Full Year 2026 AMA Group Ltd Earnings Call

August 21, 2026

Speaker #1: Thank you for standing by, and welcome to the AMA Group FY26 results call. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the AMA Group FY26 results call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question via the phone, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via the webcast, please enter it into the Ask a Question box and click submit. I would now like to hand the conference over to Mr. Ray Smith-Roberts, Group Managing Director. Please go ahead.

Speaker #1: If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad.

Speaker #1: If you wish to ask a question via the webcast, please enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Mr. Ray Smith-Roberts, Group Managing Director.

Speaker #1: Please go ahead.

Speaker #2: Good morning, everyone. Thank you for taking the time to join us for this presentation of the AMA Group FY26 year-end results. For those joining us via webcast, you should be able to view the presentation on your screen.

Ray Smith-Roberts: Good morning, everyone. Thank you for taking the time to join us for this presentation of the AMA Group FY26 year-end results. For those joining us via webcast, you should be able to view the presentation on your screen. If you are joining us by teleconference, you should have access to our investor presentation via the ASX platform or our company website. I will begin today's presentation with a business update, along with the details of our portfolio business results. I will then hand over to our Group CFO, Domenic Romanelli, who will take you through the group financials. I will then return to cover the outlook. We will be taking questions throughout the webcast facility today. You can submit these at any time during the presentation, and we will address them at the end. Referring to our presentation, let's begin on slide 4.

Speaker #2: If you are joining us by teleconference, you should have access to our Investor Presentation via the ASX platform or our company website. I will begin today's presentation with the business update, along with the details of our portfolio business results.

Speaker #2: I will then hand over to our Group CFO, Dominic Romanelli, who will take you through the group financials. I will then return to cover the outlook.

Speaker #2: We will be taking questions throughout the webcast facility today. You can submit these at any time during the presentation, and we will address them at the end.

Speaker #2: So, referring to our presentation, let's begin on slide 4. I'm very pleased to report that AMA Group produced a record revenue of $1,039,000,000 in FY26, leading to a full-year FY26 pre-AASB 16 normalized EBITDA of $68,000,000.

Ray Smith-Roberts: I am very pleased to report that AMA Group produced a record revenue of AUD 1 billion and 39 million in FY26, leading to a full-year FY26 pre AASB 16 normalized EBITDA of AUD 68 million. This is up 8.6% on FY25 and reflects growth in the majority of our businesses despite Q4, which is traditionally the strongest quarter for repair volumes being affected by elevated fuel prices and public transport concessions. Operating cash flows after lease payments were AUD 32.8 million for the financial year, despite higher income tax payments of AUD 12.5 million in FY26, an increase of AUD 11.6 million on FY25. This is a solid result which was delivered for the full year, and it is headlined by a few things. Continued strong performance in our Capital S.M.A.R.T. network, which achieved an EBITDA margin of 10.6%. Strong growth in the Specialist division.

Speaker #2: This is up 8.6% on FY25 and reflects growth in the majority of our businesses, despite Q4—which is traditionally the strongest quarter for repair volumes—being affected by elevated fuel prices and public transport concessions.

Speaker #2: Operating cash flows after lease payments were $32.8 million for the financial year. Despite higher income tax payments of $12.5 million in FY26, this was an increase of $11.6 million on FY25.

Speaker #2: This is a solid result, which was delivered for the full year, and it's headlined by a few things: continued strong performance in our Capital Smart network, which achieved an EBITDA margin of 10.6%.

Speaker #2: Strong growth in our Specialist division and ACM Parts went from a significant loss in FY25 to a $2.3 million EBITDA in FY26, reflecting its stronger performance and operating improvements.

Ray Smith-Roberts: ACM Parts went from a significant loss in FY25 to a AUD 2.3 million EBITDA in FY26, reflecting its stronger performance and operating improvements. Now to talk about our businesses. Capital S.M.A.R.T. achieved an EBITDA of AUD 51.9 million in FY26, down from AUD 58.4 million, but certainly in line with expectations due to the higher incentives obtained in the prior year. AMA Collision showed volume, revenue, and EBITDA growth with continued focus on process improvements to enhance margins. Our Wales business performance was impacted by softer work provisions of large crash repair work, but pleasingly, just bucking the trend, Q4 of FY26 was the strongest quarter of our financial year. Our Specialist business has seen considerable growth and improved financial performance with increased capability and capacity for mechanical work and ADAS calibrations, along with continued improvement in our prestige sites.

Speaker #2: Now, to talk about our businesses. Capital Smart achieved an EBITDA of $51.9 million in FY26, down from $58.4 million, but certainly in line with expectations.

Speaker #2: Due to the higher incentives obtained in the prior year, AMA Collision showed volume, revenue, and EBITDA growth, with continued focus on process improvements to enhance margins.

Speaker #2: Our Wales business performance was impacted by softer work provisions of large crash repair work, but pleasingly, bucking the trend, Q4 of FY26 was the strongest quarter of our financial year.

Speaker #2: Our specialist business has seen considerable growth and improved financial performance, with increased capability and capacity for mechanical work and ADAS calibrations, along with continued improvement in our prestige sites.

Speaker #2: ACM Parts is now operating in a consistent and profitable manner, reflecting stronger performance and operating improvements. AMA’s vertical integration—combining broader vehicle repair services with automotive parts sourcing and supply—enables greater control over our repair quality, turnaround times, and costs, providing us with a unique competitive advantage, now with a much wider value chain.

Ray Smith-Roberts: ACM Parts is now operating at a consistent and profitable manner, reflecting stronger performance and operating improvements. AMA's vertical integration, combining broader vehicle repair services with automotive part sourcing and supply, enables greater control over our repair quality, turnaround times, and costs, providing us with a key unique competitive advantage now with a much wider value chain. Underlying financial performance improvement and key strategic growth will continue into FY27 and beyond and will be covered later when we talk in the outlook. Now to slide 5 on Capital S.M.A.R.T. Revenue was steady in FY26 at AUD 490.7 million. Normalized FY26 pre-AASB 16 EBITDA was AUD 51.9 million, down on FY26 as outlined. Capital S.M.A.R.T. continues to deliver improved customer outcomes in conjunction with our key customer, Suncorp Group. We achieved our EBITDA margin target of 10.6%.

