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AMA - AMA Group

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morton_mains

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A new thread. Company listed 2006, profitable, motoring after care market aggregator. Got to a high of $1, gradual decline till today to 23c

Todays trading alert to 31/12/08 puts substance to decline.

$31m mkt cap c.f. turnover $79m immediately alerts the value investor, enough to interest any follower of WB!

Co.financials appear reasonable on the whole, but buying businesses at value of goodwill is problematic at the best of times.

The only negative from examining the annual report was the high negative operating cashflow from +$6m (2007) to negative $1m (2008). Appears to be a combination of $10m increase in debtors, which we learn today included $4.9m for an Alloair [new division] customer

Good businesses but will need to get cash positive again
 
Re: AMA - Allomak

Bad news out for this company today, see the announcment.

Usually a phrase like "The downturn in first quarter EBIT is also at a level that generates an interest rate cover ratio below the quarterly covenant level specified in Allomak’s banking facility" would bring in the shorters big time. :(

I think this company might be lucky and avoid such a fate, probably only cause I hold.... :eek:

or maybe this....
"The business however, continues to generate operating profits and is working with its lenders to ensure ongoing continuation of the facilities under normal trading terms. "
 
Re: AMA - Allomak

Well that was pretty quick for the market to make an ass of me - down 70% the day after my hopeful comments. Turnover $79m and mkt cap $9m definitely value investor territory.
 
Re: AMA - Allomak

I had a look at this stock about 6 months ago after reading their December announcements which from memory had 100%+ increase in revenue, strong EBIT growth and from the outside looked to be well managed.

The one thing that has seen this stock suffer is the industry it operates in …automotive…the macroeconomic conditions that this industry deals with means that they are very sensitive to downturns in the market. Automotive co.'s general feel the pinch pretty hard. To further strengthen this argument, they are a company who provides aftermarket products for cars so the less cars consumers buy the less work they have.

I have just had a look again at this stock, it is due to go Ex-Div on Monday @ 2.1c/share fully franked so we more than likely will see another hit on Monday.

The only reason I would have thought about investing in it today would be to collect the dividend but wouldn't have fit my criteria fundamentally. If this stock can hang in there during these times, I would revisit this stock as historically it has been well managed and when people start buying cars again they will no doubt buy up big on the aftermarket extra’s.
 
Re: AMA - Allomak

in four weeks it has gone from a low of 4.4 to 14.5. trading has been mostly in 4c range for months. The market cap is now a more sensible $40m.

Rerating came from $2m legal settlement receivable that will make a dent in the debt. The co. is operating profitably and cashflow good, the legacy of the dreadful past gone.

Share demand coming from directors only previously but i suspect others now who can hold for long term till dividend.

Stunning lift that i didn't think would happen as quickly, as the buy depth seemed thin but this is being chased, with good reason. I would not be surprised to see a MBO
 
Re: AMA - Allomak

mgm1a said:
in four weeks it has gone from a low of 4.4 to 14.5. trading has been mostly in 4c range for months. The market cap is now a more sensible $40m.

Rerating came from $2m legal settlement receivable that will make a dent in the debt. The co. is operating profitably and cashflow good, the legacy of the dreadful past gone.

Share demand coming from directors only previously but i suspect others now who can hold for long term till dividend.

Stunning lift that i didn't think would happen as quickly, as the buy depth seemed thin but this is being chased, with good reason. I would not be surprised to see a MBO
Click to expand...

I bought 150K shares @0.043 and could not get more shares before it went up. AMA is essentially having been bought out by its management, and I doubt they will go a step further, especially when Mr. Malone sold his business a few years back.

There is nothing magic about this situation nor people should have illusion about the prospects of the businesses. My plan is to hold the shares until the debt being paid, and the shares get a reasonable multiple on the EBIT.
 
Discussion carried on from my test System thread:

Ves said:
Been watching this one (AMA) myself since the middle of last year. Not sure what to make of it long-term, but they've done fairly well profitability wise and in mending the balance sheet since 2010.
Click to expand...

I have watched AMA since about late 2009 :dunno: added it to a watchlist at 0.06 so fair to say the stock has come along way since then, back in 2009 revenues were falling due to the GFC and debt was to high to maintain with the company running low on cash and looking likely to default at some point...they recapitalised and refinanced under a new CEO and a slow and steady turn around has been the result.

