members in its tax consolidated group. The consolidated financial statements
incorporate the tax balances of both tax consolidated groups.
Income tax expense or benefit, deferred tax assets, and deferred tax liabilities arising from temporary differences of the
members of the tax consolidated groups are recognised by each subsidiary where the subsidiary would have been able to
recognise the deferred tax asset or deferred tax liability on a standalone basis.
The members of the tax consolidated groups have entered into tax funding agreements with each head entity which sets
out the funding obligations in respect of income tax amounts. The agreements require payments by the subsidiaries to the
head entity equal to the income tax liability assumed by the head entity. The head entity is required to make payments to
the subsidiaries equal to the current tax asset assumed by the head entity.
In respect of carried forward tax losses brought into the tax consolidated groups on consolidation by subsidiary members, the
head entity will pay the subsidiary member for such losses when these losses are transferred to the tax consolidated groups,
where the subsidiary member would have been entitled to recognise the benefit of these losses on a standalone basis.
Significant accounting policies
Income tax
Current and deferred tax expense is recognised in the profit or loss, except to the extent that it relates to items
recognised in other comprehensive income, or directly in equity.
Current tax
Current tax payable represents the amount expected to be paid to taxation authorities on taxable income for the
period, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable
in respect of previous periods.
Deferred tax
Deferred tax is calculated using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting and taxation purposes. Deferred tax is measured
at the rates that are expected to apply in the period in which the liability is settled, or asset realised, based on tax
rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition
(other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit or in relation to the initial recognition of goodwill.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the deductible temporary differences or unused tax losses and tax offsets can be utilised. Deferred
tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The benefit of intangible assets with an indefinite useful life will flow to the Group on an annual basis, therefore
the carrying amount will be recovered through use.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities, and they relate to income taxes levied by the same taxation authority and the same taxable entity.
65
Annual Report | 30 June 2023 B Performance for the year
C
ASSETS AND LIABILITIES
This section provides information about the working capital of the Group and major balance sheet items including the
accounting policies, judgements and estimates relevant in understanding these items.
C1 Receivables and contract assets
Receivables and contract assets predominantly consist of amounts owed to the Group by customers for sales of
goods and services in the ordinary course of business.
Trade receivables
Allowance for expected credit losses
Other receivables
Contract assets
2023
$’000
24,884
(304)
24,580
4,072
32,818
36,890
2022
$’000
34,133
(526)
33,607
1,491
32,330
33,821
Total receivables and contract assets
61,470
67,428
Allowance for expected credit losses on trade receivables
(A)
Current trade receivables of the Group were assessed for impairment at each reporting date. Movements in the allowance
for expected credit losses of receivables are set out below:
Balance at 1 July
Movement:
Additional expected credit losses recognised / (released)
Receivables written off / (written back) during the year as uncollectible
Balance at 30 June
2023
$’000
526
55
(277)
304
2022
$’000
304
307
(85)
526
Exposure to credit risk
(B)
The following table provides information about the exposure to credit risk and expected credit loses for trade receivables as
at 30 June 2023:
30 June 2023
$’000
1 - 30 days
31 - 60 days
61 - 90 days
More than 90 days
Total
Gross
carrying amount
Loss
allowance
Net
receivable
20,031
3,632
539
682
24,884
(57)
(71)
(10)
(166)
(304)
19,974
3,561
529
516
24,580
Fair value disclosure
(C)
Due to the short-term nature of these receivables, their carrying amount is considered to approximate their fair value.
For information about the methods and assumptions used in determining the fair value of the Groups receivables refer to
note D8(A)(i).
66
Notes to the Consolidated Financial Statements
C1
Receivables and contract assets (Cont.)
Risk exposure
(D)
Information concerning the credit risk of receivables is set out in note D8(C)(ii).
Significant accounting policies
Trade and other receivables
Trade and other receivables are recognised initially at fair value and are subsequently measured at amortised cost
using the effective interest method, less an allowance for expected credit loss. They generally have credit terms
ranging up to 30 days.
Allowance for expected credit losses on trade and other receivables
The Group assesses the expected credit losses associated with its trade and other receivables on a forward-looking
basis. The Group applies the simplified approach to measuring expected credit losses, which requires expected
lifetime losses to be recognised from initial recognition of the receivables. To measure the expected credit losses,
trade and other receivables that share similar credit risk characteristics and days past due are grouped and then
assessed for collectability as a whole.
Contract assets
The Group presents any unconditional rights to consideration separately as a receivable while those rights
arising from satisfaction of performance obligations in a contract are presented as contract assets. A right to
consideration is unconditional if only the passage of time is required before payment of that consideration is due.
Contract assets are measured at the actual amount of transaction price. No expected credit loss is recognised on
contract assets as the Group have security over the contract assets while the work is in progress.
C2 Inventories
Parts inventory
Provision for inventory obsolescence – parts
Consumables inventory
Provision for inventory obsolescence – consumables
Total inventories
2023
$’000
35,365
(1,059)
11,135
(984)
44,457
2022
$’000
28,686
(1,577)
14,581
(2,125)
39,565
The Group periodically assesses the value of items in inventory and records write-downs or write-offs based on its
assessment of slow moving or obsolete inventory. Allowances are recorded against finished goods for any such declines.
Comparative information has been re-presented to achieve consistency in disclosure with the current financial
period presentation.
Significant accounting policies
Inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less estimated costs of completion necessary to make the sale.
Assessments are made periodically by management for excess inventories, obsolescence and decline in net
realisable value below cost. Allowances are recorded against inventories for any such declines based on historical
experience on obsolescence and slow-moving inventory.
Costs incurred in bringing each product to its present location and condition are determined after deducting
rebates and discounts received or receivable and are accounted for, as follows:
■ Consumables inventory – purchase cost on a first-in / first-out basis
■ Parts inventory – cost comprises direct materials and direct labour (for reclaimed parts only)
67
Annual Report | 30 June 2023 C Assets and liabilities C3 Other financial assets
Other financial assets consist of loans provided to a former related party and other employees and derivative
financial instruments.
Other financial assets
Current
Loans provided to a former related party and other employees
Derivative – financial instrument
Total current
Non-current
Derivative – financial instrument
Total non-current
Total other financial assets
2023
$’000
2022
$’000
1,592
-
1,592
-
-
1,460
1,607
3,067
5,212
5,212
1,592
8,279
Loans provided to a former related party and other employees
(A)
Employee loans outstanding at the end of the current and prior year include a loan to the former Group CEO and Executive
Director, Andrew Hopkins. For further information refer to note F2(D).
Derivatives
(B)
The Group uses derivatives in the normal course of business in order to hedge exposure to fluctuation in interest rates.
In accordance with the Group’s financial risk management policies, the Group does not hold or issue derivatives for
trading purposes.
The Group entered into interest rate swap contracts to fix the interest rate at 0.43% (excluding margin and line fees) on
$193,500,000 of borrowings (which represented approximately 80% of floating rate borrowings at the time of entering into the
derivatives). Interest is payable based on a margin over bank bill swap rate. The swap contract matures on 30 October 2024
(with a step-down to 60% on 30 October 2022). During the year the Group closed out this interest rate swap prior to its
maturity in advance of refinancing debt.
Significant accounting policies
Loans provided to related parties
Loans provided to related parties are recognised initially at fair value plus transaction costs and, in subsequent
period are stated at amortised cost. The Group has not applied any expected credit loss to these loans at
30 June 2023 as it expects them to be fully recoverable.
C4 Other assets
Acquisition deposits
Accrued income
Prepayments and other assets
Total other assets
2023
$’000
300
5,692
8,477
14,469
2022
$’000
300
1,334
6,186
7,820
68
Notes to the Consolidated Financial Statements
C5 Property, plant and equipment
Property, plant and equipment represents the investment by the Group in tangible assets.
Leasehold
improvements
$’000
Plant and
equipment
$’000
Furniture
and fittings
$’000
1 July 2021
Cost
Accumulated depreciation and impairment
Net book amount
Movement:
Additions
Depreciation
Impairment
Effect of foreign exchange
Closing net book amount
1 July 2022
Cost
Accumulated depreciation and impairment
Net book amount
Movement:
Additions
Disposals
Depreciation
Impairment
Effect of foreign exchange
Closing net book amount
33,995
(22,821)
11,174
1,533
(2,758)
(3,327)
(14)
6,608
29,256
(22,648)
6,608
314
(701)
(1,477)
(34)
7
4,717
143,568
(87,941)
55,627
3,578
(12,934)
(4,315)
(48)
41,908
127,589
(85,681)
41,908
8,491
(397)
(9,614)
(2,370)
31
38,049
2023
Cost
Accumulated depreciation and impairment
Net book amount
27,452
(22,735)
4,717
129,045
(90,996)
38,049
5,495
(2,973)
2,522
413
(904)
(420)
(1)
1,610
4,369
(2,759)
1,610
501
(182)
(912)
(22)
-
995
4,188
(3,193)
995
Motor
vehicles
$’000
6,628
(3,222)
3,406
551
(817)
(253)
-
2,887
Total
$’000
189,686
(116,957)
72,729
6,075
(17,413)
(8,315)
(63)
53,013
6,574
(3,687)
2,887
167,789
(114,776)
53,013
915
(250)
(833)
(1)
-
2,718
10,221
(1,530)
(12,836)
(2,427)
38
46,479
6,728
(4,010)
2,718
167,413
(120,934)
46,479
Property, plant and equipment are reviewed for impairment in accordance with AASB 136 Impairment of Assets. During
the year, the Group recognised an impairment charge of $2,427,000 (2022: $8,315,000) relating to the carrying amount
of property, plant and equipment. The impairment charge is on assets which are no longer expected to generate future
economic benefits primarily due to closure of sites.
Disposal of business
(A)
On 2 December 2022 AMA Group divested the FluidDrive business under an asset sale agreement. The result for the current
period includes profit after tax of $0.3 million from this business earned from 1 July 2022 up until the date of disposal.
Accounting for the disposal resulted in a loss as follows:
Proceeds from sale
Legal fees
Net proceeds from sale
Goodwill
Property, plant and equipment
Inventories
Right of use assets
Other assets and liabilities
Transaction costs
Loss on disposal
Notes
C6
C7
Total
$’000
2,450
(22)
2,428
(1,460)
(245)
(1,293)
(376)
1,023
(140)
(63)
69
Annual Report | 30 June 2023 C Assets and liabilities
C5
Property, plant and equipment (Cont.)
Significant accounting policies
Property, plant and equipment
Each class of property, plant and equipment is carried at cost less any accumulated depreciation. Cost includes
expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset
is derecognised when replaced. All other repairs and maintenance are charged to the profit or loss during the
reporting period in which they are incurred.
Depreciation
Assets are depreciated from the date the asset is brought to use, or in business combinations, the date of
acquisition. Depreciation is calculated on a straight line basis as considered appropriate to write off the net cost of
each item of plant and equipment over its expected useful life to the Group.
The expected useful lives are as follows:
■ Plant and equipment: 2 to 15 years
■ Motor vehicles: 4 to 8 years
■ Furniture and fittings: 2 to 10 years
■ Leasehold improvements: 5 to 15 years
The cost of improvements to or on leasehold properties is amortised over the unexpired life of the lease or the
estimated useful life of the improvement to the Group, whichever is the shorter.
Where items of plant and equipment have separately identifiable components which are subject to regular
replacement, those components are assigned useful lives distinct from the item of plant and equipment to
which they now relate.
The depreciation rates are reviewed annually and adjusted if appropriate. An asset’s carrying amount is written
down to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Derecognition
An item of property, plant and equipment is derecognised when it is disposed of or no future economic benefits
are expected from its use or disposal. Gains and losses on disposals are determined by comparing proceeds with
the carrying amount and are recognised in the profit or loss.
Impairment
The carrying amounts of the Group’s property, plant and equipment are reviewed for impairment where there is
an indication that the asset may be impaired (assessed at least each reporting date) or when there is an indication
that a previously recognised impairment may need to be reversed.
70
Notes to the Consolidated Financial Statements C6 Intangible assets
Intangible assets represent goodwill, customer contracts, other intangibles and software. Goodwill arises when the
Group acquires a business where consideration exceeds the fair value of net assets acquired and represents the
future benefits expected to arise from the purchase.
(A)
Net book amounts and movements in intangible assets
Customer
contracts
$’000
Other
intangibles
$’000
Software
$’000
Total
$’000
1 July 2021
Cost
Accumulated amortisation and impairment
Net book amount
Movement:
Additions and adjustments
Amortisation
Impairment
Closing net book amount
Goodwill
$’000
499,456
(150,247)
349,209
(136)
-
(80,700)
268,373
240,043
(41,443)
198,600
-
(16,707)
-
181,893
1 July 2022
Cost
Accumulated amortisation and impairment
Net book amount
500,333
(231,960)
268,373
240,043
(58,150)
181,893
Movement:
Additions and adjustments
Amortisation
Disposal of business
Impairment
Closing net book amount
(230)
-
(1,460)
(110,372)
156,311
-
(15,490)
-
-
166,403
2023
Cost
Accumulated amortisation and impairment
Net book amount
496,996
(340,685)
156,311
240,043
(73,640)
166,403
2,400
(408)
1,992
10
(241)
-
1,761
2,410
(649)
1,761
-
(240)
-
-
1,521
2,396
(875)
1,521
7,874
(5,763)
2,111
799
(775)
-
2,135
749,773
(197,861)
551,912
673
(17,723)
(80,700)
454,162
6,949
(4,814)
2,135
749,735
(295,573)
454,162
74
(656)
-
-
1,553
(156)
(16,386)
(1,460)
(110,372)
325,788
7,023
(5,470)
1,553
746,458
(420,670)
325,788
Goodwill
(B)
For the purpose of impairment testing, goodwill acquired through business combinations is allocated to each of the Group’s
CGUs (or group of CGUs) and represents the lowest level within the Group at which management monitors goodwill.
