Crash repairer AMA Group, which today posted a net loss and outlined details of a capital raising, says pricing must remain a focus given impacts from inflation and increasing repairs severity.

CEO Carl Bizon, who will be stepping down in November, says “on-going price management” is required to ensure payment for work completed keeps pace with inflation.

“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,” he says in the annual report.

AMA Group reported a net loss of $144.4 million for the year to June 30, little changed from a year earlier, including goodwill impairments for the Capital Smart and AMA Collision businesses.

Normalised earnings before interest, tax depreciation and amortisation (EBITDA), rose to $64.6 million from $21.6 million.

The company said it has experienced strong demand, but increased repair complexity has led to longer repair timeframes, labour shortages have also affected throughput and it had experienced “ongoing margin compression, adverse to expectations”.

The company has launched a fully underwritten $55 million equity raising, including a $17.6 million placement and $36.4 million entitlement offer at a price of 7.5 cents, representing a 37.5% discount to the closing price of 12 cents on Wednesday last week.

Funds raised will be used to repay $35 million of bank debt and provide liquidity and working capital.

AMA announced last week that Chairman Anthony Day had retired effective Friday after nearly five years on the board, while Mr Bizon would be leaving his position at the annual general meeting on November 23.

Mr Bizon said today that the past 12 months had been a year of transition, trading results for May to August provided confidence on financial guidance, and actions taken such as on pricing, operational changes to improve the network and moves to alleviate labour shortages, had begun to flow through. AMA has forecast normalised EBITDA of $86-96 million for this year.

“We are certainly seeing a nice strong start to the year as all of those initiatives that were worked through in FY23, and some were more difficult than others, have really started to deliver results,” he told a briefing.

The annual report says directors are of the opinion that as at the date of approving the report, the cash flow forecasts and deleveraging activities outlined support the group’s ability to continue as a going concern including ongoing covenant compliance.