Speaker #2: Underlying financial performance improvement and key strategic growth will continue into FY27 and beyond, and will be covered later when we talk in the outlook.

Speaker #2: Now, to slide 5 in Capital Smart. Revenue was steady in FY26 at $490.7 million. Normalized FY26 pre-AASB 16 EBITDA was $51.9 million, down on FY26 as outlined.

Speaker #2: Capital Smart continues to deliver improved customer outcomes in conjunction with our key customer, Suncorp. We achieved our EBITDA margin target of 10.6%. Strong cost control measures and productivity initiatives have preserved these margins, offsetting the impact from volume incentives received in the prior period.

Ray Smith-Roberts: Strong cost control measures and productivity initiatives have preserved these margins, offsetting the impact from volume incentives received in the prior period. There has been a reduction in the number of drivable repairs since the start of the geopolitical events in the Middle East, which commenced in March. This has reduced the amount of drivable work, largely from customers delaying minor repairs and with some reduced road use. We opened three new sites in FY26, one in South Australia, one in New South Wales, and one in Tasmania. These were all areas where the network was underrepresented. We also closed two sites, one in Metro Melbourne and one in New Zealand. We will continue to grow, refresh, and rationalize the network with customer needs and market opportunities. There is a continued focus to improve the effectiveness of our highly skilled team through targeted initiatives and systems, processes, tools, and technology.

Speaker #2: There has been a reduction in the number of drivable repairs since the start of the geopolitical events in the Middle East, which commenced in March.

Speaker #2: This has reduced the amount of drivable work, largely from customers delaying minor repairs and, with some reduced road use. We opened three new sites in FY26: one in South Australia, one in New South Wales, and one in Tasmania.

Speaker #2: These were all areas where the network was underrepresented. We also closed two sites—one in metro Melbourne and one in New Zealand. We will continue to grow, refresh, and rationalize the network according to customer needs and market opportunities.

Speaker #2: There is a continued focus on improving the effectiveness of our highly skilled team through targeted initiatives, as well as systems, processes, tools, and technology. Capital Smart, in FY27, will seek further improvement and growth from capacity management opportunities.

Ray Smith-Roberts: Capital S.M.A.R.T. in FY27 will seek further improvement and growth from capacity management opportunities, pursued by extending our customer base and service offerings and through these targeted initiatives and systems and process, tools and technology, as mentioned. Turning to slide 6 and AMA Collision. AMA Collision remains on the path of improved network optimization and capability, delivering higher volume, revenue, and earnings than the prior financial year. Revenue increased by AUD 19.6 million to AUD 379.7 million. An increase of 5.4%, and our normalized FY26 pre-AASB 16 EBITDA of AUD 10.6 million is up 43.2% on FY25. This was achieved on the back of continued focus on an investment in the network footprint and optimization with various expansions, relocations, and rationalizations completed, and we have more to come in the new financial year.

Speaker #2: Pursued by extending our customer base and service offerings, and through these targeted initiatives and systems and process, tools, and technology as mentioned. Turning to slide 6 and AMA Collision.

Speaker #2: AMA Collision remains on the path of improved network optimization and capability, delivering higher volume, revenue, and earnings than the prior financial year. Revenue increased by $19.6 million to $379.7 million, an increase of 5.54%, and our normalized FY26 pre-AASB16 EBITDA of $10.6 million is up 43.2% on FY25.

Speaker #2: This was achieved on the back of continued focus on, and investment in, the network footprint and optimization, with various expansions, relocations, and rationalizations completed. We have more to come in the new financial year.

Speaker #2: Further improvement will continue in FY27, driven by increased margins and volumes, with the business focusing on improving the team's capability by embedding best-practice operational models that deliver consistent systems, processes, and behaviors.

Ray Smith-Roberts: Further improvement will continue in FY27, driven by increased margins and volumes by the business focusing on improving the team's capability by embedding best practice operational models, delivering consistent systems, processes, and behaviors. Current economic conditions are shifting available work mix opportunities with a skew to more non-drivable complex repairs. Pleasingly, insurance relationships continue to improve and strengthen with volume and market share growth seen across most major insurers. As said, further improvement will continue in FY27, driving increased margins and volumes. Now to slide 7. Our Wales business delivered a normalized pre-AASB 16 EBITDA of AUD 7.7 million in FY26, down AUD 2.8 million from FY25. Wales experienced a shift in work mix through this year with reduced claim volumes and large scale repairs, as well as the deferral of non-urgent repairs impacting growth, particularly in New South Wales and Western Australia.

Speaker #2: Current economic conditions are shifting available work mix opportunities, with a skew towards more non-drivable complex repairs. Pleasingly, insurance relationships continue to improve and strengthen, with volume and market share growth seen across most major insurers.

Speaker #2: As said, further improvement will continue in FY27, driving increased margins and volumes. Now to slide 7. Our Wales business delivered a normalized pre-AASB16 EBITDA of $7.7 million in FY26, down $2.8 million from FY25.

Speaker #2: Wales experienced a shift in work mix through this year, with reduced claim volumes and large-scale repairs, as well as the deferral of non-urgent repairs impacting growth, particularly in New South Wales and Western Australia.

Speaker #2: These factors are expected to abate, with more large-scale repairs expected to return in the next 12 months. Together with other revenue opportunities growing—we have already seen evidence of this in the last quarter—this leads to the expectation that Wales will continue to grow in FY27.

Ray Smith-Roberts: These factors are expected to abate with more large scale repairs expected to return in the next 12 months, together with other revenue opportunities growing. We have already seen evidence of this in the last quarter, leading to the expectations that Wales will continue to grow in FY27. The business continues to strengthen its relationship with both market-leading insurers and smaller insurers who are seeking a preferred repairer, as well as continue to expand its service to fleet and new customers with different types of services and repairs, including partnerships with new heavy vehicle market entrants, machinery, motor home, and specialist equipment suppliers. On to slide 8, our Specialist Businesses. The Specialist Businesses achieved strong growth with a further runway to expand. Revenue in FY26 was AUD 65.6 million, an increase of AUD 9.3 million or 16.5%.