Allocation of goodwill to groups of cash-generating units
(i)
Goodwill has been allocated to the Group’s CGU’s as follows:
Reporting segment
Vehicle Collision Repairs
Heavy Motor
Supply
Total goodwill
CGU
Capital S.M.A.R.T
AMA Collision
Heavy Motor
Fluid Drive
2023
$’000
-
113,131
43,180
-
156,311
2022
$’000
57,970
165,763
43,180
1,460
268,373
71
Annual Report | 30 June 2023 C Assets and liabilities C6
(B)
Intangible assets (Cont.)
Goodwill (Cont.)
Impairment testing of goodwill
(ii)
Goodwill is assessed for impairment on an annual basis, or more frequently when there is an indication that the CGU to
which it belongs may be impaired. Where indicators exist, impairment testing is undertaken by comparing the carrying and
recoverable amounts of goodwill. Impairment losses are recognised in the profit or loss when carrying amounts are higher
than recoverable amounts.
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use.
The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing fair value less costs of disposal, the estimated future cash flows are discounted to their present value using a
post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can
be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted
share prices for publicly traded companies or other available fair value indicators.
In FY23, the Group impaired Capital S.M.A.R.T goodwill to zero following the conclusion of repricing negotiations and
contract mechanism clarifications. The impairment loss reflects a more modest outcome for Capital S.M.A.R.T pricing
compared to the prior forecast, with the higher cost, labour constrained environment also challenging operating margins.
In FY23, the Group impaired the AMA Collision CGU goodwill by $52.6 million as a result of an update to the recoverable
amount based on assumptions detailed below. The impairment loss arose due to assumptions updated for more
modest pricing outcomes and higher costs resulting in margin pressure as well as lower production capacity following
FY23 network optimisation.
Key assumptions used in the calculation of the recoverable amount
(iii)
The Group’s annual impairment testing is performed using the fair value less costs of disposal methodology. The recoverable
amount was determined using a discounted cash flow (DCF) model. This was based on the present value of cash flow
projections over a five-year period with the period extending beyond five years extrapolated using an estimated growth rate.
The value assigned to key assumptions represent management’s assessment of future trends in the industry and are based
on historical data from both external and internal sources. The approach and key assumptions used in the calculation of the
recoverable amount are summarised in the following table:
Assumption
Approach used to determine values
Post-tax
discount rate
The discount rate is a post-tax measure which incorporates risks associated with each CGU. In
performing the fair value less costs of disposal calculations for each CGU, the Group has applied post-tax
discount rates to discount the forecast post-tax cash flows.
FY24 (Year 1)
EBITDA
FY25 to FY28
EBITDA
Terminal
growth rate
FY24 EBITDA is derived from the Board approved budget.
FY25 to FY28 EBITDA is calculated using an EBITDA growth rate based on past experience. The Group's
forecasts are based on expectations of market demand and past experience. The average EBITDA
growth rate for FY25 to FY28 approximates 2.5%.
The terminal growth rate is used to extrapolate cash flows beyond the forecast period. The terminal
value is calculated using a perpetual growth model. The terminal growth rate was determined based on
management's estimate of the long-term compound annual EBITDA growth rate, consistent with the
assumptions that a market participant would make.
AASB 16
Leases impact
EBITDA used in the discounted cashflow model includes rental payments. Right-of-use assets and lease
liabilities have been included in the carrying value of the CGU.
The goodwill allocated to the CGU’s, and the values assigned to a number of key assumptions are as follows:
CGU
Terminal growth rate
(%)
Pre-tax discount rate
(%)
Year 1 EBITDA growth rate
(%)
AMA Collision
Heavy Motor
Capital S.M.A.R.T
2023
2.5
2.5
2.5
2022
2.5
2.5
2.5
2023
12.3
12.3
11.1
2022
11.6
11.6
11.6
2023
14
25
143 1
2022
11
22
13
1 Capital S.M.A.R.T EBITDA increase as a result of resetting of FY24 price, including transitional amount. If excluded, Year 1 growth would be flat. Refer to F6 for
further details.
Critical accounting estimates and judgements – Estimation of recoverable amounts of assets and CGUs
(iv)
Determining whether goodwill is impaired requires an estimation of the value in use or fair value less cost of disposal of
the cash-generating units to which goodwill has been allocated. The Group’s impairment testing estimates the future cash
flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value of
those cash flows.
72
Notes to the Consolidated Financial Statements C6
(B)
Intangible assets (Cont.)
Goodwill (Cont.)
Significant estimate: impact of possible changes in key assumptions
(v)
Management assessed whether any CGU for which the carrying amount of goodwill is significant could be impaired as a result
of a possible change in a key assumption and the following table provides quantitative information illustrating the impact of
possible changes in key assumptions (with all other inputs remaining the same). The Heavy Motor CGU has sufficient headroom
that there was no impairment from the assessment undertaken. The Capital S.M.A.R.T goodwill balance was fully impaired and
therefore the CGU has no goodwill or indefinite life intangible assets. However, given partial impairment has been recognised
for the AMA Collision CGU, any adverse change in assumptions would lead to further impairment. The following impairments
would be recognised by a change in key assumption for this CGU:
■ 1% increase in discount rate
$12,480,000
■ 1% decrease in terminal growth rate
$10,780,000
■ 10% decrease in EBITDA
$20,810,000
Significant accounting policies
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost and subsequently measured
at cost less accumulated amortisation and impairment losses. Where acquired in a business combination, cost
represents the fair value at the date of acquisition.
Intangible assets with finite lives are amortised on a straight-line basis over their estimated useful lives and tested
for impairment whenever there is an indication that they may be impaired. The amortisation period and method
are reviewed at each financial year-end. Intangible assets with indefinite lives are tested for impairment in the
same way as goodwill.
Goodwill
Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the
business combination less the net fair value of the acquired and identifiable assets, liabilities and contingent
liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
If fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group
recognises the gain in the profit or loss.
Customer contracts
Customer contracts are recognised at cost, being fair value at the date of acquisition. Customer contracts have a
finite life and are carried at cost less accumulated amortisation and any impairment losses. Customer contracts
are amortised over the lesser of the remainder of the contract or their estimated useful life relevant to each specific
contract. The Group amortises customer contracts using the straight-line method over a period of 15 years.
Other intangibles
Other intangibles consist of customer relationships, brands, patents and trademarks and are recognised at
cost, being fair value at the date of acquisition. These intangibles have a finite life and are carried at cost less
accumulated amortisation and any impairment losses. The Group amortises other intangibles using the
straight- line method over 10 years.
Software
Costs associated with maintaining software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by the group are recognised as intangible assets. Costs associated with the configuration of
third party controlled software are recognised as an expense as incurred.
Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate
portion of relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the
asset is ready for use.
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units).
Non-financial assets other than goodwill previously impaired are reviewed for possible reversal of the impairment
at the end of each reporting period.
73
Annual Report | 30 June 2023 C Assets and liabilities C7 Right-of-use assets and lease liabilities
The Group leases various offices, warehouses, site premises, equipment and vehicles. Lease terms are negotiated
on an individual basis and contain a wide range of different terms and conditions including extension options.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset
is available for use by the Group.
The Group’s leasing activities
(A)
Property leases are generally non-cancellable with rent payable monthly in advance. Contingent rental provisions within
lease agreements generally require minimum lease payments be increased by CPI or a percentage factor. Certain
agreements have option arrangements to renew the lease for additional terms.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices.
The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the
lessor. Leased assets may not be used as security for borrowing purposes.
Amounts recognised in the Consolidated Statement of Financial Position
(B)
The Consolidated Statement of Financial Position includes the following amounts relating to leases:
Right-of-use assets
Leased properties
Leased equipment and motor vehicles
Total right-of-use assets
Lease liabilities
Current
Non-current
Total lease liabilities
2023
$’000
2022
$’000
296,156
28
296,184
31,000
285,988
316,988
266,810
79
266,889
34,076
255,227
289,303
The total additions to right-of-use assets for the year ended 30 June 2023 were $73,917,000 (30 June 2022: $54,981,000).
Refer to Note C7(E) on the following page.
Amounts recognised in the Consolidated Statement of Comprehensive Income
(C)
The Consolidated Statement of Comprehensive Income shows the following amounts relating to leases:
Depreciation charge on right-of-use assets
Leased properties
Leased equipment and motor vehicles
Make good
Total
Impairment expense
Interest expense (included in finance costs)
COVID-19 rent concession (included as a benefit in occupancy expenses) 1
Expense relating to short-term leases (included in occupancy expenses)
Expense relating to leases of low-value assets (included in occupancy expenses)
Total
2023
$’000
34,158
51
7,929
42,138
4,031
19,015
-
1,413
94
24,553
2022
$’000
38,388
103
5,127
43,618
16,498
18,269
(525)
885
53
35,180
1 The Group has elected to apply the practical expedient to assess whether a COVID-19-related rent concession is a lease modification.
Amounts recognised in the Consolidated Statement of Cash Flows
(D)
The total cash outflow for leases for the year ended 30 June 2023 was $50,902,000 (30 June 2022: $50,800,000) including
$5,880,000 on impaired leases.
74
Notes to the Consolidated Financial Statements
C7
(E)
Right-of-use assets and lease liabilities (Cont.)
Net book amounts and movements in right-of-use assets
Leased
properties
$’000
Leased
equipment and
motor vehicles
$’000
1 July 2021
Cost
Accumulated depreciation and impairment
Net book amount
Movement:
Additions
Disposals
Depreciation
Modification to lease terms
Variable lease payments reassessment
Impairment
Effect of foreign exchange
Net book amount
1 July 2022
Cost
Accumulated depreciation and impairment
Net book amount
Movement:
Additions
Disposals
Disposal of business
Depreciation
Modification to lease terms
Variable lease payments reassessment
Impairment
Effect of foreign exchange
Net book amount
2023
Cost
Accumulated depreciation and impairment
Net book amount
384,570
(77,879)
306,691
54,981
-
(43,515)
(37,429)
2,869
(16,498)
(289)
266,810
385,645
(118,835)
266,810
73,917
(13,083)
(376)
(42,087)
2,132
12,790
(4,031)
84
296,156
425,220
(129,064)
296,156
553
(367)
186
-
(2)
(103)
(2)
-
-
-
79
220
(141)
79
-
-
-
(51)
-
-
-
-
28
123
(95)
28
Total
$’000
385,123
(78,246)
306,877
54,981
(2)
(43,618)
(37,431)
2,869
(16,498)
(289)
266,889
385,865
(118,976)
266,889
73,917
(13,083)
(376)
(42,138)
2,132
12,790
(4,031)
84
296,184
425,343
(129,159)
296,184
Short-term leases and leases of low-value assets
(F)
The Group applies the recognition exemptions to its short-term and low-value leases of property, equipment and motor
vehicles. Short-term leases are leases with a lease term of 12 months or less. Lease payments on short-term leases and leases
of low-value assets are recognised as an expense on a straight-line basis over the lease term.
Extension and termination options
(G)
Extension and termination options are included in a number of property and equipment leases across the Group.
These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and
termination options held are exercisable only by the Group and not by the respective lessor.
75
Annual Report | 30 June 2023 C Assets and liabilities C7
Right-of-use assets and lease liabilities (Cont.)
Critical accounting estimates and judgements – Estimation of lease term
(H)
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
In determining the lease term, the Group applies judgement and considers all facts and circumstances that create an
economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after
termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
At the end of each lease term, the Group assumes the lease arrangements will be automatically renewed beyond the
non-cancellable period. The lease will remain in effect until one of the parties gives notice to terminate with no more than
an insignificant penalty.
The initial lease term assessment is reviewed if a significant event or a significant change in circumstances occurs which
affects this assessment and that is within the control of the lessee.
Significant accounting policies
Lease liabilities
At commencement date of the lease, the Group recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments (including in
substance fixed payments) less any lease incentives receivable and variable lease payments that depend on an
index or rate. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group
exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are
recognised as an additional right-of-use asset and lease liability in the period on which the event or condition
that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the
lease commencement date as the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in
the assessment to purchase the underlying asset.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses and adjusted for any remeasurement of lease liabilities.
The cost of the right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received.
The recognised right-of-use assets are depreciated on a straight-line basis over the shorter of useful life and
the lease term.
