"My feeling is there will come a point soon where sizeable...

"My feeling is there will come a point soon where sizeable acquisitions are no longer available (there are only two other major players in the industry from my readings) and AMA will need to turn more to establishing greenfield centres, in large population areas, in order to grow (mainly through putting other, smaller and 'cottage' type industry players in the vicinity of these new centre, out of business)."

Make no mistake, dropping down greenfield sites in order to fight a war of attrition against incumbents is too ghastly an course of action to even contemplate.

But I'm a bit surprised that you feel that sizeable acquisition opportunities are no longer available.

The figures I've seen shows an industry that is still highly fragmented, suggesting ample runway is still available to any would-be industry consolidators, especially those with capital market access and backing.


"If extracting opex savings and growing GM% is a focus to growing EBITDA it would be good if AMA actually provided some quantifiable information in their results presentation about how they are achieving similar savings rather than making throw-away statements about organic growth etc. (some of this information is available in the notes to the FY16 accounts). I suspect they might not be doing it at present because it might make acquisition negotiations more difficult if the acquiree can get a better grip on the synergies AMA can extract from acquisitions."

I think you are right. If I was shareholder in this business (I'm thinking about becoming one, hence my interest) then the last thing I'd want is for the managers of my company to be standing on the rooftops shouting out how they make out like absolute bandits every time they do deals with unwitting vendors.


Incidentally, when you talk of one of the leading industry operators (Capital S.M.A.R.T) acting to drive down costs across the industry, then that ironically plays straight into the hands of AMA, to the extent that such industry margin pressure has a moderating influence on vendor expectations. It's classic economic game theory in practice: industry leaders driving down pricing to induce pain on minor sector participants in order to gain market share, either through the exit of by those minor participants, or by them willfully selling out to the industry gorillas. ASIC doesn't like it, but its done under the mantra of increasing industry efficiency and productivity.