The last cap raising was 12 months ago at 0.35 and the only event of significance has been the Custom Alloy purchase and that doesn't look to out of character, so other than the negative auto sentiment with all the plant closures etc i cannot see anything else that would adequately explain the current share price dip...closed today @ 0.28

Below timeline chart from a recent presentation. http://www.asx.com.au/asxpdf/20131023/pdf/42k75vdrct5308.pdf

And 1 year chart...the SP down trend in early 2013 seems to be a bit of a mystery as well.
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AMA re ASF 2019-05-04.png


AMA looks to be setting up for a breakout of the falling wedge - maybe with another small pullback first.
Price is currently sitting just under the ATH.
 
AMA re ASF 2019-05-21.png


Well it finally set a new high yesterday, closing at $1.24 after gaping up on open. We will see where it heads from here!
 
Hit 15c last week and now bounced to 30c. Interesting looking back that the EPS of 3.97c in FY19 (and -1.68c for HY20) is not that different from 2.72c in FY12 despite revenues increase nearly 10-fold from $63m to $616m. This is because shares outstanding have ballooned from 282m to 739m.

Without the maestro Ray Malone things may be tough for the panel beater from here, particularly with the recent large acquisition and jump in debt to $362m (cf current $207m market cap). Starting to look like 2008/9 scenario for these guys where they had to deeply restructure before thinking about looking to growth by acquisition again.

Still, panel beaters will always be needed while we are driving our own cars and there is value here with average ROIC over last 7 years at 8.1% by my calculations. But bankruptcy risk is a real one in the short term so I still don't have conviction until the picture becomes clearer and/or the price falls below 20c again.
 
Thanks for that. I'd lost track of AMA due to the falling price. I'll place it in my reversal watch list.
 
AMA Grp director buying

Simon Moore
Date of Change 14 – 17 April 2020
Total consideration - $271,400
Acquired on market

Simon Moore
20 - 22 April 2020
Total consideration - $71,000
Acquired on market

Not Held
Sentiment: selling for not much more than book value but debt looked a risk at end fy19
 
Now seems there is some skullduggery with CEO? Cryptic release about a court injunction against removing him from office, which suggests that he at least felt threatened enough to obtain the order. Maybe an employee allegation? Actually I suspect it won't have too much effect on the underlying business but will suck up considerable oxygen until ironed out and doesn't speak worlds for governance.
 
The Board of AMA Group Limited wishes to provide an update in relation to its Chief Executive Officer and Executive Director, Mr Andrew Hopkins.
In late September 2020, the Board received a protected disclosure from an individual employed by the Company. On receipt of these allegations, the Company engaged McGrath Nicol to undertake an independent forensic investigation which has recently completed.
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In the evening of 26 January 2021, Mr Hopkins made an urgent application to the Federal Court of Australia alleging that he is being oppressed as a minority shareholder. The Court made a temporary order that the Company may not dismiss Mr Hopkins from his employment prior to a further hearing on a date which will be fixed for some time next week.
Click to expand...
The Company is defending the legal proceedings, and will not comment further on the matter as it is before the Courts.
Click to expand...
The Board would like to take this opportunity to reiterate that the Company’s three core business units continue to rebound well from the disruptions associated with the COVID-19 Pandemic under the capable leadership of the respective division heads and that the Company will report its first half results to the market next month.
Click to expand...
and SP taking a bit of a dive
1611982021110.png
 
Hasn't gotten much better...

1630646243975.png

Growth is not always a good thing and generally the enemy of profit. Doubling your revenue by buying another business using debt in a low margin and ultra competitive industry; even more so. Icing on the cake is buying said business right before a global pandemic.

Potential turnaround or money pit?
 
And a cap raising...


1631261148583.png


Still curious - if they can fully integrate the SMART (?) acquisition then it could be a strong turnaround
 
Tommy Shelby said:
Hasn't gotten much better..
Click to expand...
AMA has continued to slip, now 26c which is only marginally above the Covid slump.

Last 2 years have been rather underwhelming, and dividends suspended .

Earnings LHS .................................... . . . . . . . . . . . . ........... . . . .............. RHS Return on Equity
1651815209325.png


There should be a sustainable business underneath , somewhere. I see Soul Patts has taken a stake 5.04% totalling SOL + PCG holdings

A "motoring after care market aggregator". lol
 
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