Right-of-use assets are tested for impairment which replaces the previous requirement to recognise a provision
of onerous lease contracts. Any identified impairment loss is accounted for in line with the Group's accounting
policy for property, plant and equipment which is set out in note C5.
76
Notes to the Consolidated Financial Statements C8 Trade and other payables
Trade and other payables mainly consist of amounts owing to the Group's suppliers that have been invoiced or accrued.
Trade payables
Accrued expenses
Payroll and statutory liabilities
Other payables
Total trade and other payables
2023
$’000
64,447
33,666
13,202
126
111,441
2022
$’000
74,631
30,746
8,736
2,357
116,470
Fair value disclosure
(A)
Due to the short-term nature, the carrying amount of trade and other payables is considered to approximate their fair value. For
information about the methods and assumptions used in determining the fair value of the Group’s payables refer to note D8(A)(i).
Significant accounting policies
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. The amounts are unsecured and are usually paid within 30-45 days of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the
reporting date. Other payables not due within a year are measured less cumulative amortisation calculated using
the effective interest method. The carrying amounts of trade and other payables are considered to be the same
as their fair values, due to their short-term nature.
C9 Other liabilities
Current
Market incentive
Deferred revenue
Total current
Non-current
Market incentive
Total non-current
Total other liabilities
2023
$’000
2,375
1,084
3,459
38,079
38,079
2022
$’000
14,119
633
14,752
33,841
33,841
41,538
48,593
(A) Market incentive
In a previous financial year, the Group entered into an agreement with a key supplier to purchase the supplier’s products
on an exclusive basis over an agreed period of time. In exchange for this exclusive arrangement, and subject to certain
conditions, the Group receives preferential benefits including the upfront payment of the market incentive and the ongoing
competitive price of the products. During FY23, this arrangement was modified to remove future market incentive tranche
funding and replaced it with a monthly cash rebate, while amortising the existing market incentive over a longer period
at a reduced rate. This revised agreement was effective from 1 January 2023, meaning that the current portion of market
incentive has been reduced to reflect the lower amortisation rate.
The incentive is being amortised based on a percentage of the purchased product. Termination of the arrangement by the
Company, or the occurrence of an event of default requires the Company to repay all unamortised balances.
As at 30 June 2023, an amount of $2,375,000 (30 June 2022: $14,119,000) has been classified as current representing the
anticipated reduction in this incentive over the next twelve months.
A reconciliation of the movement of the market incentive liability is set out below:
Balance at 1 July
Movement:
Offset against inventory
Charged to profit or loss – raw materials and consumables used
Balance at 30 June
2023
$’000
47,960
(97)
(7,409)
40,454
2022
$’000
60,800
(20)
(12,820)
47,960
77
Annual Report | 30 June 2023 C Assets and liabilities
C10 Provisions
Provisions are a liability recorded when there is uncertainty over the timing or amount that will be paid but the
expected settlement amount can be reliably estimated by the Group. The main provisions held are in relation to
employee benefits and make good onsite premises.
Current
Annual leave
Long service leave
Make good
Other
Total current
Non-current
Long service leave
Make good
Total non-current
Total provisions
Carrying amounts and movements in provisions
(A)
Movements in make good and other provisions during the financial year are set out below:
2023
$’000
19,942
13,337
2,198
854
36,331
2,544
29,198
31,742
2022
$’000
21,364
13,471
7,091
667
42,593
2,843
22,449
25,292
68,073
67,885
Other
$'000
288
Make good
$’000
7,615
379
-
-
-
667
854
(288)
-
(379)
-
854
22,388
(85)
309
(687)
29,540
9,293
(4,482)
1,486
(4,519)
78
31,396
Total
$’000
7,903
22,767
(85)
309
(687)
30,207
10,147
(4,770)
1,486
(4,898)
78
32,250
Balance at 1 July 2021
Movement:
Additional provisions recognised
Unused amounts reversed
Unwind of discount
Amounts used during the year
Balance at 30 June 2022
Movement:
Additional provisions recognised
Unused amounts reversed
Unwind of discount
Amounts used during the year
Effect of foreign exchange
Balance at 30 June 2023
78
Notes to the Consolidated Financial Statements
C10 Provisions (Cont.)
(A)
Carrying amounts and movements in provisions (Cont.)
Significant accounting policies
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events,
it is probable the Group will be required to settle the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leave and
leave loading that are expected to be settled wholly within 12 months after the end of the period in which
the employees render the related service, are recognised in respect of employees’ services up to the end of
the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
The short-term employee benefit obligations are recognised in the provision for employee benefits.
The current provision for employee benefits includes accrued annual leave and long service leave.
Long service leave includes all unconditional entitlements where employees have completed the
required period of service. Employee benefits are presented as current, since the Group does not have
an unconditional right to defer settlement. However, based on past experience, the Group does not
expect all employees to take the full amount of accrued leave within the next 12 months (approximately
70% of current annual leave and 25% of current long service leave would be expected to be used within
the next 12 months).
Other long-term employee benefit obligations
The liability for long service leave that are not expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service, are measured as the present value
of expected future payments to be made in respect of services provided by employees up to the reporting
date at present value.
Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service.
The non-current employee benefit represents a long-service leave provision which covers conditional
entitlements where employees have not completed their required period of service, adjusted for the
probability of likely realisation.
Make good
The Group is required to restore the leased premises of its sites to their original condition at the end of the
respective lease terms. A provision has been recognised for the present value of the estimated expenditure
required to remove any leasehold improvements. These costs have been capitalised as part of the cost of
right-of-use asset and are depreciated over the shorter of the term of the lease and the useful life of the assets.
(B)
Critical accounting estimates and judgements – Estimation of make good provisions
Make good
As part of its obligations under the lease agreements for each of its sites, the Group is required to restore the leased premises
to their original condition at the end of the respective lease terms. The estimated expenditure required to remove any
leasehold improvements is based on amounts specified in the lease agreement or, in the absence of specific amounts,
historical experience for sites with similar characteristics including size and the number of installations. The calculations
to discount these amounts to their present value are based on the expected payments at the end of the lease term, the
determination of which requires judgement (refer to C7(H) for further information).
79
Annual Report | 30 June 2023 C Assets and liabilities D
CAPITAL STRUCTURE, FINANCING AND
FINANCIAL RISK MANAGEMENT
Capital and financial risk management provides information about the capital management practices of the Group,
shareholder returns for the year and discusses the Group's exposure and management to various financial risks.
D1 Capital management
This section provides a summary of the capital management activities of the Group during the period. The Group
manages its capital structure with the objective of enhancing long-term shareholder value through funding its
business at an optimised weighted average cost of capital.
The Group’s objectives when managing capital are to:
■ safeguard its ability to continue as a going concern, so as to provide returns for shareholders and benefits for
other stakeholders, and
■ maintain an optimal capital structure to reduce the cost of capital.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. The gearing ratio
has been calculated with reference to net senior debt which is presented in accordance with the requirements of the
syndicated facility agreement.
The Group’s capital includes ordinary share capital, financial liabilities at amortised cost (drawn facilities), cash and cash
equivalents and 50% of the cash portion of any outstanding contingent vendor consideration (consistent with the
calculation for debt covenants under the syndicated facility agreement).
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares, secure additional financing, restructure operations or sell assets to reduce
debt. This is decided on the basis of maximising shareholder returns over the long term.
Net debt
Financial liabilities – drawn cash facilities
PIK interest capitalised
Contingent vendor consideration – 50% of cash portion
Cash and cash equivalents
Net senior debt used in covenant calculations
Convertible notes (face value)
Net debt
Fully paid ordinary shares
Quoted (at market price) 1
Unquoted (at issue price)
Total fully paid ordinary shares
Total capital
Gearing Ratio
Gearing Ratio (net senior debt)
Notes
D7(A)
D7(A)
D6
D7(B)
D4(A)
2023
$’000
2022
$’000
165,000
1,042
-
(28,874)
137,168
50,000
187,168
107,307
-
107,307
294,475
63.6%
46.6%
165,000
-
1,220
(52,189)
114,031
50,000
164,031
182,072
1,611
183,683
347,714
47.2%
32.8%
1 Fully Paid Ordinary Shares Quoted value has been calculated using the closing share prices as at 30 June each year.
80
Notes to the Consolidated Financial Statements
D2 Earnings / (loss) per share
Earnings / (loss) per share presents the amount of profit / (loss) generated for the reporting period attributable to
shareholders divided by the weighted average number of shares on issue. The potential for any share rights issued
by the Group to dilute existing shareholders' ownership when the share rights are exercised are also presented.
The convertible notes have no dilution effect on earnings per share.
Profit / (loss) attributable to the ordinary equity holders of the Company
Weighted average number of ordinary shares used as denominator in calculating both
basic and diluted earnings / (loss) per share
2023
$’000 / Number
2022
$’000 / Number
(144,448)
1,072,931,491 1
(144,214)
955,285,449
Basic and diluted earnings / (loss) per share
(13.46)
(15.10)
1 For information about the movements in ordinary shares refer to note D4(B).
D3 Dividends
Dividends are distributions of the Group's profit after tax to shareholders and represent one of the ways the Group
distributes returns to its shareholders.
No dividends have been declared or paid in the current and previous year.
Franking credit balance
Franking credits available for subsequent reporting period based on tax rate of 30%
2023
$’000
19,238
2022
$’000
32,462
The above amounts represent the balances of the franking account as at the end of the financial year, adjusted for:
■ franking credits that will arise from the payment of the amount of the provision for income tax;
■ franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
■ franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The balance of franking credits decreased during the period as a result of a $15.3 million tax receipt following submission of
the FY22 tax return. Carry-back rules enabled the cash recovery of losses made in FY22, effectively representing the refund
of previous income tax paid. The Group expects the franking credit balance to further decrease during FY24 due to the
receipt of a refund of tax receivable (refer to Note B4(C)) which will generate a franking debit resulting in a new balance of
approximately $15.1 million.
81
Annual Report | 30 June 2023 D Capital structure, financing and financial risk management D4 Contributed equity
Contributed equity represents the number of ordinary shares on issue. A reconciliation is presented to show the
movement in ordinary shares on issue.
(A)
Ordinary share capital
Fully paid ordinary shares
Quoted
Unquoted
Total share capital
(B)
Movements in ordinary shares
Quoted
Opening balance
Equity raising
Employee share issue 1
Vendor share issue
Convert from unquoted shares 2
Share buy-back
Transaction costs, net of tax
Total quoted
Unquoted
Opening balance
Convert to quoted shares 2
Total unquoted
2023
Shares
1,073,070,217
-
1,073,070,217
2023
$’000
2022
Shares
533,190
-
1,071,009,343
1,642,329
533,190
1,072,651,672
2022
$’000
529,893
1,611
531,504
2023
Shares
2023
$’000
2022
Shares
2022
$’000
1,071,009,343
-
418,545
-
1,642,329
-
-
1,073,070,217
529,893
-
1,727
-
1,611
-
(41)
533,190
743,063,799
266,616,996
9,710,433
48,573,966
4,497,600
(1,453,451)
-
1,071,009,343
1,642,329
(1,642,329)
-
1,611
(1,611)
-
6,139,929
(4,497,600)
1,642,329
419,404
99,981
3,438
6,768
3,389
-
(3,087)
529,893
5,000
(3,389)
1,611
Total share capital
1,073,070,217
533,190
1,072,651,672
531,504
1 Represents shares issued to a senior executive upon satisfaction of vesting conditions for service rights issued under the Group’s Employee Equity Plan and
employee benefits grant. Service rights were granted in lieu of fixed remuneration. No performance condition other than ongoing employment is attached to
the service rights. The Group uses the Black Scholes pricing methodology to measure the fair value of the service rights. The fair value per service right at grant
date was $0.56. Employee benefits grant represents a vendor earn out for continuing employment for a three year period. This amount is recognised as prepaid
employment services and unwound to employee benefits expense over the employment contract.
2 Unquoted shares were converted to quoted shares following completion of restriction period associated with previous acquisition.
Significant accounting policies
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the
issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as
part of the purchase consideration.
Quoted Fully Paid Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up
the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every
holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote and, upon a poll, each
share is entitled to one vote.
82
Notes to the Consolidated Financial Statements D5 Other reserves
Other reserves represents the cumulative gains or losses that have been recognised in the Consolidated Statement
of Comprehensive Income.
Share-based payments
Foreign currency translation
Cash flow hedge
Total other reserves
The nature and purpose of each reserve is as follows:
2023
$’000
1,564
(8)
3,096
4,652
2022
$’000
290
(10)
4,865
5,145
Share-based payments reserve
(i)
The share-based payments reserve is used to recognise the fair value of equity-settled share-based payments issued to
employees, including key management personnel, as part of their remuneration. Equity instrument disclosures relating to
key management personnel can be found in note F1 and within the Remuneration Report.
Foreign currency translation reserve
(ii)
The foreign currency translation reserve is used to recognise foreign currency translation differences arising on the
translation of financial statements of the Group’s foreign entities into Australian Dollars.
Cash flow hedge reserve
(iii)
Records fair value movements in cash flow hedging instruments to the extent the cash flow hedges are deemed effective.
