AMA Group Plans 1-for-10 Share Consolidation to Cut Volatility

Background and Rationale

AMA Group Limited (ASX, AMA), a key player in the automotive services sector, has announced plans to consolidate its issued capital on a 1-for-10 basis. This move, subject to shareholder approval at the upcoming Annual General Meeting on 3 November 2025, is designed to address the company’s relatively large number of shares and performance rights compared to its industry peers.

The company currently has approximately 4.8 billion shares and 41 million performance rights on issue. The board believes this high volume complicates the capital structure and may deter some investors due to the low per-share price and potential volatility.

Intended Benefits of the Consolidation

By consolidating shares and performance rights on a 1-for-10 basis, AMA Group aims to simplify its capital structure, making it more straightforward and attractive to a broader range of investors. The consolidation is expected to increase the share price proportionally, which can help reduce short-term speculative trading and price fluctuations that often accompany low-priced stocks.

Additionally, the consolidation is intended to bring AMA’s capital structure more in line with its peer group, potentially improving market perception and investor confidence. The board has also confirmed that any fractional shares or performance rights resulting from the consolidation will be rounded up, ensuring shareholders do not lose value due to the process.

Implementation Timeline and Next Steps

The consolidation process follows a detailed timetable starting with the announcement on 1 October 2025, followed by the dispatch of the Notice of Annual General Meeting. Shareholder approval is expected on 3 November 2025, with the consolidation effective from 5 November 2025. Trading in the post-consolidation securities will commence shortly thereafter, initially on a deferred settlement basis before normal trading resumes.

Investors should note that the timetable is subject to change at the discretion of the AMA Group board or as required by the ASX. The company encourages shareholders to review the Notice of Annual General Meeting for further details and to participate in the vote.

Market Implications and Outlook

While share consolidations do not inherently change a company’s market capitalization, they can influence investor sentiment and trading dynamics. For AMA Group, the consolidation could reduce volatility and attract institutional investors who often prefer stocks with higher nominal prices and cleaner capital structures.

However, the market’s reaction will depend on broader company performance and sector conditions. The consolidation is a structural adjustment rather than a fundamental change, so investors will be watching closely for subsequent operational updates and financial results.