Speaker #2: The business continues to strengthen its relationship with both market-leading insurers and smaller insurers who are seeking a preferred repairer, as well as continuing to expand its service to fleet and new customers with different types of services and repairs, including partnerships with new heavy vehicle market entrants, machinery, motorhome, and specialist equipment suppliers.

Speaker #2: On to slide 8, our Specialist business. The Specialist business achieved strong growth, with further runway to expand. Revenue in FY26 was $65.6 million, an increase of $9.3 million, or 16.5%.

Speaker #2: Normalized FY26 EBITDA was $5.6 million, a significant $4.1 million increase on the prior year, with a significantly improved EBITDA margin now at 8.6%. The mechanical and ADAS business capacity increased through the expansion of our ADAS calibration and mechanical service offering, with further opportunity available through expansion where opportunity exists within the current network.

Ray Smith-Roberts: Normalized FY26 EBITDA was AUD 5.6 million, a significant AUD 4.1 million increase on the prior year, with a significantly improved EBITDA margin now at 8.6%. The mechanical and ADAS business capacity increased through the expansion of our ADAS calibration and mechanical service offering, with further opportunity available through expansion where opportunity exists within the current network. This will continue to grow positively and make a substantial contribution to the group's profitability, delivering additional incremental EBITDA in FY27. Development plans continue with further expansion planned for a business that is quickly becoming a meaningful part of our diversified group earnings. The prestige sites in FY26 revenue and EBITDA were ahead of the prior financial year. Improvements were driven by best practice operational models being embedded, consistency continuing to enhance capability, which is strengthening our financial performance.

Speaker #2: This will continue to grow positively and make a substantial contribution to the Group's profitability, delivering additional incremental EBITDA in FY27. Development plans continue, with further expansion planned for a business that is quickly becoming a meaningful part of our diversified group earnings.

Speaker #2: The prestige sites in FY26 revenue and EBITDA were ahead of the prior financial year. Improvements were driven by best practice operational models being embedded, consistency, and continuing to enhance capability, which is strengthening our financial performance.

Speaker #2: We have achieved good progress at the two Queensland sites, while the two sites in Victoria have been impacted by lower available volume. We have strengthened our relationships across our key OEM and insurance partners.

Ray Smith-Roberts: We have achieved good progress at the 2 Queensland sites, while the 2 sites in Victoria have been impacted by lower available volume. We have strengthened our relationships across our key OEM and insurance partners. Now on to slide 9, our ACM Parts business. ACM Parts is producing consistent profitability month on month. The ACM Parts pre-AASB 16 normalized EBITDA was AUD 2.3 million, up AUD 7 million on the prior financial year. There was a significant uplift in the financial performance as key initiatives relating to recycled, parallel, and aftermarket parts and consumables have yielded very positive results. There will be ongoing investment in inventory management and digital sales channels, improving customer access and margins. The network optimization strategy has been very successful, with the relocation of our site in Queensland to a more fit-for-purpose facility now complete and some further optimization works underway in our Western Australian facility.

Speaker #2: Now on to slide 9, our ACM Parts business. ACM Parts is producing consistent profitability month-on-month. The ACM Parts pre-AASB 16 normalized EBITDA was $2.3 million, up $7 million on the prior financial year.

Speaker #2: There was a significant uplift in the financial performance, as key initiatives relating to recycled, parallel, and aftermarket parts and consumables have yielded very positive results.

Speaker #2: There will be ongoing investment in inventory management and digital sales channels, improving customer access and margins. The network optimization strategy has been very successful, with the relocation of our site in Queensland to a more fit-for-purpose facility now complete, and some further optimization works underway in our Western Australian facility.

Speaker #2: Procurement continues to be one of business's biggest opportunities. With continued focus on supply chain and procurement efficiency and sustainability, the initiatives are ongoing.

Ray Smith-Roberts: Procurement continues to be one of the business' biggest opportunities. With continued focus on supply chain and procurement efficiency and sustainability, the initiatives are ongoing. ACM now is also a strategically important part of our diversified group earnings and repair network capability and provides a positive differentiation to our market competitors and a significant competitive advantage. I will now hand you over to Dom to take you through the group financials.

Speaker #2: ACM is now also a strategically important part of our diversified group earnings and repair network capability, and provides a positive differentiation to our market competitors and a significant competitive advantage.

Speaker #2: I will now hand you over to Don, who will take you through the group financials.

Speaker #3: Thanks, Ray, and good morning, everyone. Slide 11 is a summary of the full-year FY26 financial performance. The financial performance is presented on a post-AASB 16 basis below EBITDA.

Domenic Romanelli: Thanks, Ray, and good morning, everyone. Slide 11 is a summary of the full year FY26 financial performance. The financial performance is presented on a post AASB 16 basis below EBITDA. However, we have included supplementary analysis on slide 19, which provides a comparison of full year FY26 results on a pre and post AASB 16 basis. As Ray has outlined, our FY26 financial performance is a continued improvement on FY25, with revenues up AUD 25.4 million or 2.5% to a record AUD 1,039 million and a normalized pre-AASB 16 EBITDA of AUD 68 million, up AUD 5.4 million or 8.6% on FY25. This reflected on an EBITDA margin improvement from 6.2% to 6.5% for FY26. This uplift was largely driven by continued operational performance improvement of our AMA Collision, Specialist Businesses, and ACM Parts businesses. Finance costs in total were down AUD 8.7 million for FY26.

Speaker #3: However, we have included supplementary analysis on slide 19, which provides a comparison of full-year FY26 results on a pre- and post-AASB 16 basis. As Ray has outlined, our FY26 financial performance is a continued improvement on FY25.

Speaker #3: With revenues up $25.4 million, or 2.5%, to a record $1,039 million, and a normalized pre-AASB16 EBITDA of $68 million, up $5.4 million, or 8.6% on FY25.

Speaker #3: This reflected an EBITDA margin improvement from 6.2% to 6.5% for FY26. This uplift was largely driven by continued operational performance improvement of our AMA Collision Specialist and ACM Parts businesses.

Speaker #3: Finance costs in total were down $8.7 million for FY26. Finance costs - other - reduced by $12.7 million for the full year, due to the improved cost of funding and debt levels following the refinancing of the Group's senior bank debt in the prior financial year.