The balance is reclassified to net profit when the transaction to which the hedge is linked (such as the recognition of interest
expense) affects the profit and loss. Ineffective portions of cash flow hedges are recognised in net profit immediately.
Significant accounting policies
Cash flow hedge
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair
value of the derivative is recognised in the Consolidated Statement of Comprehensive Income and accumulated in
the hedging reserve. Any ineffective portion of changes in the fair value of the derivative is immediately charged to
the profit or loss within finance costs.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or
exercised, or the designation is revoked, the hedge accounting is discontinued prospectively. If the forecast
transaction is no longer expected to occur, then the amount accumulated in equity is recognised in the profit or loss.
If the forecast transaction is yet to occur, the cash flow hedge reserve will be released to the profit or loss on a
systematic basis over the original maturity of the hedge.
83
Annual Report | 30 June 2023 D Capital structure, financing and financial risk management
D6 Cash and cash equivalents
This section presents cash and cash equivalents in the Consolidated Statement of Financial Position and a
reconciliation of the Group's profit for the period to net cash flows provided by operating activities.
(A)
Cash and cash equivalents as presented in the Consolidated Statement of
Financial Position
Cash at bank and cash equivalents
2023
$’000
28,874
2022
$’000
52,189
(B)
Reconciliation of loss before income tax to net cash (outflows)/inflows from
operating activities
Loss for the period
Adjustment for:
Non-cash market incentive
Non-cash employee remuneration
Fair value adjustments
Amortised borrowing costs
Depreciation and amortisation
Impairment
Loss on sale of business
Other
Income tax benefit
Income tax paid
Total adjustments
(Increase) / decrease in assets:
Receivables and contract assets
Inventories
Other assets
Total decrease in assets
Increase / (decrease) in liabilities:
Trade and other payables
Provisions
Other liabilities
Total (decrease) / increase in liabilities
2023
$’000
2022
$’000
(146,806)
(148,008)
(7,409)
2,007
(654)
2,496
71,360
116,830
63
(6,047)
(14,467)
14,969
179,148
5,958
(4,892)
(5,782)
(4,716)
(5,029)
(4,928)
(98)
(10,055)
(12,820)
3,515
(13,729)
3,184
78,754
105,513
-
(1,406)
(34,818)
(1,158)
127,035
5,484
(7,212)
(1,801)
(3,529)
(17,005)
(236)
13,512
(3,729)
Net cash inflows / (outflows) from operating activities
17,571
(28,231)
84
Notes to the Consolidated Financial Statements
D6
Cash and cash equivalents (Cont.)
Changes in liabilities arising from financing activities
(C)
The following table provides a reconciliation between opening and closing balances on the face of the Consolidated
Statement of Financial Position arising from financing activities.
Lease liabilities
Borrowings
Total liabilities from
financing activities
2023
$'000
2022
$'000
2023
$'000
2022
$'000
2023
$'000
2022
$'000
Balance at 1 July
289,303
326,918
205,088
234,751
494,391
561,669
Movement:
Cash inflows
Apportionment of convertible
note to equity
Cash outflows – principal
Cash outflows – borrowing costs
PIK interest capitalised
Non-cash additions/(disposals)
Balance at 30 June
-
-
(31,887)
-
-
59,572
316,988
-
-
(32,531)
-
-
(5,084)
-
-
-
-
1,042
2,820
289,303
208,950
50,000
(5,197)
(72,500)
(6,006)
-
4,040
205,088
-
-
(31,887)
-
1,042
62,392
525,938
50,000
(5,197)
(105,031)
(6,006)
-
(1,044)
494,391
Significant accounting policies
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
For the purpose of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and
short-term deposits, as defined above.
85
Annual Report | 30 June 2023 D Capital structure, financing and financial risk management
D7 Other financial liabilities
This section provides a summary of the capital management activity of the Group during the period, including
the Group's borrowings. The Group manages its liquidity requirements with a bank loan and interest rate swap.
Current
Contingent vendor consideration
Bank loan, net of capitalised borrowing costs 1
Total current
Non-current
Bank loan, net of capitalised borrowing costs
Convertible notes
Total non-current
Total
2023
$’000
-
163,846
163,846
2022
$’000
2,940
-
2,940
-
45,104
45,104
161,047
44,041
205,088
208,950
208,028
1 Note that while the syndicated bank loan matures in October 2024, the Group has classified this loan as current as a result of the request for waiver of bank
covenants at 30 June 2023. This has been approved by the lenders subsequent to 30 June 2023, refer to note F6 for further details.
(A)
Borrowings
Syndicated Facility Agreement
(i)
During the year there were no changes to the level of borrowings under the Group Syndicated Facility Agreement.
As at 30 June 2023, the Syndicated Facility was drawn exclusive of bank guarantees at $165,000,000 (2022: $165,000,000).
Facility
Limit
$’000
Cash drawn
$’000
Guarantees
drawn
$’000
Available
to be drawn
$’000
Maturity Purpose
Facility B
147,500
147,500
-
-
Oct 2024 For general corporate purposes, including
permitted acquisitions, growth capital
expenditure and associated fees, costs and
expenses and working capital advances up
to a sublimit of $35,000,000. Interest rate is
BBSY + 4.15% margin.
Facility D
35,000
17,500
16,026
1,474
Oct 2024 For working capital, general corporate
purposes, bank guarantees and letters of
credit. At reporting date $16 million of bank
guarantees had been issued under Facility D.
This is not included in the Consolidated
Statement of Financial Position (refer note F5).
Interest rate is BBSY + 4.15% margin.
Total
182,500
165,000
16,026
1,474
The Group is required to make interest payments on the drawn debt. However, for the period from 19 August 2022 to
30 September 2023 a further 1.5% margin was applied to the loan, which is capitalised into the loan. At 30 June an additional
$1,042,000 was capitalised into the loan balance. The repayment of principal is at maturity date. The effective interest rate
on borrowings for the year ended 30 June 2023 was 6.04% (30 June 2022: 4.32%). Refer to note F6 for changes to syndicated
facility agreement subsequent to year end.
The Group is required to comply with financial covenants under the terms of its borrowing facilities including a net senior
leverage ratio and a fixed charge cover ratio. The Group’s financiers agreed to waive covenant testing until 30 September
2023. Subsequent to year end lender consent was received in relation to covenant arrangements, refer to note F6 for
further details.
Security and fair value disclosures
(ii)
The Syndicated Facility is secured by a fixed and floating charge over all of the assets of the Company and its wholly
owned subsidiaries.
The carrying amount of the Group’s borrowings approximates their fair values, as commercial rates of interest are paid, and
the impact of discounting is not significant. For information about the methods and assumptions used in determining the
fair value of the Groups borrowings refer to note D8(A)(i).
Risk exposures
(iii)
Details of the Group’s exposure to risks arising from borrowings are set out in note D8(B)(ii).
86
Notes to the Consolidated Financial Statements D7
(A)
Other financial liabilities (Cont.)
Borrowings (Cont.)
Significant accounting policies
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost, using the effective interest rate method. Interest is accrued over the period it
becomes due and unpaid interest is recorded as part of current payables.
Borrowings are removed from the Consolidated Statement of Financial Position when the obligation specified in
the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in the Consolidated Statement of Comprehensive Income
as other income or finance costs.
Convertible notes
(B)
On 21 September 2021, the Group completed the issuance of $50,000,000 Senior Unsecured Convertible Notes (“Notes”).
The Notes are convertible at the option of the Noteholders into ordinary shares of AMA Group Limited based on an initial
conversion price of $0.4688 per share at any time on or after 21 September 2021 up to (but excluding) the date falling
5 business days prior to the maturity date. The Noteholder has the option to require the Company to redeem all or some of
the Noteholder’s Notes on 22 March 2025 for an amount equal to 100% of the principal amount of the Notes plus any accrued
but unpaid interest. Any Notes not converted will be redeemed on 21 March 2027, being the maturity date, at the principal
amount of the Notes plus any accrued but unpaid interest. The Notes carry an interest rate of 4.0% per annum which is paid
semi-annually in arrears on 22 March and 22 September.
The Convertible Notes are presented in the Consolidated Statement of Financial Position as follows:
Balance at 1 July 2022
Accrued interest
Interest paid
Amortisation of transaction costs
Balance at 30 June 2023 (net of transaction costs)
Significant accounting policies
Debt
$’000
44,041
2,722
(2,000)
341
45,104
Equity
$’000
5,197
-
-
-
5,197
Total
$’000
49,238
2,722
(2,000)
341
50,301
Convertible notes are compound financial instruments, which require separation of debt and equity components
at inception as follows:
Debt component
The fair value of the debt component of the Notes was estimated at the issuance date using an equivalent market
interest rate of a similar instrument. The Notes are initially recognised at a discounted amount of $44,596,820.
The discount is amortised as interest expense using the effective interest method over the terms of the Notes at
an effective interest rate of 6.10%.
Equity component – Conversion feature
The conversion feature of the Notes is required to be separated from the Notes and is recognised in shareholders
equity, net of income tax, and not subsequently remeasured. The conversion feature represents the Group's
obligation to issue AMA Group Limited shares at a fixed price should Noteholders exercise their conversion option.
Settlement of Convertible Notes
Where Notes are settled by issue of shares, the related financial liabilities are derecognised at their carrying value
with the corresponding increase to share capital. Any costs incurred are recognised in profit or loss.
Capitalised transaction costs
AMA Group Limited incurred $2,081,000 of transaction costs upon issuance of the Notes. Transaction costs relating
to the Notes have been allocated between the debt component and the equity component using the relative
proportions of these on initial measurement of the instruments. Costs attributed to the debt component are
amortised to finance expense over the term of the Notes using the effective interest method.
87
Annual Report | 30 June 2023 D Capital structure, financing and financial risk management
D8 Financial risk management
This section provides a summary of the Group's exposure to market, liquidity, and credit risks, along with the
Group's policies and strategies in place to mitigate these risks.
Exposure to market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk arises in the
normal course of the Group’s business.
The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group.
The risk management of the Group is carried out by executive management and conducted in a manner consistent with
policies approved by the Board. Executive management identifies, evaluates and mitigates financial risks within the
Group’s operating units.
The Group holds the following financial instruments:
Financial assets at amortised cost
Cash and cash equivalents
Receivables and contract assets
Loans to a former related party and other employees
Acquisition deposits
Financial assets at fair value
Derivative – financial instrument
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Lease liabilities
Borrowings (including convertible notes)
Financial liabilities at fair value
Contingent vendor consideration
Total financial liabilities
Notes
D6
C1
C3
C4
C3
C8
C7
D7
D7
2023
$’000
28,874
61,470
1,592
300
2022
$’000
52,189
67,428
1,460
300
-
92,236
6,819
128,196
111,441
316,988
208,950
116,470
289,303
205,088
-
637,379
2,940
613,801
Fair value measurement of financial instruments
(A)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability, assuming that market participants act in their
economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The Group measures certain financial instruments at fair value at each reporting date using a hierarchy based on the
lowest level of input that is significant to the fair value measurement.
The fair value hierarchy consists of the following levels:
■ quoted prices in active markets for identical assets or liabilities (Level 1);
■ inputs other than quoted prices included within Level 1 that are observable for the asset / liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
■ inputs for the asset / liability that are not based on observable market data (unobservable inputs) (Level 3).
There were no transfers between levels during the financial year.
Carrying amount approximate fair values
(i)
The carrying amount of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature. The fair value of non-current borrowings is estimated by discounting the future
contractual cash flows at the current market interest rates that are available to the Group for similar financial instruments.
The carrying amount of the Group’s borrowings approximates their fair values, as commercial rates of interest are paid, and
the impact of discounting is not significant. However, convertible notes are fixed price with conversion options at a fixed
price per AMA Group share. These convertible notes are tradeable on the Singapore Stock Exchange. In the event of
interest rates increasing or AMA share price falling, it would be expected the fair value of convertible notes would decline.
88
Notes to the Consolidated Financial Statements D8
Financial risk management (Cont.)
Market risk
(B)
Market risk is the risk that the fair value or future cash flows of a financial asset or financial liability will fluctuate because of
changes in market prices. Market risk comprises three types of risk: foreign exchange risk, interest rate risk and price risk.
The Group’s exposure to market risk arises from adverse movements in foreign exchange and interest rates which affect
the Group’s financial performance. The Group is not exposed to any significant price risk.
Foreign exchange risk
(i)
Foreign exchange risk is the risk that a change in foreign exchange rates may negatively impact the Group’s cash flow or
profitability because the Group has an exposure to a foreign currency or has foreign currency denominated obligations.
The Group’s exposure to foreign exchange risk arises from its future commercial transactions, and recognised assets and
liabilities denominated in a currency that is not the entity’s functional currency.
The impact of a 10% movement in USD or NZD exchange rates has a minimal impact on net profit after tax.
The Group does not employ foreign currency hedges. If the transactional value, net asset position and overall exposure
were to increase it is likely that a policy will be adopted to mitigate risk.
The aggregate net foreign exchange gains / losses recognised in profit or loss were a net loss of $55,000 (2022: $4,000).
