About: AMA is the largest accident repair group in Australia. The business has expanded through both acquisitions and new sites. The opportunity to consolidate panel repair operators in Australia remains significant given AMA has only a 5% market share in a highly fragmented industry.

Why it is in the portfolio: Usually an acquisition business models in a highly fragmented industry (usually fragmented for a reason i.e. low barriers to entry) wouldn’t pass our criteria but in this case the consolidation opportunity is for good reason, being driven by demand from large insurance companies wanting to deal with just a handful of vehicle panel repairers. AMA management is highly experienced and aligned to shareholders with significant equity interests. The business is now well placed under a solid management team to double revenue over the next few years through both acquisition and greenfield expansion.

Fundamentals: AMA currently has a market capitalisation of $630m, trading on a PER 18x FY19 which we think is good value based on our expectation of 20% EPS growth in FY20.

What could go wrong: Coming soon!