Why is the AMA Group (ASX:AMA) share price halted?

The company’s shares have taken a beating lately…

| More on:
woman sitting at desk holding hand up in stop motion

Image source: Getty Images

The AMA Group Ltd (ASX: AMA) share price has been going nowhere since yesterday morning.

A trading halt came into effect pending a release from the smash repair company before market open on Monday.

The last closing price of AMA Group’s shares was 42 cents apiece.

Let’s take a closer look at what the company is planning to announce to the ASX.

Why is AMA Group share price in a trading halt?

AMA Group provided little detail in regards to the reason why it requested the ASX to freeze its shares.

According to the notice, AMA Group advised two consecutive trading halts are in place in respect to its securities.

In particular, the company is carrying out a capital structure review to manage short-term disruptions caused by COVID-19.

As such, plans are underway to initiate a capital raise to shore up AMA Group’s balance sheet.

This comes after the company released its full-year results late last month, acknowledging COVID-19 related repair volume decreases. The average decline in vehicle collision repair volume fell 17% compared to prior period.

At the end of the 2021 financial year (30 June), AMA Group had $64.2 million in cash and $237.5 million of debt.

The news comes after last week’s response to media speculation regarding its capital position is in tatters. AMA Group was quick to refute the reports highlighting that an equity raise is to fuel further growth.

It is expected that its shares will resume normal trading on or before Friday 10 September following a release.

More on AMA Group shares

It’s been a whirlwind 12 months for AMA Group shares, treading downwards to reach a 52-week low of 42 cents. The company’s share price has lost around 30% in value since this time last year. However, when looking at 2021 alone, its shares have fallen almost 50%.

On valuation grounds, AMA Group presides a market capitalisation of roughly $313.5 million, with approximately 746 million shares on issue.

Should you invest $1,000 in AMA Group right now?

Before you consider AMA Group, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and AMA Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Arrows pointing upwards with a man pointing his finger at one.
Share Market News

Here are the 3 most traded ASX 200 shares on Monday

We take a look at the most traded ASX 200 shares by volume today.

Read more »

A man with a scrappy beard and wearing dark sunglasses and a beanie head covering raises a fist in happy celebration as he sits at is computer in a home environment.
Share Market News

Archer Materials share price leaps 7% on patent news

It's good news today for the ASX materials tech company.

Read more »

A young man has a look of alarm on his face as he turns to see the close up face of a brown grizzly bear that is draped over him as part of a large life-size bear skin rug he is wearing over his shoulders.

Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’?

The crypto selloff should offer more clarity on which projects are 'long-term sustainable'.

Read more »

A group of market analysts sit and stand around their computers in an open-plan office environment. The central figures are deep in thought about Megaport's recent earnings release
Share Market News

ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints

The ASX 200 index has started the week on a mildly positive note...

Read more »

stylised silhouette of a bear on financial graph background
Share Market News

These are the 10 most shorted ASX shares

Short sellers are currently targeting these ASX shares...

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Monday

Here's what to expect on the ASX 200 on Monday...

Read more »

A group of people in suits watch as a man puts his hand up to take the opportunity.
Blue Chip Shares

2 ASX blue-chip shares this top fund manager thinks are good value

Wilson Asset Management offers its thoughts on a couple of blue-chip shares.

Read more »

Illustration of men and women pushing share price graph up
Share Market News

Why are ASX 200 shares rebounding on Friday?

China's COVID-zero policies have slowed its economic growth and impacted its trading partners.

Read more »