Domenic Romanelli: Finance costs other reduced by AUD 12.7 million for the full year due to the improved cost of funding and debt levels following the refinancing of the group's senior bank debt in the prior financial year. The prior period included one-off impacts from prior refinancing activities. This benefit was partially offset by an increase of AUD 4 million in the finance costs for our leases, reflecting the increase in market rents and interest rates. The increase in income tax expense reflects the uplift in earnings, particularly within the Capital Smart tax group, and a prior year underprovision adjustment has been corrected during the financial year. These movements resulted in net profit after tax of AUD 7.7 million versus a net loss after tax of AUD 6.2 million in FY25. The normalizations we have called out for FY26 relate to site closure, relocation, and restructuring costs.

Speaker #3: The prior period included one-off impacts from prior refinancing activities. This benefit was partially offset by an increase of $4 million in finance costs for our leases, reflecting the increase in market rents and interest rates.

Speaker #3: The increase in income tax expense reflects the uplift in earnings, particularly within the Capital Smart Tax Group, and the prior year under-provision adjustment has been corrected during the financial year.

Speaker #3: These movements resulted in net profit after tax of $7.7 million versus a net loss after tax of $6.2 million in FY25. The normalizations we have called out for FY26 relate to site closure, relocation, and restructuring costs.

Speaker #3: The normalization in the corresponding period of $3.5 million related to a legal settlement claim relating to an earnout of an acquisition that took place in 2018.

Domenic Romanelli: The normalization in the corresponding period of AUD 3.5 million related to a legal settlement claim relating to an earn-out of an acquisition that took place in 2018. Pleasingly, with the net profit after tax produced in FY26, together with strong operating cash flows and a robust balance sheet, the board determined it appropriate to declare a fully franked dividend of half a cent per share. This is the first dividend AMA Group has declared since 2019. Turning to slide 12 and the summary financial position. We ended the full year to 30 June 2026 with net debt of AUD 18.4 million, a slight increase from the 30 June 2025 balance of AUD 17.7 million. The group continues to meet all its financial covenants and expects to operate within them for the next 12 months. We also completed a one for 10 share consolidation during the financial year.

Speaker #3: Pleasingly, with the net profit after tax produced in FY26, together with strong operating cash flows and a robust balance sheet, the Board determined it appropriate to declare a fully franked dividend of 0.5 cents per share. This is the first dividend AMA has declared since 2019.

Speaker #3: Turning to slide 12 and the summary financial position. We ended the full year to 30 June 2026 with net debt of $18.4 million, a slight increase from the 30 June 2025 balance of $17.7 million.

Speaker #3: The Group continues to meet all its financial covenants and expects to operate within them for the next 12 months. We also completed a 1-for-10 share consolidation during the financial year.

Speaker #3: The group maintains a disciplined approach to capital management, and with our strong balance sheet and operating cash flows, we are well placed to actively manage capital expenditure to deliver organic growth, fund M&A activity to deliver inorganic growth, initiate a dividend program—first time since 2019—and buy back shares via the program initiated this year.

Domenic Romanelli: The group maintains a disciplined approach to capital management, and with our strong balance sheet and operating cash flows, we are well-placed to actively manage CapEx to deliver organic growth, funding M&A activity to deliver inorganic growth, initiation of a dividend program, first time since 2019, and buying back shares via the program initiated this year. Now to slide 13. The group had positive operating cash flows of AUD 32.8 million for the full financial year of FY26, once the principal elements of lease payments are taken into account. This was AUD 11.3 million lower than FY25 and was predominantly due to an increase of AUD 11.6 million in income tax payments as our profits grew and we utilized our historical tax revenue losses within the Capital Smart income tax group. FY26 saw CapEx payments of AUD 30.3 million, a similar figure to the prior financial year.

Speaker #3: Now to slide 13. The Group had positive operating cash flows of $32.8 million for the full financial year of FY26, once the principal elements of lease payments are taken into account.

Speaker #3: This was $11.3 million lower than FY25 and was predominantly due to an increase of $11.6 million in income tax payments as our profits grew and we utilized historical tax revenue losses within the Capital Smart income tax group.

Speaker #3: FY26 saw capital expenditure payments of $30.3 million, a similar figure to the prior financial year. We anticipate capital expenditure to be around $35 million in FY27, with regular maintenance capex in the range of $12.5 million to $15 million on an annual basis.

Domenic Romanelli: We anticipate capital expenditure to be around AUD 35 million in FY27, with regular maintenance CapEx in the range of AUD 12.5 million to AUD 15 million on an annual basis. We expect this level of capital expenditure to decrease once we complete the catch-up capital expenditure from the prior financial years. You should also note that within our operating cash outflows that there were AUD 6 million of cash payments relating to non-recurring expenditure. That is make goods, lease costs on hibernated sites, and redundancies. The group has a healthy cash position at 30 June 2026. Turning to slide 14, normalized corporate costs were AUD 10.1 million, AUD 0.3 million lower than the prior financial year. We anticipate that these will be in the range of AUD 12 million to AUD 13 million in FY27, predominantly from a higher LTI expense in the coming financial year.

Speaker #3: We expect this level of capital expenditure to decrease once we complete the catch-up capital expenditure from the prior financial years. You should also note that, within our operating cash outflows, there were $6 million of cash payments relating to non-recurring expenditure.

Speaker #3: That is make-goods, lease costs on carbonated sites, and redundancies. The Group has a healthy cash position at 30 June 2026. Turning to slide 14.

Speaker #3: Normalized corporate costs were $10.1 million, which is $0.3 million lower than the prior financial year. We anticipate that these will be in the range of $12 million to $13 million in FY27, predominantly due to higher LTI expense in the coming financial year.

Speaker #3: Slides 18 to 21 provide supplementary financial information that will assist with the analysis. I'll now hand back to Ray.

Domenic Romanelli: Slides 18 to 21 provide supplementary financial information that will assist with your analysis. I will now hand back to Ray.

Speaker #2: Thank you, Dom. Now to slide 16 and the outlook. AMA Group continues to progress on its journey of achieving a pre-AASB16 EBITDA percentage of 10% within three years by leveraging our vertically integrated structure and widening value chain.