Significant accounting policies
Functional and presentation currency
Items included in the Consolidated Financial Statements are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The Consolidated Financial
Statements are presented in Australian dollars (AUD).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates
are generally recognised in profit or loss.
Foreign exchange gains and losses are presented in the Consolidated Statement of Comprehensive Income on a
net basis within other expenses.
Group companies
The results and financial position of foreign operations that have a functional currency different from the
presentation currency are translated in the presentation currency as follows:
■ Assets and liabilities for each statement of financial position presented are translated at the closing rate at
the date of that statement of financial position;
■ Income and expenses for each consolidated statement of comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing
on the transaction dates, in which case income and expenses are translated at the dates of the transactions;
and
■ All relating exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are
recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and are translated at the closing rate.
Interest rate risk
(ii)
The Group holds both interest-bearing assets and interest bearing-liabilities, and therefore the Group’s income and cash
flows are subject to changes in market interest rates.
The Group’s main interest rate risk arises from long-term borrowings which expose the Group to interest rate risk. Borrowings
issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to
fair value risk.
The Group uses derivative financial instruments to hedge its exposure to fluctuations in interest rates and manages its cash
flow interest rate risk by using floating to fixed interest rate swaps. The Group agrees to exchange, at specified intervals, the
difference between fixed and variable interest rate amounts calculated by reference to an agreed notional principal amount.
These swaps are designated to hedge interest costs associated with underlying debt obligations. The interest swap contract
is designated as a cash flow hedging instrument.
The Group entered into interest rate swap contracts in June 2020 to fix the interest rate at 0.43% rather than being exposed
to changes in BBSY on $193,500,000 of borrowings. In January 2022, an amendment was made to align with drawn senior
debt (excluding bank guarantee facility). In October 2022, the swap stepped down to $88,500,000, which was due to mature
in October 2024. Interest payments are net settled every 6 months.
(Continues next page)
89
Annual Report | 30 June 2023 D Capital structure, financing and financial risk management D8
Financial risk management (Cont.)
(B) Market risk (Cont.)
(ii)
Interest rate risk (Cont.)
In June 2023, in preparation for the expected refinancing of debt, the Group closed out its interest rate swap positions,
realising cash of $6,135,000 as a result of the close out. The Board approved this deviation from the Group Treasury Risk Policy
as the Group transitions to new financing arrangements. The Group expects to hedge interest rate risk on financed debt
subsequent to year end.
At reporting date, the Group has exposure to the following variable rate borrowings and interest rate swap contracts:
Syndicated facility agreement 1
Interest rate swaps – syndicated loans 2
Net exposure to cash flow interest rate risk
Interest rate
Interest rate
2023
%
3.72
-
2023
$'000
166,042
-
166,042
2022
%
3.07
0.43
2022
$'000
165,000
(147,500)
17,500
1
Interest rate for Syndicated facility agreement is BBSY at latest rate setting notice (19 January 2023 and 19 July 2022 respectively). The rate presented does not
include any margin and line fees applicable under the loan agreement.
2 The rate presented does not include any margin and line fees applicable under the loan agreement.
An analysis by maturities is provided in note D8(D)(i). This maturity analysis assumes Noteholders exercise their put option on
21 March 2025 and are repaid the principal amount in full. In the event that AMA’s share price increases above the conversion
price, the Group would expect that the conversion option would be taken up by some or all Noteholders and the cash
outflow to repay Noteholders would not be required.
The following table summarises the impact of interest rate changes, relating to existing borrowings and financial
instruments, on net profit before tax and equity, net of tax. For the purpose of this disclosure, sensitivity analysis is isolated
to a 100 basis points increase / decrease in interest rates assuming all other variables remain constant.
Floating rate
Increase of 100 bps
Decrease of 100 bps
(Increase) / decrease
on profit before tax
(Increase) / decrease
on equity, net of tax
2023
$'000
1,660
(1,660)
2022
$'000
548
(548)
2023
$'000
-
-
2022
$'000
(1,630)
1,654
Credit risk
(C)
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities,
including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
The maximum exposure to credit risk at the end of the reporting period is the carrying amount, net of any provisions for
impairment for each class of the following financial assets:
Cash and cash equivalents
(i)
Credit risk from cash arises from balances held with counterparty financial institutions. Credit risk is managed by the
Group’s finance department which restrict the Group’s exposure to financial institutions by credit rating band. For banks
and financial institutions, only independently rated parties with a minimum rating of “A” are accepted.
Trade and other receivables
(ii)
Customer credit risk is managed by each division’s established policies, procedures and controls relating to customer credit
risk management. Credit risk arising on trade and other receivables is monitored on an ongoing basis, mitigating exposure
to impairment of trade and other receivables.
The Group applies the AASB 9 Financial Instruments simplified approach to measuring expected credit losses which uses
a lifetime expected loss allowance for all trade receivables. Historically, there has been no significant change in customers’
credit risk and the lifetime expected loss assessment of the Group remains unchanged.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses
based on historical credit loss experience, adjusted for forward looking factors specific to the debtor and the economic
environment. The provision rates are based on days past due for groupings of various customer segments with similar
loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and
supportable information that is available at the reporting date about past events, current conditions and forecasts of
future economic conditions.
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include failure to make contractual payments for a period of greater than 60 days
past due. The Group does not hold any collateral in relation to these receivables.
The Group is exposed to material concentrations of credit risk with its top two customers representing approximately
38% of total trade receivables (30 June 2022: 31%). The Group’s receivables are largely due from Australian regulated insurers
who have strong long-term credit ratings. The Group focuses largely on experienced payment history and does not expect
that these customers will fail to meet their obligations.
For the year ended 30 June 2023, the Group recognised an expected credit loss of $304,000 (30 June 2022: $526,000).
90
Notes to the Consolidated Financial Statements
D8
Financial risk management (Cont.)
Liquidity risk
(D)
Liquidity risk is the risk the Group will encounter difficulties in meeting the obligations associated with its financial liabilities.
The Group’s approach to managing liquidity is to ensure, as far as possible, sufficient liquidity is available to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Group’s reputation.
Management monitors rolling forecasts of the Group’s liquidity reserve (comprising the undrawn borrowing facilities and
cash and cash equivalents) on the basis of expected cash flows. This is generally carried out at an operational level on a
weekly basis in accordance with practice and limits set by the Group. This is to ensure ongoing liquidity, prompt decision
making, and allow proactive communication with its financiers.
Details of financing arrangements are disclosed in note D7(A). At the reporting date, the Group has $1,474,000 of undrawn
committed facilities available for bank guarantees subject to approval from financiers (30 June 2022: $5,463,000).
Maturities of financial instruments
(i)
The tables below provide an analysis of the Group’s financial assets and liabilities into relevant maturity groupings based on
the remaining period between the reporting date and the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of
discounting is not significant.
Contractual maturities of financial instruments
2023
Financial assets realisable cash flows
Cash and cash equivalents
Receivables and contract assets
Financial assets
Acquisition deposits
Total inflow on financial assets
Financial liabilities due for payment
Trade and other payables
Lease liabilities
Borrowings 1
Total outflow on financial liabilities
Carrying
Amount
$’000
Within
1 year
$’000
Between
1 and 5 years
$’000
Over
5 years
$’000
Total
contractual
cash flows
$’000
28,874
61,470
1,592
300
28,874
61,470
1,592
300
92,236
-
-
-
-
-
-
-
-
-
-
28,874
61,470
1,592
300
92,236
(111,441)
(316,988)
(208,950)
(111,441)
(51,419)
(15,900)
(178,760)
-
(187,771)
(229,544)
(417,315)
-
(210,330)
-
(210,330)
(111,441)
(449,520)
(245,444)
(806,405)
Total outflow on financial instruments
(86,524)
(417,315)
(210,330)
(714,169)
2022
Financial assets realisable cash flows
Cash and cash equivalents
Receivables and contract assets
Loans to a former related party and other employees
Acquisition deposits
Total inflow on financial assets
Financial liabilities due for payment
Trade and other payables
Lease liabilities
Borrowings
Contingent vendor consideration – cash settlement
Total outflow on financial liabilities
Derivatives
Interest rate swaps (net settled)
Total (outflow)/inflow on derivatives
52,189
67,428
1,460
300
52,189
67,428
1,460
300
121,377
-
-
-
-
-
-
-
-
-
-
52,189
67,428
1,460
300
121,377
(116,470)
(289,303)
(205,088)
(2,940)
(116,470)
(50,835)
(9,156)
(2,440)
(178,901)
-
(177,362)
(227,333)
-
(404,695)
-
(183,113)
-
-
(183,113)
(116,470)
(411,310)
(236,489)
(2,440)
(766,709)
6,819
1,607
1,607
5,212
5,212
-
-
6,819
6,819
Total outflow on financial instruments
(55,917)
(399,483)
(183,113)
(638,513)
1 Refer to note F6 for details on changes to financing arrangements subsequent to year end.
91
Annual Report | 30 June 2023 D Capital structure, financing and financial risk management E
GROUP STRUCTURE
Group structure provides information about subsidiaries and how changes have affected the financial position and
performance of the Company, AMA Group Limited.
E1 Parent entity information
This section presents the stand-alone financial information of AMA Group Limited.
(A)
Summary financial information
Assets
Current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Convertible notes
Other reserves
Retained deficit
Total equity
Profit / (Loss) for the year
Total comprehensive loss
2023
$’000
20,412
336,995
2022
$’000
27,968
478,112
178,748
262,823
21,342
258,329
74,172
219,783
533,190
5,197
64,207
(528,422)
531,504
5,197
64,704
(381,622)
74,172
219,783
(146,800)
(142,589)
(32,041)
(36,613)
Guarantees entered into by the parent entity
(B)
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in respect
of certain subsidiaries. Refer to note E2 for further details of the subsidiaries covered under the Deed of Cross Guarantee.
The Parent entity has given unsecured guarantees in respect of financial trade arrangements entered into by its subsidiaries.
It is not practical to ascertain or estimate the maximum amount for which the Company may become liable. As at 30 June
2023, no subsidiary was in default in respect of any arrangement guaranteed by the Company and all amounts owed have
been brought to account as liabilities in the financial statements.
Significant accounting policies
Parent entity
Financial information for the parent entity has been prepared on the same basis as the Consolidated
Financial Statements with the exception of investments in controlled entities which are accounted for at cost
less any impairment.
92
Notes to the Consolidated Financial Statements
E2 Investments in controlled entities
The following section sets out the list of the Group's significant investments in controlled entities.
The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. The financial statements of controlled entities are included
in the Consolidated Financial Statements from the date on which control commences until the date on which control ceases.
Significant investments in controlled entities
(A)
The Consolidated Financial Statements incorporate the assets, liabilities and results of the following principal subsidiaries in
accordance with the accounting policy described in note A2(A):
Name of entity
A.C.N. 107 954 610 Pty Ltd 1,3
A.C.N. 124 414 455 Pty Ltd 1,2
A.C.N. 624 750 045 Pty Ltd 1,3
A.C.N. 624 895 772 Pty Ltd 1,3
A.C.N. 624 896 000 Pty Ltd 1,3
A.C.N. 624 747 646 Pty Ltd 1,3
A.C.N. 073 318 519 Pty Ltd 1,3
Accident Management Australia Pty Ltd 1,3
Accident Repair Management Pty Ltd 1
Accident Repair Management No. 2 Pty Ltd 1
Accident Repair Management No. 3 Pty Ltd 1,4
ACM Parts Pty Ltd 1
AMA1 Pty Ltd 1,3
AMA Group Solutions Pty Ltd 1
AMA Procurement Pty Ltd 1
Automotive Solutions Group Pty Ltd 1,3
BMB Collision Repairs Pty Ltd 1
Capital Smart Group Holdings Pty Ltd
Capital S.M.A.R.T. Repairs Australia Pty Ltd
Capital S.M.A.R.T. Repairs New Zealand Pty Ltd
Carmax Australia Pty Ltd 1,3
Carmax New Zealand Limited 2,4
Deering Autronics Australia Pty Ltd 1,3
Direct One Accident Repair Centre Pty Ltd 1
Fleet Alliance Pty Ltd 1,3
FluidDrive Holdings Pty Ltd 1,2,4
Geelong Consolidated Repairs Pty Ltd 1
Gemini Accident Repair Centres NZ Limited 2,4
Micra Accident Repair Centre Pty Ltd 1
Mr Gloss Holdings Pty Ltd 1
Mt Druitt Autobody Repairs Pty Ltd 1,2
Phil Munday’s Panel Works Pty Ltd 1
Qplus Production Pty Ltd 2
Rapid Accident Management Services Pty Ltd 1,3
Repair Management Australia Pty Ltd 1
Repair Management Australia Bayswater Pty Ltd 1
Repair Management Australia Dandenong Pty Ltd 1
Repair Management New Zealand Limited
Ripoll Pty Ltd 1,2
Shipstone Holdings Pty Ltd 1
Smash Repair Canberra Pty Ltd 1
Woods Auto Shops (Cheltenham) Pty Ltd 1,2,4
Woods Auto Shops (Dandenong) Pty Ltd 1
Woods Auto Shops (Holdings) Pty Ltd 1
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Class of shares
Equity holding
2023
%
2022
%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
-
100
-
-
-
-
-
-
100
100
100
100
-
100
100
-
100
90
90
90
-
100
-
100
-
100
100
100
100
100
100
100
90
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
90
90
100
100
100
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
100
100
1 These companies are parties to the Deed of Cross Guarantee and members of the Closed Group as at 30 June 2023 (refer note E4).
