In a world with market chatter often centring around the most exciting theme of the day, three of the Forager Australian Shares Fund’s better contributors over the past year operate in industries that rarely make headlines. They fix cars, sell motorbikes and dig rocks. But each of them delivered meaningful changes and have won back investor appreciation.
AMA Group: Finally Fixed
Few companies on the ASX have a history of disappointing investors as consistently as AMA Group (AMA). The panel repair business was weighed down by high debt, constant management turnover and multiple inadequate capital raisings. We had followed the story for years and even got burned previously. But in July 2024, the turnaround began.
AMA finally raised the capital it needed. This was a significant amount, which came with some dilution of existing holders, but cleared the balance sheet of its problems and gave the business runway to operate. With liquidity restored, the focus turned to fixing operations.
AMA Group finally raises the capital it needs
Source: Bloomberg
Capital SMART, the company’s fast-turnaround repair division, began to show signs of life. Margins in the broader collision repair business also started to improve. A new CEO took the helm and a credible turnaround plan was implemented. At the 2025 financial year results management’s preferred measure of profitability had risen 38%.
We participated in the capital raise at 4.2 cents. The share price responded quickly, ending last financial year up 150 percent from the raise price. We are only part way through the company’s turnaround, but the structure is now in place for sustained recovery. Sometimes the hardest part is survival. AMA has cleared that hurdle and we believe it is looking towards a brighter future.
MotorCycle Holdings: A Rare Opportunity at the Bottom
Motorcycle Holdings (MTO) has not always been well-loved by the market. Only 15 months ago the retailer and wholesaler of motorcycles and accessories was caught up in a fund liquidation, driving the share price to under $1 per share. Liquidity was low and sentiment was poor. We believed the market had overreacted and added significantly to our position.
This wasn’t a classic turnaround story in the operational sense. While the motorcycle dealership business was under pressure, the wholesale distribution of CF Moto motorcycles was going well. Net profit rose 28% in the 2025 financial year.
Then came the moment of transformation. On the second-last day of the financial year, the company announced the acquisition of several dealerships from its closest competitor. The purchase was highly strategic. It took Motorcycle Holdings to an estimated 20 percent market share in new Australian motorcycle sales. The economics of the deal look attractive, especially after factoring in the supply of the company's wholesale accessories through the new dealerships.
By the end of August the stock had more than tripled from its lows and finished above $3.50 per share. Profitability in the core dealership should improve from low levels, the CF Moto segment should continue to grow and the new acquisitions should add meaningfully to profits. Despite the business still having a market capitalisation below $300m, investors are now more aware of its potential. We have actively managed the weighting of this investment in the portfolio and currently retain a small investment as higher prices have reduced our perceived future returns.
Perenti: Boring Is Beautiful
Mining services is not an industry that gets many overly excited. Investors had long been skeptical of the ability of mining services businesses to generate sustainable free cash flow. The sector was known more for losing money on poorly priced contracts and chewing through capital for new equipment.
So it was exciting to see Perenti (PRN) delivering on exactly what it promised.
The company has spent the past few years improving its margins, reshaping its stable of contracts, and staying disciplined on capital spending. In the 2025 financial year, Perenti guided to more than $150 million of free cash flow. The business eventually achieved $195m.
The market finally noticed. Steady operational delivery and consistent performance resulted in quickly improved valuations. The share price has risen more than 140% over the last year, and the Fund exited its investment part way through the year. The Fund remains invested in fellow mining services stock Macmahon (MAH), which has also seen its share price rally through the year.
Why These Turnarounds Worked
While these companies operate in disparate industries they share a few key factors.
Firstly, the businesses started off deeply out of favour. Valuations had fallen to extreme levels, below six times forward earnings for each in the middle of 2024.
The businesses also achieved the milestones investors wanted to see. For AMA, it was a well executed large capital raise. For Motorcycle Holdings, it was earnings stability and debt reduction. And for Perenti, the reliable delivery of cash flows.
Thirdly, management teams executed. They didn’t just talk about change. As execution improved, so did investor willingness to back the management teams to continue delivering good results in the future.
There will always be businesses that get left behind by the index giants and forgotten by institutional investors. These unloved and underappreciated businesses can deliver some fantastic returns. And that is anything but boring.
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