Ray Smith-Roberts: Thank you, Dom. Now to slide 16 and the outlook. AMA Group continues to progress on its journey of achieving a pre-AASB 16 EBITDA percentage of 10% within three years by leveraging our vertically integrated structure and widening value chain. Capital S.M.A.R.T. is expecting another strong result in FY27 with an EBITDA margin in the range of 10% to 11%. It will achieve this result from initiatives to improve market share of Suncorp's total claims and initiatives to expand its customer base and service lines with a view to growth. AMA Collision will continue to implement operational capability improvements with continued focus and investment on the network footprint optimization. Further improvement in margins and profitability will continue in the new financial year. Wales is expected to have a better year in FY27, with heavy and mixed showing improvement and non-traditional revenue streams now gaining momentum.

Speaker #2: Capital Smart is expecting another strong result in FY27, with an EBITDA margin in the range of 10% to 11%. It will achieve this result from initiatives to improve market share of Suncorp's total claims and initiatives to expand its customer base and service lines, with a view to growth.

Speaker #2: AMA Collision will continue to implement operational capability improvements, with continued focus and investment on network footprint optimization and further improvement in margins and profitability. This will also continue in the new financial year.

Speaker #2: Wales is expected to have a better year in FY27, with a heavier mix showing improvement and non-traditional revenue streams now gaining momentum. The specialist business is expecting further growth in FY27 also.

Ray Smith-Roberts: The Specialist Businesses is expecting further growth in FY27 also. In the mechanical and ADAS business, the roadmap to capture greater level of our mechanical and ADAS service is being rolled out, together with meeting the growth in ADAS demand. Our Prestige sites are continuing to embed best practice operational models and explore growth opportunities. ACM Parts will also continue to grow and improve its profitability in FY27. It provides a positive differentiation to our market competitors and a competitive advantage. Future dividends are expected with the initiation of our dividend program for the first time since 2019. For FY27 financial year, we expect further growth with a normalized pre-AASB 16 to be in the range of AUD 75 million to AUD 80 million, subject to ordinary business trading conditions. Dom and I will now address any questions that you may have.

Speaker #2: In the mechanical and ADAS business, the roadmap to capture a greater level of our mechanical and ADAS service is being rolled out, together with meeting the growth in ADAS demand.

Speaker #2: And our prestige sites are continuing to embed best-practice operational models and explore growth opportunities. ACM will also continue to grow and improve its profitability in FY27.

Speaker #2: It provides a positive differentiation from our market competitors and a competitive advantage. Future dividends are expected with the initiation of our dividend program for the first time since 2019.

Speaker #2: For the FY27 financial year, we expect further growth, with a normalized pre-AASB 16 result to be in the range of $75 to $80 million, subject to ordinary business trading conditions.

Speaker #2: Dom and I will now address any questions that you may have. Please note that you may submit your questions through the webcast facility.

Ray Smith-Roberts: Please note that you may submit your questions through the webcast facility.

Speaker #1: Thank you. If you wish to ask a question via the phone, you'll need to press the star key, followed by the number one, on your telephone keypad.

Operator: Thank you. If you wish to ask a question via the phone, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the ask a question box and click submit. Your first question is a phone question from Jared Gelsomino with Morgans. Please go ahead.

Speaker #1: If you wish to ask a question via the webcast, please type your question into the "Ask a Question" box and click submit. Your first question is a phone question from Jared Gelsomono with Morgan.

Speaker #1: Please go ahead.

Speaker #4: Hi, guys. Congratulations on your point of growth next year—it looks quite positive. I'm probably just interested a little bit in terms of the change in stance on ACM.

Jared Gelsomino: Hi, guys. Congratulations on your point of growth next year. It looks quite positive and probably just interested a little bit in terms of the change in stance on ACM. You seem to have stabilized that business and now very much speaking to it as an integral part of the group. Could maybe just touch on that a little bit.

Speaker #4: I mean, you seem to have stabilized that business and are now very much speaking to it as an integral part of the group. Could you maybe just touch on that a little bit?

Speaker #5: Yeah, thanks, Jared. Yeah, look, there's no doubt there has been an evolution in how we're viewing that over the last 12 months. We're definitely now in a position where the business is going well, and we see plenty of opportunity going forward.

Ray Smith-Roberts: Yeah. Thanks, Jared. Yeah, look, there is no doubt there is an evolution of how we are viewing that.

Jared Gelsomino: Yeah

Ray Smith-Roberts: Done in the last 12 months, and we are definitely now in a position where the business is going well, and we see plenty of opportunity going forward. Obviously, go back 18 months when there was a lot of things happening, business was in a different position and we had a bunch of priorities and there was some concern about what we could do collectively or holistically across it. The reality is I have been able to work really well with the team. We have got some very good people and we have made a lot of changes and it is coming along well. It is now forming a very important part of what we are doing with positive contribution consistently. Certainly see a bit more of a runway for those earnings or the quality of those earnings to continue to improve as well as the continual growth.

Speaker #5: Obviously, go back eight months, when there were a lot of things happening. The business was in a different position, and we had a bunch of priorities. There was some concern about what we could do collectively or holistically across it.

Speaker #5: The reality is, I've been able to work really well with the team. We've got some very good people, and we've made a lot of changes, and it's coming along well.

Speaker #5: And it's now forming a very important part of what we're doing, with positive contribution consistently. Certainly see a bit more of a runway for those earnings, or the quality of those earnings, to continue to improve.

Speaker #5: As well as some continual growth. So, yeah, it's not really for sale anymore, and it's definitely helping amongst our overall service offering. When you're a company of our size and scale, an integrated supply company working properly is actually a strong advantage.

Ray Smith-Roberts: It is not really for sale anymore and it is definitely helping in amongst our overall service offering. When you are a company of our size and scale, an integrated supply company working properly is actually a strong advantage. It was not working properly, but it now is.

Speaker #5: It wasn't working properly, but it is now.

Speaker #4: Yeah, no, that's clear. And can we maybe just show one or two more, just on the collision business and trying to understand the composition of that second half?