2 These companies are dormant.
3 Effective 24 May 2023, these companies were voluntarily de-registered and are no longer part of the AMA Group of companies or party to the Deed of
Cross Guarantee.
4 Subsequent to 30 June 2023 these entities were voluntarily deregistered.
Significant accounting policies
Unless otherwise stated, the Group's controlled entities have share capital consisting solely of ordinary shares that
are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the
Group. The country of incorporation or registration is also their principal place of business.
93
Annual Report | 30 June 2023 E Group structure
E3 Non-controlling interests
On 25 October 2019, the Group incorporated Capital Smart Group Holdings Pty Ltd with 90% of the issued capital held by
the Company. Capital Smart Group Holdings Pty Ltd is the head company of the Capital Smart group of entities.
Set out below is summarised financial information for this entity. The amounts disclosed are before intercompany eliminations.
(A)
Summarised Statement of Financial Position
Current assets
Current liabilities
Current net assets/(liabilities)
Non-current assets
Non-current liabilities
Non-current net assets/(liabilities)
Net assets
Accumulated non-controlling interests
(B)
Summarised Statement of Comprehensive Income
Revenue
Gain/(Loss) for the year
Other comprehensive income
Total comprehensive loss
2023
$’000
38,124
(73,626)
(35,502)
288,375
(257,024)
31,351
2022
$’000
33,158
(66,165)
(33,007)
405,146
(250,983)
154,163
(4,151)
121,156
8,063
10,419
2023
$’000
396,799
(81,323)
16
(81,307)
2022
$’000
313,222
(79,338)
12
(79,326)
Loss allocated to non-controlling interests (excludes goodwill impairment)
(2,356)
(3,795)
(C)
Summarised Statement of Cash Flows
Net cash inflows provided by operating activities
Net cash outflows used in investing activities
Net cash (outflows) / inflows from financing activities
Net (decrease) / increase in cash and cash equivalents
Balance at 1 July
Movement:
Share of result for the year
Balance at 30 June
2023
$’000
(8,418)
(2,411)
3,942
(6,887)
2023
$’000
10,419
(2,356)
8,063
2022
$’000
3,673
(3,234)
(1,092)
(653)
2022
$’000
14,214
(3,795)
10,419
The Group elected to recognise the non-controlling interests in respect of Capital Smart Group Holdings Pty Ltd as the
proportionate share of the acquired entity’s net identifiable assets.
Significant accounting policies
Non-controlling interest
The Group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling
interests' proportionate share of the acquired entity's net identifiable assets. The decision is made on an
acquisition-by-acquisition basis. For the non-controlling interests in Capital Smart Group Holdings Pty Ltd the Group
elected to recognise the non-controlling interest as its proportionate share of the acquired net identifiable assets.
Where the non-controlling interests are acquired or sold without loss of control, any excess or deficit of consideration
paid over the carrying amount is recognised in equity transactions. The Group has elected to recognise this effect in
retained earnings.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any
related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured at fair value when control is lost.
94
Notes to the Consolidated Financial Statements E4 Deed of cross guarantee
The following section presents the Consolidated Statement of Profit or Loss and the Consolidated Statement of
Financial Position of the Company and certain wholly-owned companies that are parties to a deed of cross guarantee.
The Company and each of the Australian wholly-owned subsidiaries identified in note E2 (together referred to as the Closed
Group) has entered into a Deed of Cross Guarantee (the Deed), as defined in ASIC Corporations (Wholly-owned Companies)
Instrument 2016/785 (the Instrument). The effect of the Deed is that each entity in the Closed Group guarantees the payment
in full of all debts of the other entities in the Closed Group in the event of their winding up. The Closed Group has also given
a similar guarantee in the event that the Company is wound up or if it does not meet its obligations under the terms of
overdrafts, loans, leases, or other liabilities subject to the guarantee.
Pursuant to the Instrument, the wholly-owned subsidiaries within the Closed Group are relieved from the requirement to
prepare, audit, and lodge separate financial reports. The Trustee to this deed of cross guarantee is Ripoll Pty Ltd, a member
of the consolidated group.
(A)
Consolidated Statement of Profit or Loss and movement in retained deficit of
the closed group
Revenue and other income
Raw materials and consumables used
Employee benefits expense
Occupancy expense
Professional services expense
Other expense
Loss on disposal of business
Fair value adjustments on contingent vendor consideration
Depreciation and amortisation expense
Impairment expense
Operating loss before interest and tax
Finance costs
Loss before income tax
Income tax (expense) / benefit
Loss for the year
Retained deficit at the beginning of the financial year
Loss for the year
Retained deficit at the end of the financial year
2023
$’000
2022
$’000
469,618
528,524
(187,766)
(208,509)
(7,739)
(6,715)
(10,542)
(63)
654
(35,252)
(116,326)
(102,640)
(23,124)
(125,764)
3,750
(122,014)
(248,079)
(219,750)
(16,657)
(9,071)
(13,404)
-
13,729
(41,920)
(105,119)
(111,747)
(21,585)
(133,332)
18,630
(114,702)
2023
$’000
2022
$’000
(322,072)
(207,370)
(122,014)
(444,086)
(114,702)
(322,072)
95
Annual Report | 30 June 2023 E Group structure E4
(B)
Deed of cross guarantee (Cont.)
Consolidated Statement of Financial Position of the closed group
Current assets
Cash and cash equivalents
Receivables and contract assets
Inventories
Other financial assets
Other assets
Current tax receivable
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Other financial assets
Other non-current assets
Deferred tax assets
Receivables from related entities
Investments in controlled entities
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Total current liabilities
Non-current liabilities
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other reserves
Retained deficit
Convertible notes
Total equity
96
2023
$’000
15,588
41,724
41,225
1,592
12,040
4,169
116,338
32,347
195,126
157,627
-
685
20,487
121,827
14,565
542,664
2022
$’000
31,617
47,190
36,693
5,475
3,067
14,604
138,646
34,806
170,455
209,184
5,212
-
20,919
115,949
72,305
628,830
659,002
767,476
58,545
163,846
21,276
22,926
3,459
270,052
45,104
186,754
20,063
38,079
290,000
64,346
2,940
24,607
29,946
8,910
130,749
205,088
161,227
16,788
33,841
416,944
560,052
547,693
98,950
219,783
533,190
4,649
(444,086)
5,197
98,950
531,504
5,154
(322,072)
5,197
219,783
Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements
F
OTHER INFORMATION
This section of the notes includes other information that must be disclosed to comply with the accounting standards and
other pronouncements, but that is not immediately related to individual line items in the financial statements.
F1 Share-based payments
This section presents the Group's benefits provided to employees through share-based incentives. Eligible employees
are remunerated for their services or incentivised for their performance in part through shares or rights to shares.
The Employee Equity Plan (the “Plan”) was approved by shareholders at the Annual General Meeting on 22 November 2018.
The Plan is designed to align employee and shareholder interests through share ownership. The Plan is for the benefit of all
employees (including Executive Directors) of the Company. Awards under the Plan are issued to eligible participants by way of:
■ a Right;
■ a Share;
■ a Performance Share.
Performance rights program
(A)
The Performance Rights Program (PRP) was implemented in FY20 (in accordance with the Plan) and acts as the Group’s
long-term incentive scheme to reward participants through variable remuneration. Under the PRP, executives and other
eligible senior employees are invited to receive performance rights in the Company. Detailed remuneration disclosures
including the link between the PRP and shareholder wealth are provided in the Remuneration Report.
Under the PRP, each performance right enables the participant to acquire a share in the Company, at a future date, subject
to agreed vesting conditions. The number of performance rights allocated to each participant is set by the Board and based
on individual circumstances and performance.
Movements during the year
(i)
Allocation of performance rights under the PRP were granted during FY23. The grants were awarded at no cost to the
participants and are subject to performance conditions over a three-year period ending 30 June 2025.
Set out in the table below is a summary of movements in the number of performance rights under the PRP at the end of
the financial year.
Grant date
FY21
9 December 2021
20 December 2021
18 February 2022
14 June 2022
30 November 2022
6 January 2023
Total
Balance at the
start of the year
Granted
during the year
Forfeited
during the year
Balance at the
end of the year
Unvested at the
end of the year
674,266
2,907,934
1,869,857
396,802
1,206,653
-
-
7,055,512
-
-
-
-
-
16,471,900
218,531
(674,266)
(903,034)
(412,118)
-
-
(919,940)
-
-
2,004,900
1,457,739
396,802
1,206,653
15,551,960
218,531
-
2,004,900
1,457,739
396,802
1,206,653
15,551,960
218,531
16,690,431
(2,909,358)
20,836,585
20,836,585
Vesting conditions of rights
(ii)
Vesting of the performance rights is subject to continued employment with the Group and achievement of performance
hurdles. These performance hurdles for grants relating to performance periods up until the end of June 2023 were based on
the Group’s Total Shareholder Return (TSR) (20%) and EPS (80%) performance over a three-year period. For grants relating to
the three-year performance period to June 2024 and June 2025, these conditions are based on the Group’s relative TSR (50%)
and absolute TSR (50%). Further details regarding these performance measures and how they are calculated can be found in
the Remuneration Report on page 41.
97
Annual Report | 30 June 2023
F1
(A)
Share-based payments (Cont.)
Performance rights program (Cont.)
Fair value of rights granted
(iii)
The fair value of the EPS rights has been determined based on a Black Scholes Model as they are subject to non-market
performance conditions. Under this method the fair value is based on the share price at the valuation date with an
adjustment for the dividends foregone during the vesting period.
To reflect the impact of the market-based performance conditions, the fair value of the rights subject to the TSR have been
calculated using Monte-Carlo simulation techniques. The variables in the table below are used as inputs into the model to
determine the fair value of performance rights.
Grant date 1
23 November 2020
23 November 2020
9 December 2021
9 December 2021
20 December 2021
18 February 2022
14 June 2022
30 November 2022
6 January 2023 3
Performance
period
Share
price on
grant date
Share
price
volatility 2
Risk
free
rate
Annual
dividend
yield
Fair
value per
relative
TSR right
Fair
value per
absolute
TSR right
Fair
value per
EPS right
Vesting
date
Jul 2020 -
Jun 2023
Jul 2020 -
Jun 2023
Jul 2020 -
Jun 2023
Jul 2021 -
Jun 2024
Jul 2021 -
Jun 2024
Jul 2021 -
Jun 2024
Jul 2021 -
Jun 2024
Jul 2022 -
Jun 2025
Jan 2023 -
Dec 2025
$0.75
40%
0.91%
1.0%
$0.34
N/A
$0.72
31 August 2023
$0.75
40%
0.91%
1.0%
$0.34
N/A
$0.72
31 August 2023
$0.43
42.5%
0.47%
0.8%
$0.04
N/A
$0.42
31 August 2023
$0.43
42.5%
0.83%
0.8%
$0.18
$0.21
N/A 31 August 2024
$0.43
42.5%
0.78%
0.8%
$0.22
$0.20
N/A 31 August 2024
$0.36
42.5%
1.31%
0.8%
$0.14
$0.18
N/A 31 August 2024
$0.17
50%
3.87%
0.8% $0.034
$0.01
N/A 31 August 2024
$0.21
59%
3.68%
0.0%
$0.17
$0.15
N/A 31 August 2025
$0.20
59%
3.68%
0.0%
N/A
N/A
N/A 31 January 2026
1 For the purposes of valuation, the grant date is determined in accordance with AASB 2 Share Based Payments.
2 The Company share price volatility is based on the Company’s average historical share price volatility at the grant date.
3 This grant has no performance conditions and contains service condition only.
Service rights granted under the Employee Equity Plan
(B)
In June 2021, 909,090 Service Rights were granted to a senior Executive of the Group in lieu of fixed remuneration.
Each Service Right enables the participant to acquire a share in the Company at a future date and exercise price subject
to vesting conditions. The Service Rights were issued under two tranches.
During FY23 all remaining service rights granted vested.
General Employee Share Plan (GESP)
(C)
From time-to-time, eligible Australian employees are offered the opportunity to receive part of their salary in the form of
shares. All permanent employees who are an employee at the date the offer is made are eligible to participate in the scheme.
Employees may elect not to participate in the scheme.
GESP is administered by the Board. Shares granted to the employees by the Board are acquired on-market via a third party
trustee plan company. Under the plan, participating employees are allocated an aggregate market value up to $1,000 worth
of fully paid ordinary shares in AMA Group Limited. Offers under GESP are at the Board’s discretion. The last offer was in
March 2022, with no offer made in FY23.
Shares issued under the scheme may not be sold until the earlier of three years after issue or cessation of employment.
In all other respects shares rank equally with other fully-paid ordinary shares on issue.
