MAGA: Making AMA Great Again

In The Spotlight: AMA Group Ltd (ASX: AMA)
Mathew Cooper joined the AMA Group in September 2021 with an impressive resume.  

He’d spent the previous eight years at major automotive retailing group Bapcor after working in executive roles at the likes of Amcor, General Motors, Metcash and Deloitte.

What he found at AMA proved to be a far cry from what he signed up for.

“When I took on the Chief Operating Officer role at AMA, it was always as a transition to the CEO role.  It is very fair to say that the glossy brochure that was presented to me at the time of my recruitment was not exactly what I found,” he says with a wry smile.

“It has certainly been a very challenging three years since.”

But since Cooper was elevated to the role of CEO of the ASX-listed smash repairer at the end of 2023, he has been refocusing the group on what it does best, operating as a pure collision repair portfolio business with associated services.

Under the new strategy, each business unit - AMA Collision, Capital SMART, Specialist Businesses and Wales - operates with its own brand and offer. The ACM Parts business, now deemed non-core, has been put up for sale.

“We have moved to reduce the corporate nature of the organisation and simplified it into a portfolio-based approach.  You get a greater cost culture in that and eliminate the corporate waste,” Cooper says.

The strategy has been endorsed by a new, leaner board - taking reduced fees - which is determined to align itself with the interests of AMA’s shareholders following a boardroom restructure engineered by Alex Waislitz’s Thorney Investment Group, owner of 11.53 per cent of AMA.  

Importantly the new board boasts real knowledge of AMA and the smash repair industry.

AMA recently completed a fully underwritten capital raising of $125 million, cornerstoned by Thorney, its third raise since 2021.

$50 million has been used to repay existing senior bank debt, while an additional $50 million is now held in a locked account to settle expected redemptions on a convertible note put option, expected in March 2025.

“Thorney have been really supportive of this business for a long time and they backed that up through their investment in the equity raise. They support the management team and the board in terms of its direction,” Cooper says.

"They initiated action to overhaul the board because they believed there was a better alternative.  We have now dealt with the debt overhang, got the balance sheet deleveraged and they are letting us get on with taking on the growth opportunity for this business.”

The restructure coincided with the return to the boardroom of one of AMA’s foundation shareholders, Ray Smith-Roberts, who rejoined as a director in March.  He was previously an executive director of AMA from February 2014 to November 2019.

“For me it has been a long journey. I was part of the team of people that founded AMA.  

I was led to believe there was all this magic in public companies. I soon learned that wasn’t true. You just had to work hard and focus on the things that needed to happen,” Smith-Roberts says.

“I exited the business in 2019 when I felt it had lost its way, and now I have come back because I believe we are unified again. I see the opportunity.  I see a management team not being pulled from pillar to post on shit that doesn’t matter.”

Like Cooper, he welcomes the support of Thorney.

“They aren’t people you want to make too many mistakes with because they don’t take second chances,” he says.

“They now have a board they can trust, that they believe in and has runs on the board for them.  They also have a management team they believe in.  But they want to back the board and management to run the business.  They are all about ‘Stay in the lane, do things right and you will be fine’.”

The boardroom changes also saw AMA board member and insurance industry leader, Brian Austin, elevated to the chairman role.

“I have worked with Brian at a board level for a long time.  He is not focussed on box ticking.  He knows we must be compliant and govern the company properly but ultimately he knows there is much more to growing the business and making it more profitable. It is all about focussing on the things that matter.  He isn’t concerned about the things that don’t matter,” Smith-Roberts says.

Mathew Cooper says he and Austin thus far talk only “as we need to”.

“It is not like we check in every week in a structured manner.  It is a more fluid conversation.  As a CEO I like that,” he says.

“You need someone with Brian’s expertise and experience that you can call upon, but you want to get on with the job of running the organisation as well.”

The AMA businesses now share a common strategic framework and values-based approach to operating.

The overarching value is “Together we do it right”:  A simple statement that is guiding decision making-processes across the business.

Cooper says the firm is also being run according to four core principles.

“We care about each other, we deliver exceptional customer service, we target profitable growth - not grow for growth’s sake as it was historically - and we want to be even better tomorrow,” he says.

“We will invest in the right technologies and train our people to be at the cutting edge of those.”

Cooper and his management team have been staging leadership forums and toolbox talks at all of AMA’s locations across the country.  Its new values are now physically on display in its corporate offices and workshops.

“Mat is doing a very good job at making things simple throughout the organisation. The simplistic, people-driven approach to me is critically important, especially when you are trying to mobilise 3500 people,” Ray Smith-Roberts says.

“That can apply to the customer, the insurer or a team member.  We do what is right, whether anyone is looking or not.  That got lost in recent years.”

While Cooper says there remains opportunities to cut costs across AMA, he stresses the firm cannot “save itself to success.”

“It has to invest to be more productive, to lean into relationships with insurers, and it needs an absolute focus on commercial pricing with those insurers. The fixed price model that exists in the Australian market needs constant vigilance,” he says.

Insurance companies rely on AMA doing a great job as it protects their brand and their customers’ experiences where a claim is made under a motor insurance policy.

“Our company operates in an environment predominantly supporting our Insurance Company customers for the benefit of providing a repair solution for their customers and hence our service is pivotal for Insurers,” says Brian Austin

“We respond to their obligations for their customers and enhance their brand recognition and protection through the valuable services we deliver, so the future is bright for AMA Group, with an exceptional team, strong industry fundamentals, and a wide geographical spread of business units.”

AMA is currently looking to hire 150 workers.  Some will come from offshore, notably the West African nation of Ghana.

It plans to open 3-5 greenfields sites a year going forward.  Acquisitions are also on the agenda, especially in regional hubs along the eastern seaboard such as Toowoomba, Dubbo and Orange.

“There are alot of small smash repair business with older proprietors who want to leave the industry and need to sell to someone,” Cooper says.

While the past three years in his AMA journey have been anything but what he expected, he says you learn the most in life when your back is to the wall.

“You get more resilient as you address those challenges,” he says, noting that humility is now a value that pervades AMA.  It will be central to its turnaround.

“I saw some behaviour over the last two years that was arrogant,” he declares.

“Humility is a very important trait in business.  It will hold us in good stead going forward.”

About The Company

AMA Group Ltd (ASX: AMA)

AMA Group Ltd facilities in Australia and New Zealand. It operates through segments, Vehicle Collision Repairs and Wales. The company offers rapid repairs of cars and specialized facilities for all commercial vehicle repairs. It also provides AMA Collision, AMA Prestige, ADAS calibration services, and Mechanical collision repair services. The company was formerly known as Allomak Limited and changed its name to AMA Group Limited in December 2009. AMA Group Limited was incorporated in 2005 and is based in Melbourne, Australia.

Market Capitalisation: $248,694,967

Share Price: $0.052

Historical Dividend Yield (%): 0%

Board of Directors & Management

• Brian Austin, Chair

• Joanne Dawson, Non-Executive Director

• David Goldstein, Non-Executive Director

• Ray Smith-Roberts, Non-Executive Director

• Mathew Cooper, Group Chief Executive

*** Financials as of COB 26.8.24