Jared Gelsomino: Yeah. No, that is clear. Can maybe just ask one or two more. Just on the Collision business and trying to understand the composition of that H2. I understand it is typically a seasonally stronger Q4 and you did have good growth on the PCP, but I guess it probably does seem to be a little bit impacted by maybe some consumer pressures through that Q4. Could you maybe just speak to Collision in the Q4 and I guess, whether that pressure maybe is workloads in specific regions such as Victoria and sort of how that group has performed?

Speaker #4: I mean, understanding just typically a seasonally stronger fourth quarter, and you do have good growth on the PCP, but I guess it probably does seem to be a little bit impacted by maybe some consumer pressures to that fourth quarter.

Speaker #4: Could you maybe just speak to collision in the fourth quarter and, I guess, whether that's where most of the pressure is—maybe it lies within specific regions such as Victoria—and sort of how that group has performed?

Ray Smith-Roberts: Look, when we look at Collision holistically, we have made good progress, but there is no hiding the fact we have still got a fair bit of work to do. There has been a lot of transformational activity, and we really embarked on a bit of a change program from around December this year and getting that embedded and everything working properly, but we are still on the journey to that now. Underlying volumes in this last quarter have been harder. There is no two ways about it. We would normally see a volume improvement generally in Q4. It is a busy time. The general economic factors, cost of living, interest rates, the range of things, we did not see a significant downturn from where the volumes have been, but they certainly did not increase like we generally see them do. Again, we were hoping for more volume always makes things a bit easier.

Speaker #5: Look, when we look at Collision holistically, we've made good progress, but there's no hiding the fact we've still got a fair bit of work to do.

Speaker #5: There's been a lot of transformational activity, and we really embarked on a bit of a change program from around December this year, getting that embedded and everything working properly.

Speaker #5: We're still on the journey to the now. Underlying volumes in this last quarter have been harder; there's no two ways about it. We would normally see a volume improvement generally in Q4.

Speaker #5: It's a busy time. Now, yep, the general economic factors—cost of living, interest rates, a range of things—we didn't see a significant downturn from where the volumes have been, but they certainly didn't increase slightly as we generally see them do.

Speaker #5: So, yeah, again, we were hoping for more volume. More volume always makes things a bit easier. The volume wasn't everywhere that we would expect it to be—in some cases, it was down a bit.

Ray Smith-Roberts: The volume wasn't everywhere that we would expect it to be and in some cases down a bit. It's tracking well. We've still got a lot of work to do in getting the footprint right, the processes right, everything. We've got some parts of the network working really well. We've got some parts of the network we're still working through. I suppose that on an overall, the progress is a little bit slower than what I would've liked or what I anticipated in terms of the full year. Understanding where we are in the journey and the job, there's lots happening with people, lots of positive things where it's a combination of available work and available capability and available capacity. All of those things are being worked on together. As I say, it is going well, but it's not just the volume.

Speaker #5: So it's tracking well. We've still got a lot of work to do in getting our footprint right, the processes right—everything. We've got some parts of the network working really well.

Speaker #5: We've got some parts of the network we're still working through. So I suppose that, overall, the progress is a little bit slower than what I would have liked or what I anticipated in terms of the full year. But understanding where we are in the journey and the job, there's lots happening with people—lots of positive things—where it's a combination of available work and available capability and available capacity.

Speaker #5: So, all of those things have been worked on together. And as I say, it is going well, but it's not just the volume—more volume always helps.

Ray Smith-Roberts: More volume always helps. We can't ever get away from that. The volumes aren't disastrous. They just didn't kick up like we expect they normally do. The kick up is not significant, but it generally is higher through that last quarter.

Speaker #5: So we can't ever get away from that. The volumes aren't disastrous; they just didn't kick up like we expect they normally do. And the kick-up is not significant, but it generally is higher through that last quarter.

Speaker #4: Yeah, that makes sense. And so just last one, just on the collision network. I mean, still sort of seem to be rationalizing the sites, and they're still obviously working through that broader optimization piece, but I guess just trying to understand how much further network rationalization would be expected before it's probably considered stabilized and can maybe look to start rolling out net new sites year on year.

Jared Gelsomino: Yeah, that makes sense. Just last one, just on the Collision network, still sort of seem to be rationalizing the sites and you're still obviously working through that broader optimization piece. Just trying to understand how much further network rationalization would be expected before it's probably considered stabilized and can maybe look to start rolling out some net new sites year on year.

Speaker #5: Yeah, look, I'm not completely clear on the timing of what's left to go. I mean, we've got key plans. The reality is, the dynamic of the market continues to move a little bit.

Ray Smith-Roberts: Yeah. Look, I'm not completely clear on the timing of what's left to go, but we've got key plans. The reality is the dynamic of the market continues to move a little bit. Some of those are based around things that you don't have complete view of in terms of areas and KMAs and particular market shares. Right now, we're seeing demand in Queensland is very good. Demand in Western Australia is very good. Demand in South Australia is stable. New South Wales, we're in our Collision network, we're not significantly represented, but we do have a New South Wales and ACT. We have a number of sites. Victoria's difficult. We may still need to do a little bit more in Victoria because we have a very significant footprint in Victoria. We've got some other areas.

Speaker #5: So some of those are based around things that you don't have complete view of, in terms of areas and PMAs, in particular market shares.

Speaker #5: Right now, we're seeing demand in Queensland is very good. Demand in Western Australia is very good. Demand in South Australia is stable. New South Wales, where in our collision network we're not significantly represented, but we do have in New South Wales and ACT, we have a number of sites.

Speaker #5: Victoria is difficult, and we may still need to do a little bit more in Victoria because we have a very significant footprint in Victoria.

Speaker #5: And we've got some other areas. So, look, there's a few more planned for the moment, and that's more about, again, rationalization. And then, in other areas, we do need to expand.

Ray Smith-Roberts: So look, there's a few more plans for the moment, and that's more about, again, rationalization. Then in other areas, we do need to expand. So there's always work to do on it. I wouldn't say that it's ever going to be done, but there's less to fine-tune. So there's probably two or three more Key Market Areas and then just continual fine-tuning going forward.

Speaker #5: So there's always work to do on it. I wouldn't say that it's ever going to be done, but you're always—there's less to fine-tune.

Speaker #5: So, there's probably two or three more key areas, and then just continual fine-tuning going forward.

Speaker #4: Yeah, perfect. That's clear. Thanks, guys.