In March 2022, 9,255,888 shares were purchased on-market under the plan to participating employees. The shares were
allocated on 28 March 2022 at the 5-day volume weighted average price (VWAP) of $0.3439 calculated up to and including
24 March 2022.
Expenses arising from share-based payment transactions
(D)
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit
expense were as follows:
Share-based payments expense
Employee share acquisition plan (including transaction costs)
Total share-based payments expense
2023
$’000
2,007
-
2,007
2022
$’000
331
3,184
3,515
98
Notes to the Consolidated Financial Statements F1
Share-based payments (Cont.)
(D)
Expenses arising from share-based payment transactions (Cont.)
Significant accounting policies
Share-based payments
The cost of share-based payments plans is determined on the basis of the fair value of the equity instrument
at grant date. Determining the fair value assumes choosing the most suitable valuation model for these equity
instruments, by which the characteristics of the grant have a decisive influence. The input into the valuation model
includes relevant judgments such as the estimated probability of vesting and the volatility of the underlying share.
The grant date fair value of equity-settled share-based payments is recognised as an expense proportionally over
the vesting period, with a corresponding increase in equity.
The fair value of instruments with market-based performance conditions (TSR) is calculated at the date of grant
using a Monte Carlo simulation model. The probability of achieving market-based performance conditions is
incorporated into the determination of the fair value per instrument.
The fair value of instruments with non-market-based performance conditions (EPS) and service conditions and
retention rights are calculated using a Black-Scholes option pricing model.
At each statement of financial position date, the entity revises its estimate of the number of options and
performance rights that are expected to become exercisable. The employee benefit expense recognised each
period takes into account the most recent estimate.
F2 Related party transactions
This section highlights the Group's transactions with its related parties and the extent these transactions impacted
the Group's financial performance and position.
Parent entity
(A)
The ultimate holding entity is AMA Group Limited. Information about the Group’s structure, including details of the
controlled entities and holding company are set out in note E2.
Key management personnel compensation
(B)
The total remuneration for KMP of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Total KMP compensation
2023
$
2,808,508
105,452
5,264
-
619,661
3,538,885
2022
$
2,941,750
76,193
41,205
-
123,849
3,182,997
Detailed remuneration disclosures and information regarding compensation of individual Key Management Personnel are
provided in the Remuneration Report on pages 43 to 46.
Balances outstanding to entities controlled by Key Management Personnel
(C)
No balances are outstanding in relation to entities controlled by current KMP at 30 June 2023 (2022: nil).
Loans provided to a former related party
(D)
Loans outstanding at the end of the current and prior year include a loan to the former Group Chief Executive Officer and
Executive Director, Andrew Hopkins.
Mr Hopkins’ loan accrues interest at a rate consistent to the ‘Indicator Lending Rates – Bank variable housing loans interest
rate’ published by the Reserve Bank of Australia. Mr Hopkins has defaulted on his loan and as at 30 June 2023, the balance
outstanding on his loan is $1,592,000 (30 June 2022: $1,460,000).
The Group has assessed recoverability and has not impaired the value of the loan largely due to the existence of a signed
loan deed and litigation on foot.
There are no other loans with related parties outstanding as at the date of this report.
99
Annual Report | 30 June 2023 F Other information F3 Auditor’s remuneration
This section presents the total remuneration of the Group's external auditors for audit, assurance, and other services.
During the year the following fees were paid or payable for services provided by KPMG:
Audit and review services
Audit and review of financial statements – Group
Audit and review of financial statements – controlled entities
Total remuneration for audit and review services
Other non-assurance services
Transactional services
Total remuneration for non-assurance services
2023
$
2022
$
781,466
242,309
1,023,775
723,651
222,525
946,176
-
-
218,684
218,684
Total auditor’s remuneration
1,023,775
1,164,860
It is the Group’s policy to employ KPMG on assignments additional to their statutory audit duties where KPMG’s expertise
and experience with the Group are important. These assignments are principally tax advice and transactional services
(e.g. due diligence on acquisitions or services relating to sale of business). The provision of non-assurance services is
governed by the Group’s Auditor Independence Policy and the general standard of independence for auditors imposed
by the Corporations Act 2001 (Cth). The external auditor will not be engaged to perform any service that may impair or be
perceived to impair the external auditor’s judgement or independence. It is the Group’s policy to seek competitive quotes
for all major consulting projects.
F4 Commitments
This section presents the Group's contractual obligation to make a payment in the future in relation to purchases of
property, plant and equipment, and lease commitments.
Capital expenditure commitments
Committed at the end of the reporting period but not recognised as liabilities, payable:
Within one year
Later than one year but not later than five years
Later than five years
Total capital expenditure commitments
Operating lease commitments
Commitments for minimum lease payments in relation to non-cancellable short-term
leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Total operating lease commitments
2023
$’000
2022
$’000
603
-
-
603
239
297
-
536
367
-
-
367
241
542
-
783
Total commitments for expenditure
1,139
1,150
100
Notes to the Consolidated Financial Statements
F5 Contingent liabilities
Contingent liabilities are potential future cash payments where the likelihood of payment is not considered
probable or cannot be measured reliably.
Legal claims
(A)
During FY21, a business vendor issued a Notice of Dispute against the Group in relation to their earn-out calculation.
The parties agreed to mediate which at the date of this report is still ongoing. Management considers the claims brought
to be unjustified, and the probability that the settlement will exceed the amount already provisioned for, to be less than
probable. The Directors are of the view that no material losses will arise in respect of the legal claim at the date of these
Financial Statements. Further information on this contingency is omitted so as not to prejudice the Group's position in the
related dispute.
In May 2021, the Company filed proceedings in the Federal Court of Australia against the former Group CEO and Executive
Director, Andrew Hopkins. The litigation remains on foot at the date of this report and is not considered a contingent liability
as the Group is the plaintiff.
F6 Events occurring after the reporting period
This section outlines events which have occurred between the reporting date and the date the Financial Report is
authorised for issue.
Finalisation of Suncorp pricing with Capital S.M.A.R.T
(A)
On 18 August 2023, the Group announced finalised pricing with Suncorp in relation to the Capital S.M.A.R.T Motor Repair
Service Agreement (MRSA). The new pricing will apply to all repairs booked from 1 July 2023 and returns the arrangement
to annual pricing reviews with a clear re-pricing mechanism. The arrangements include transitional support while AMA
Group implements several operational initiatives throughout FY24, which are planned to improve efficiency and profitability
of Capital S.M.A.R.T. As transitional support payments cease at the end of FY24, the loss of those benefits is expected to be
offset by the benefits realised from the several operational initiatives identified by management.
While this new pricing improves the EBITDA of Capital S.M.A.R.T in FY24, it represents a more modest level of profitability
compared prior assumptions used for impairment testing purposes, which results in the impairment of the remaining
Capital S.M.A.R.T goodwill. Refer to note C6 for further details.
Syndicated Facility Agreement Covenant Waiver and Other Consents
(B)
Following engagement with existing lenders, AMA Group has received consent from lenders for the following matters:
■ Waiver of June 2023 minimum EBITDA covenant. While the June 2023 covenant was calculated and technically
achieved under the Syndicated Facility Agreement (SFA), it was met with minimal headroom and numerous addbacks.
Given the time required to review the basis of these calculations, the Group requested the covenant be waived as a
precautionary measure.
■ Change of FY24 covenant requirements to remove the fixed charge cover ratio (FCCR) for FY24 and replace the net
senior leverage ratio (NSLR) covenant with a minimum EBITDA covenant for September and December 2023.
The NSLR covenant would also be increased for March 2024 but left unchanged for June 2024.
■ A debt repayment obligation of $35 million by 31 December 2023, with repayment to be funded through equity
raising proceeds.
■ Changing the maximum net debt to a minimum cash requirement of $15 million at the end of each month.
■ Interest rate to continue to be set at BBSY + 4.15% margin until September 2024.
As these consents were received by the lenders in August 2023, this does not change the debt classification from current,
however provides sufficient relief for the Group to execute a pathway to refinancing the existing debt. As part of this
arrangement, the existing margin (including PIK interest) will remain in place until September 2024.
Equity Raising
(C)
On 7 September 2023, AMA Group launched a capital raising to raise $55 million of share capital. The capital raising is
comprised of a fully underwritten Institutional Placement and a fully underwritten accelerated renounceable entitlement
offer. The proceeds of the equity raising will be used to facilitate the principal repayment of $35 million of existing senior
bank debt by 31 December 2023 as well as providing further working capital funding.
No other matters or circumstances have occurred subsequent to period end that have significantly affected, or may
significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group or
economic entity in subsequent financial years.
101
Annual Report | 30 June 2023 F Other information Directors’ Declaration
In the opinion of the Directors of AMA Group Limited (the Company):
(a)
the Financial Statements and notes thereto are in accordance with the Corporations Act 2001, including:
(i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements, and
(ii) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance
for the financial year ended on that date, and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable, and
at the date of this declaration, there are reasonable grounds to believe that the members of the closed group will
be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of
cross guarantee described in note E4.
(b)
(c)
Note A1 confirms that the Financial Statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors made pursuant to section 303(5) of the Corporations Act 2001.
Carl Bizon
Executive Director
& Group Chief Executive Officer
7 September 2023
102
Notes to the Consolidated Financial Statements Independent Auditor’s Report
To the shareholders of AMA Group Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
AMA Group Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
• giving a true and fair view of the Group's
financial position as at 30 June 2023 and
of its financial performance for the year
ended on that date; and
• complying with Australian Accounting
Standards
Corporations
and
Regulations 2001.
the
The Financial Report comprises:
• Consolidated statement of financial position as at 30 June
2023
income,
• Consolidated statement of comprehensive
in equity, and
Consolidated statement of changes
Consolidated statement of cash flows for the year then
ended
• Notes including a summary of significant accounting
policies
• Directors' Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during the
financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements
of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial
Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
103
Annual Report | 30 June 2023 Material uncertainty related to going concern
We draw attention to Note A1, “Going Concern” in the financial report. The conditions disclosed in Note
A1, indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to continue
as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal
course of business, and at the amounts stated in the financial report. Our opinion is not modified in
respect of this matter.
In concluding there is a material uncertainty related to going concern we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going
concern. This included:
• Analysing the cash flow projections by:
•
Evaluating the underlying data used to generate the projections for consistency with other
information tested by us, our understanding of the Group’s intentions, and past results and
practices;
• Assessing the planned levels of operating cash inflows and outflows, including capital
expenditures, for feasibility, timing, consistency of relationships and trends to the Group’s historical
results, particularly in light of recent loss making operations, results since year end, and our
understanding of the business, industry and economic conditions of the Group;
• Assessing significant non-routine forecast cash inflows and outflows for feasibility, quantum and
timing. We used our knowledge of the client, its industry and current status of those initiatives to
assess the level of associated uncertainty;
• Reading Directors minutes and relevant correspondence with the Group’s advisors to understand the
Group’s ability to raise additional equity particularly in considering the expected market conditions;
• Reading correspondence with existing financiers and advisors to understand the post year end
renegotiation of existing debt facilities and amendments to loan covenant requirements; and
•
Evaluating the Group’s going concern disclosures in the financial report by comparing them to our
understanding of the matter, the events or conditions incorporated into the cash flow projection
assessment, the Group’s plans to address those events or conditions, and accounting standard
requirements. We specifically focused on the principal matters giving rise to the material uncertainty.
Key Audit Matters
In addition to the matter described in the
Material uncertainty related to going
concern section, we have determined
the matters described below to be the
Key Audit Matters:
• Goodwill; and
• Revenue.
Key Audit Matters are those matters that, in our professional
judgement, were of most significance in our audit of the
Financial Report of the current period.
These matters were addressed in the context of our audit of
the Financial Report as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
104
Material uncertainty related to going concern
We draw attention to Note A1, “Going Concern” in the financial report. The conditions disclosed in Note
A1, indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to continue
as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal
course of business, and at the amounts stated in the financial report. Our opinion is not modified in
respect of this matter.
In concluding there is a material uncertainty related to going concern we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going
concern. This included:
• Analysing the cash flow projections by:
•
Evaluating the underlying data used to generate the projections for consistency with other
information tested by us, our understanding of the Group’s intentions, and past results and
practices;
• Assessing the planned levels of operating cash inflows and outflows, including capital
expenditures, for feasibility, timing, consistency of relationships and trends to the Group’s historical
results, particularly in light of recent loss making operations, results since year end, and our
understanding of the business, industry and economic conditions of the Group;
• Assessing significant non-routine forecast cash inflows and outflows for feasibility, quantum and
timing. We used our knowledge of the client, its industry and current status of those initiatives to
assess the level of associated uncertainty;
• Reading Directors minutes and relevant correspondence with the Group’s advisors to understand the
Group’s ability to raise additional equity particularly in considering the expected market conditions;
• Reading correspondence with existing financiers and advisors to understand the post year end
renegotiation of existing debt facilities and amendments to loan covenant requirements; and
•
Evaluating the Group’s going concern disclosures in the financial report by comparing them to our
understanding of the matter, the events or conditions incorporated into the cash flow projection
assessment, the Group’s plans to address those events or conditions, and accounting standard
requirements. We specifically focused on the principal matters giving rise to the material uncertainty.
