Suncorp inks new prices, funding for wobbling smash giant AMA
Suncorp will provide financial support to smash repair giant AMA in a deal the struggling chain has signed with its key insurance customer.
Melbourne-based AMA, whose auditors have flagged uncertainty about it being able to continue as a going concern, on Friday also said it had negotiated new prices for repairing cars of customers of Brisbane-based Suncorp, one of Australia’s major insurers.
The smash repair industry has been hit by logistical slowdowns and inflation. Craig Abraham
Smash industry chatter in recent weeks suggested the new price for repairing lighter damaged cars could rise from about $2200 to $2475, although neither company was confirming pricing terms on Friday.
But AMA on Friday downgraded its own earnings guidance for the current financial year, partly due to the new pricing being more “modest … compared to original forecast”. AMA shares were down 1¢ to 12¢ on Friday, having been trading around the $1.30 mark in August in pre-pandemic 2019.
The deal also offers some relief for Suncorp. Insurance sources had painted its relationship with AMA, which runs almost 130 sites, as symbiotic: Suncorp could not afford to let the smash repairer crumble because it fixes such a large swathe of customer cars.
AMA had faced a pinch since 2020partly as costs of repairs and fixing times blew out across industry, yet it was stuck in fixed-price contracts.
Its key customer was Suncorp after AMA bought the insurer’s lower-level damage business Capital Smart in 2019 for $420 million. A three-year contract expired and talks dragged on until Friday’s announcement, which AMA said included annual repricing possibilities incorporating industry inflation pressures.
If any “significant external events” struck pushing inflation
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