Jared Gelsomino: Yeah, perfect. That's clear. Thanks, guys.

Speaker #1: Thank you. Your next question is from Chris Savage with Bell Potter. Please go ahead.

Operator: Thank you. Your next question is from Chris Savage with Bell Potter. Please go ahead.

Speaker #2: Thank you. Hey Ray, hey Dom. Thanks for taking my questions. Just to follow up on the volumes, how are they tracking so far in Q1?

Chris Savage: Thank you. Hey, Ray. Hey, Dom. Thanks for taking my questions.

Ray Smith-Roberts: Pleasure.

Chris Savage: Just to follow on the volumes. How are they tracking so far in Q1? That is also obviously another typical strong quarter for you.

Speaker #2: That's also, obviously, another typically strong quarter for you.

Speaker #5: Yeah, they're going okay. They haven't got any worse, but they haven't gotten a lot better either. So they're remaining fairly consistent with what we saw in May and June, really.

Ray Smith-Roberts: Yeah, they are going okay. They have not got any worse, but they have not gotten a lot better either. So they are remaining fairly consistent through what we saw in May and June, really. So where they did an uptick in some times. We do not have as much uptick in this first quarter, but they are generally strong. They are holding fairly consistent. There are some green shoots. There are some areas, as I say, we have got parts of the country that there is very high demand. The delay in, we are seeing some consumers, and I would not say it is systemic and everywhere, but people are delaying minor repairs. They are delaying minor spend. So there is a skew. Our severity rate is going up, our average repair price is going up.

Speaker #5: So where they didn't uppeak—and sometimes we don't have as much uptick in this first quarter—but they're generally strong, they're consistent, and there are some green shoots.

Speaker #5: There are some areas, as I say, we've got parts of the country where there's very high demand. And, look, with the delay in — we're seeing some consumers, and I wouldn't say it's systemic and everywhere, but there are people who are delaying minor repairs.

Speaker #5: They're delaying minor spend, so there is a serious severity rate going up. Our average repair price is going up. And we certainly, in collision, are seeing a skew to more non-drivable work than in the mix of what we would normally do.

Ray Smith-Roberts: We certainly, in AMA Collision, are seeing a skew to more non-drivable work than in the mix of what we would normally do. But as I say, there are some opportunities. They are not getting any worse. They are not getting significantly better. So we are seeing fairly stable.

Speaker #5: But as I say, there are some opportunities. They're not getting any worse; they're not getting significantly better. So we're seeing things remain fairly stable.

Speaker #2: And thanks for that, Ray. So when you say the guidance is subject to ordinary business trading conditions, are you assuming an uplift in the average from what was it, four, seven, four, seven in FY26, or are you assuming fairly flat average repair volumes?

Chris Savage: Thanks for that, Ray Smith-Roberts. So when you say the guidance is subject to ordinary business trading conditions, are you assuming an uplift in the average from, what was it, 4747 in FY26, or are you assuming fairly flat average repair volumes?

Speaker #5: We're not assuming significant uplift in volume in those numbers. We're just hoping that the world settles down and it doesn't get much worse.

Ray Smith-Roberts: We're not assuming significant uplift in volume in those numbers. We're hoping that the world settles down and it doesn't get much worse.

Speaker #2: Sure, thanks. And just lastly, you've reinstated or restarted the dividends, you've got an active buyback—where's the priority between those two, and then also potentially M&A as well?

Chris Savage: Sure. Thanks. Just lastly, you've reinstated or restarted the dividends, you've got an active buyback. Where's the priority between those two, then also potentially M&A as well?

Speaker #5: Look, I think we're in a very good position with a—I mean, someone used the word to me the other day—'bulletproof'—in balance sheet.

Ray Smith-Roberts: Well, I think we're in a very good position where I mean, someone used the word to me the other day, bulletproof in balance sheet. I thought that was a little bit optimistic, but we have a very strong balance sheet. From a priority point of view, I think it's important, the board's taking a very balanced view. We believe we're undervalued, we will utilize the share buyback program if appropriate, or if the share price remains as subdued as it is. We felt it was important to reinstate the dividend plan. It's been a long time since we've been in an NPAT situation, paying dividends again, just for the first time in a long and supportive share group, to be able to give them something back was important to us and important to show the robustness in where we are.

Speaker #5: I thought that was a little bit optimistic, that we have a very strong balance sheet. From a priority point of view, I think it's important, and the board's taking a very balanced view.

Speaker #5: We believe we're undervalued, and we will utilize the share buyback program if it's appropriate. But if the share price remains as subdued as it is, we felt it was important to reinstate the dividend plan.

Speaker #5: It's been a long time since we've been in an NPAT situation, and paying dividends again for the first time. We've had a long and supportive shareholder group, and to be able to give them something back was important to us, and important to show the robustness of where we are.

Speaker #5: And look, the growth is also important as well. I still have a good opportunity, and we've got a bit of work to do in our organic growth, but that still requires some expenditure to unlock it.

Ray Smith-Roberts: Growth is also important as well. I still have a good opportunity, we've got a bit of work to do in our organic growth, but that still requires some expenditure to unlock it. As we move through that, I look further forward, we will definitely be back in a more active inorganic growth capacity, I think as we move through this year.

Speaker #5: But as we move through that, and I look further forward, we will definitely be back in a more active inorganic growth capacity, I think, as we move through this year.

Speaker #2: Good one. Thanks, Ray.

Chris Savage: Good one. Thanks, Ray.

Speaker #1: Thank you. Your next question comes from Warren Jeffries with Canaccord. Please go ahead.

Operator: Thank you. Your next question comes from Warren Jeffries with Canaccord. Please go ahead.

Speaker #3: I get it, guys. Well done. Just a quick one—just on the CapEx, Dom. So, $35 million into '27, and then does it moderate over '28 or do you sort of step straight down to that sort of $12.5 to $15 million?

Warren Jeffries: G'day, guys. Well done. Just a quick one, just on the CapEx, Dom. So AUD 35 million into 2027, then does it moderate over 2028 or do you sort of step it straight down to that sort of 12.5 to 15?

Speaker #5: I think at the moment, it does move—depends, as Ray says, it depends on how things move. But I would say it starts to moderate during FY28, before settling in FY29.