Key Audit Matters
Key Audit Matters:
• Goodwill; and
• Revenue.
In addition to the matter described in the
Key Audit Matters are those matters that, in our professional
Material uncertainty related to going
judgement, were of most significance in our audit of the
concern section, we have determined
Financial Report of the current period.
the matters described below to be the
These matters were addressed in the context of our audit of
the Financial Report as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
Goodwill (Goodwill - $156.3m, Impairment – $110.4m)
Refer to Note C6 Intangible assets to the financial report
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s annual
testing of goodwill for impairment, given the
size of the balance (being 18.5% of total assets).
Certain conditions
the Group
increased the judgement applied by us when
evaluating the evidence available. We focussed
on the significant forward-looking assumptions
the Group applied in their fair value less costs of
disposal models including:
impacting
•
•
Forecast cash flows, growth rates and
terminal growth rates – the Group has
experienced significant business disruption
and has a history of operating losses as a
result of the impacts of certain market
forces. In addition, the Group experienced
inflationary pressures during the current
year. This impacted the Group through the
hibernation/closure of selected businesses,
increase in parts costs and a reduction in the
demand for certain products and services.
These conditions and the uncertainty of their
continuation
increase the possibility of
goodwill being impaired, plus the risk of
inaccurate forecasts or a significantly wider
range of possible outcomes for us to
consider. Assumptions
in the
Group’s forecast cash flows are also
sensitive to market changes;
included
Forecast growth rates and terminal growth
rates – in addition to the uncertainties
described above, the Group’s models are
highly sensitive to small changes in these
assumptions, reducing available headroom.
This drives additional audit effort specific to
their
consistency of
and
application to the Group’s strategy; and
feasibility
• Discount rates - these are complicated in
nature and vary according to the conditions
and environment
specific Cash
Generating Unit (CGU) is subject to from
time to time, and the model’s approach to
incorporating risks into the cash flows or
discount rates. The Group’s modelling is
the
Working with our valuation specialists, our procedures
included:
• Consideration of the appropriateness of the fair
value less costs of disposal method applied by the
Group to perform the annual test of goodwill for
impairment
of
against
accounting standards;
requirements
the
• Assessment of the integrity of the fair value less
costs of disposal models used, including the
accuracy of the underlying calculation formulas;
• Comparison of the forecast cash flows contained
in the fair value less costs of disposal models to
forecasts approved by the Board;
• Assessment of the accuracy of previous Group
forecasts to inform our evaluation of forecasts
incorporated in the models. We applied increased
scepticism to current period forecasts in areas
where previous forecasts were not achieved,
future uncertainty
is
expected;
is greater or volatility
• Assessment of the sensitivity of the models by
varying key assumptions, such as forecast growth
rates, terminal growth rates and discount rates,
within a reasonably possible range. We considered
the interdependencies of key assumptions when
performing the sensitivity analysis and what the
Group considers to be reasonably possible;
• Challenge of the Group’s significant forecast cash
flows and growth assumptions in light of the
expected continuation of depressed market
conditions
and other uncertain economic
conditions. We compared terminal growth rates
to published studies of industry trends and
expectations, and considered differences for the
Group’s operations. We focused on the expected
rate of recovery for the Group and what the Group
considers as their future business model as a
result of pricing negotiations when assessing the
feasibility of the Group’s forecast cash flows. We
105
Annual Report | 30 June 2023 highly sensitive to small changes in the
discount rate.
used our knowledge of the Group, business and
customers, and our industry experience.
• Checking consistency of growth rates to the
Group’s stated plans and strategy, past
performance of CGUs and our experience
regarding the feasibility of these in the industry in
which they operate;
•
Independent development of a discount rate range
considered comparable using publicly available
market data for comparable entities, adjusted by
risk factors specific to the Group and the industry
it operates in;
• Recalculation of the impairment charge against the
recorded amount disclosed;
• Assessment of the disclosures in the financial
report using our understanding of the issues
obtained from our testing and against the
requirements of accounting standards.
The Group uses complex models to perform
their annual testing of goodwill for impairment.
The models are largely manually developed and
use a range of internal and external sources as
inputs to the assumptions. The Group has not
met prior forecasts in certain areas, raising our
concern for reasonableness of current forecasts.
Complex modelling, using
forward-looking
assumptions, tend to be prone to greater risk for
potential bias, error and inconsistent application.
These conditions necessitate additional scrutiny
by us, in particular to address the objectivity of
sources used
their
consistent application.
for assumptions, and
In addition to the above, the carrying amount of
the net assets of the Group, before impairment
of goodwill, exceeded the Group’s market
the
capitalisation at year end,
possibility of goodwill being impaired. This
further increased our audit effort in this key audit
area.
increasing
The Group recorded an impairment charge of
$57.7m against goodwill in relation to Capital
Smart and $52.6m in relation to AMA Collision,
the Group’s
increasing
impairment testing to small changes in inputs to
the models for these CGUs. This further
increased our audit effort in this key audit area.
the sensitivity of
We involved valuation specialists to supplement
our senior audit team members in assessing this
key audit matter.
106
highly sensitive to small changes in the
used our knowledge of the Group, business and
discount rate.
customers, and our industry experience.
• Checking consistency of growth rates to the
Group’s
stated
plans
and strategy,
past
performance of CGUs
and our experience
regarding the feasibility of these in the industry in
which they operate;
•
Independent development of a discount rate range
considered comparable using publicly available
market data for comparable entities, adjusted by
risk factors specific to the Group and the industry
it operates in;
• Recalculation of the impairment charge against the
recorded amount disclosed;
• Assessment of the disclosures in the financial
report using our understanding of the issues
obtained from our testing and against the
requirements of accounting standards.
The Group uses complex models to perform
their annual testing of goodwill for impairment.
The models are largely manually developed and
use a range of internal and external sources as
inputs to the assumptions. The Group has not
met prior forecasts in certain areas, raising our
concern for reasonableness of current forecasts.
Complex modelling, using
forward-looking
assumptions, tend to be prone to greater risk for
potential bias, error and inconsistent application.
These conditions necessitate additional scrutiny
by us, in particular to address the objectivity of
sources used
for assumptions, and
their
consistent application.
In addition to the above, the carrying amount of
the net assets of the Group, before impairment
of goodwill, exceeded the Group’s market
capitalisation at year end,
increasing
the
possibility of goodwill being impaired. This
further increased our audit effort in this key audit
area.
The Group recorded an impairment charge of
$57.7m against goodwill in relation to Capital
Smart and $52.6m in relation to AMA Collision,
increasing
the sensitivity of
the Group’s
impairment testing to small changes in inputs to
the models for
these CGUs. This further
increased our audit effort in this key audit area.
We involved valuation specialists to supplement
our senior audit team members in assessing this
key audit matter.
Revenue ($869.6m)
Refer to Note B2 to the financial report
The key audit matter
How the matter was addressed in our audit
The Group has several revenue streams across
each of their different operating segments. The
Group’s main revenue streams include:
-
-
Vehicle panel repair services; and
of
Sale
accessories.
automotive
parts
and
Revenue was a key audit matter due to the value
of the balance, and significant audit effort we
have applied
the Group’s
in assessing
recognition and measurement of revenue.
This was driven from the high volume of
revenue transactions.
Our procedures included:
•
Evaluation of the appropriateness of the Group’s
accounting policies for revenue recognition for
each significant revenue stream against the
requirements of AASB 15 Revenue
from
Contracts with Customers and our understanding
of the business;
• Reading a sample of customer contracts to
understand the key terms of the arrangements
and the performance obligations;
included
• On a sample basis for each significant revenue
stream, testing the existence, accuracy and timing
of revenue recognised by the Group. Examples of
customer
procedures
confirmations, checking transactions to underlying
documentation
customer
collection notes or equivalent documents,
photographs of vehicles in repair, and customer
prepared remittance statements, and checking
customer receipts to bank statements.
obtaining
signed
such
as
•
Evaluation of the adequacy of the disclosures
made in Note B2 against the requirements of the
accounting standards.
107
Annual Report | 30 June 2023 Other Information
Other Information is financial and non-financial information in AMA Group Limited’s annual reporting which
is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the
Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error
• assessing the Group and Company's ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless they either intend to liquidate the
Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our Auditor’s Report.
108
Other Information
Other Information.
Other Information is financial and non-financial information in AMA Group Limited’s annual reporting which
is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error
• assessing the Group and Company's ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless they either intend to liquidate the
Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration
Report of AMA Group Limited for the
year ended 30 June 2023, complies
with Section 300A of the Corporations
Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages 37
to 47 of the Directors’ report for the year ended 30 June 2023.
Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with
Australian Auditing Standards.
KPMG
Maritza Araneda
Partner
Melbourne
7 September 2023
109
Annual Report | 30 June 2023 Shareholder information
Additional Information
In accordance with ASX Listing Rules the shareholder information set out below is current as of 4 August 2023.
Distribution of shareholdings
The total number of shareholders in AMA Group Limited (ASX: AMA) was 3,760. The voting rights are one vote per share.
There were 1,073,070,217 shares on issue. The distribution of shareholders was as follows:
Share grouping
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
Total
holders
Number of
shares
Percentage of
issued shares
448
1,010
559
1,349
394
187,260
2,796,957
4,334,376
47,647,840
1,018,103,784
0.02
0.26
0.40
4.44
94.88
3,760
1,073,070,217
100.00
There were 1,175 shareholders holding less than a marketable parcel of $500 worth of shares, based on the closing market
price on 4 August 2023 of $0.14 per share.
Twenty largest shareholders
Name
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
ACN 162 128 501 PTY LTD
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
UBS NOMINEES PTY LTD
SANDHURST TRUSTEES LTD
SANDMAN 1 NOMINEES PTY LTD
THORNEY OPPORTUNITIES LTD
DDH GRAHAM LIMITED
BNP PARIBAS NOMS(NZ) LTD
COLINTON CAPITAL PARTNERS PTY LTD
AUTOCO PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
AUSTIN SUPERANNUATION PTY LTD
VENN MILNER SUPERANNUATION P/L
MISSY NOMINEES PTY LTD
Total
Number of
shares
Percentage of
issued shares
186,569,241
129,626,461
115,717,244
100,703,984
82,367,030
71,120,292
43,478,261
27,500,000
18,336,265
16,958,264
13,269,843
12,000,000
10,000,000
8,961,649
6,847,351
6,166,055
5,240,092
5,112,065
5,000,000
4,544,555
869,518,652
17.39
12.08
10.78
9.38
7.68
6.63
4.05
2.56
1.71
1.58
1.24
1.12
0.93
0.84
0.64
0.57
0.49
0.48
0.47
0.42
81.03
Substantial shareholders
Substantial holders in AMA Group Limited as detailed in the most recent public filings of Form 604 - Notice of change of
interests of substantial holder are set out below.
Name
AustralianSuper Pty Ltd
Azvalor Asset Management SGIIC SA
Securities subject to escrow
Name
Fully Paid Ordinary Quoted
* Subject to non-date escrow terms.
110
Number of
shares
Percentage of
issued shares
112,369,260
99,715,959
10.49
8.92
Number of
shares
530,634
Date escrow
period ends
*
Shareholder information
Glossary
Abbreviation
Meaning
Abbreviation
Meaning
ADAS
AGM
APAS
ARC
ASX
ATSR
AUD
BBSY
CEO
CFO
CGU
COO
Advanced Driver Automation System
Annual General Meeting
Automotive Parts and Services
(previously a division of AMA Group)
Audit and Risk Committee
Australian Stock Exchange
Absolute Total Shareholder Return
Australian dollar
Bank Bill Swap Rate
Chief Executive Officer
Chief Financial Officer
Cash Generating Unit
Chief Operating Officer
CODM
Chief Operating Decision Maker
CPI
DCF
EBIT
EBITDA
EBITDAI
EPS
ESG
Consumer Price Index
Discounted cash flow
Earnings before interest and tax
Earnings before interest, tax,
depreciation and amortisation
Earnings before interest, tax,
depreciation, amortisation
and impairment
Earnings Per Share
Environmental, Social & Governance
FCCR
GESP
GST
KMP
LTI
LTIFR
NPS
NZ
OEM
PC
PCP
PIK
PRP
RIFR
Fixed Charge Cover Ratio
General Employee Share Plan
Goods and Services Tax
Key Management Personnel
Long-term incentive
Long Term Injury Frequency Rate
Net Promoter Score
New Zealand
Original equipment manufacturer
People Committee
Prior comparative period
Payment in kind
Performance Rights Plan
Relative Injury Frequency Rate
RTRS
Relative Total Shareholder Return
STI
TFR
TSR
USD
VWAP
WGEA
Short-term Incentive
Total Fixed Remuneration
Total Shareholder Return
US Dollar
Volume Weighted Average Price
Workplace Gender Equality Agency
Designed and produced by Tim Hamilton
111
Annual Report | 30 June 2023 AMA Group Limited
ABN 50 113 883 560
Level 13
484 St Kilda Road
Melbourne VIC 3004
amagroupltd.com
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