Domenic Romanelli: Well, I think at the moment it does move. Depends, as Ray says, it depends on how things move. But I would say it starts to moderate during FY28 before settling in FY29.

Speaker #3: Right. So, 12.5 to 15 to 29, sort of.

Warren Jeffries: Right. So 12 and a half to 15 to 2029 sort of expenditure.

Domenic Romanelli: It is our regular maintenance CapEx. Yep.

Speaker #5: It's a regular maintenance CapEx. Yeah.

Speaker #3: And then some.

Ray Smith-Roberts: The network is in better and better shape. Lots of things. We have still got a bit of work to do in areas, but it is not a mountain like it was.

Speaker #5: The networks are better and better shaped, guys—lots of things. We've still got a bit of work to do in areas, but it's not a mountain like it was.

Warren Jeffries: Yeah. And most of that has been directed towards Capital S.M.A.R.T.? Is that right?

Speaker #5: And most of that has been directed towards Capital Smart. Is that right? It's a bit of both, but we’ve spent a bit of money on a range of things. But that's where we're getting the most payoff.

Ray Smith-Roberts: It's a bit of both. We're spending a bit of money on a range of things, but it's where we're getting the most payoffs, so that's where we always prioritize based on outcome. We certainly regulate our CapEx based on what's going on in the world as well. We don't just roll out a locked-in plan. I'm very focused on investing it where I know it's going to give us the best benefit.

Speaker #5: So that's where we're always prioritized based on outcome. And we certainly regulate our capital expenditure based on what's going on in the world as well.

Speaker #5: So we don't just roll out a locked-in plan, but I'm very focused on investing everywhere I know is going to give us the best benefit.

Speaker #3: Good one. And that corporate overhead—it sort of bounces around quarter to quarter, but is it settling around that $10 to $11 million per annum, or is it?

Warren Jeffries: That corporate overhead, does that sort of bounce around quarter to quarter, but is it settling around that AUD 10 to AUD 11 million per annum mark? Or is it-

Domenic Romanelli: I actually guide it in the presentation. We think it'll be around the AUD 12 to AUD 13 million because the LTI expense will come up a little bit in the next financial year. About AUD 12 to AUD 13 million is what I think is an appropriate number.

Speaker #5: Actually, I actually guide it in the presentation. We think it'll be around 12 to 13 because the LTV out of the LTI expense will come up a little bit in the next financial year.

Speaker #5: So, about 12 to 13 is what I think is an appropriate number.

Speaker #3: Good one. Thanks, Dom. That's right.

Warren Jeffries: Good one. Thanks, Dom. Thanks, Ray.

Speaker #5: Pleasure.

Domenic Romanelli: Pleasure.

Speaker #1: Thank you. Once again, if you wish to ask a question via the webcast, please type your question into the AXA question box and click submit.

Operator: Thank you. Once again, if you wish to ask a question via the webcast, please type your question into the Ask a Question box and click Submit. Your next question is a webcast question from Yaran Shamgar, who asks, "Are there any debt facility restrictions that impact on quantum of buying back shares or paying out dividends?

Speaker #1: Your next question is a webcast question from Yarin Shamgar, who asks: Are there any debt facility restrictions that impact on the quantum of buying back shares or paying out dividends?

Speaker #5: Yeah, there is. There's a restriction up to NPAT. It's something that we're looking at. And when I talk to the banks—towards the start, talking to them towards the end of this calendar year—it'll be something I'll have a chat to them about.

Ray Smith-Roberts: Yaran, yeah, there is. There is a restriction up to NPAT. It is something that we are looking at, and when I talk to the banks towards the end of this calendar year, it would be something I will have a chat to them, but at the moment, there is a restriction to NPAT.

Speaker #5: But at the moment, there's a restriction to NPAT.

Speaker #1: Thank you. There are no further questions at this time. I'll now hand back to Mr. Smith Roberts for closing remarks.

Operator: Thank you. There are no further questions at this time. I will now hand back to Mr. Smith-Roberts for closing remarks.

Speaker #5: Thank you, everyone. That’s all fairly easy on us today. I appreciate you taking the time to listen. We’ll obviously have a number of one-on-one meetings and broader group meetings over the following week.

Ray Smith-Roberts: Thank you, everyone. You were all fairly easy on us today. Appreciate you taking the time to listen. We will obviously have a number of one-on-one meetings and broader group meetings over the following week. Look, the team has done a very good job. We are always working to improve more. I would like to have. We always want to achieve more, but I think we have got a very firm foundation. I am very focused and very pleased with the road ahead. I look at where we are. It has been a lot of work to get to here, but I am excited about where we are going. I think the broad value chain that we are developing in the business gives us a very key competitive advantage going forward. Our mechanical and ADAS business has moved ahead in strides. The parts business is moving ahead.

Speaker #5: But look, the team have done a very good job. We're always working to improve more. I would always like to achieve more, but I think we've got a very firm foundation.

Speaker #5: I'm very focused and very pleased with the road ahead. I look at where we are—it's been a lot of work to get to here, but I'm excited about where we're going.

Speaker #5: I think the broad value chain that we're developing in the business gives us a very key competitive advantage going forward. Our mechanical and ADAS business has moved ahead in strides.

Speaker #5: Our parts business is moving ahead. That, combined with our core repair capability, is giving us a very significant opportunity to talk to our key customers about the diversity of services and products and ways to solve their problems that we've never been able to do properly before.

Ray Smith-Roberts: That combined with our core repair capability is giving us a very significant opportunity to talk to our key customers about diversity of services and products and ways to solve their problems that we've never been able to do properly before. Yet living this together with the right volume and really value, should I say, and really being able to look across the group and how do we solve solutions and provide opportunities that we haven't been able to do before, puts me in a very positive mindset about what the future's looking like. So appreciate your time, appreciate your support. Look forward to talking with many of you further. Thanks to all of our people that have made this possible.

Speaker #5: And living this together, we do a right volume and really value, should I say, and really being able to look across the group and how do we solve solutions and provide opportunities that we haven't been able to do before puts me in a very positive mindset about what the future is looking like.

Speaker #5: I so appreciate your time and your support. I look forward to talking to many of you further, and thanks to all of our people who have made this possible.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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