TRA - Turners Automotive Group [previously TNR - Turners Limited]

[Beagle]

I think they might actually be okay at the current level ~ $2.53, trading cum a 4 cent fully imputed dividend and more importantly a $10m + buy-back.
Might be worth a small additional punt at this level... Yield at $2.53 assuming 17 cents fully imputed is sustainable going forward (maybe they institute a dividend reinvestment scheme to support that) = 17 /0.72 = 23.61 cps gross so at $2.53 that's a 9.33% gross yield.

[couta1]

I think they might actually be okay at the current level ~ $2.53, trading cum a 4 cent fully imputed dividend and more importantly a $10m + buy-back.
Might be worth a small additional punt at this level... Yield at $2.53 assuming 17 cents fully imputed is sustainable going forward (maybe they institute a dividend reinvestment scheme to support that) = 17 /0.72 = 23.61 cps gross so at $2.53 that's a 9.33% gross yield. Your talking yourself into a serious top up there Beagle.

[percy]

I think they might actually be okay at the current level ~ $2.53, trading cum a 4 cent fully imputed dividend and more importantly a $10m + buy-back.
Might be worth a small additional punt at this level... Yield at $2.53 assuming 17 cents fully imputed is sustainable going forward (maybe they institute a dividend reinvestment scheme to support that) = 17 /0.72 = 23.61 cps gross so at $2.53 that's a 9.33% gross yield.

Sustainable dividend .Fully imputed,paid quarterly.Next one due at the end of January.

[Beagle]

Your talking yourself into a serious top up there Beagle.

"Bet the ranch" what could possibly go wrong lol

[percy]

Your talking yourself into a serious top up there Beagle.

Love, hate, love, hate,all part of being a Beagle I guess.?
I think it is to do with the phases of the moon........................lol.

[Beagle]

Love, hate, love, hate,all part of being a Beagle I guess.?
I think it is to do with the phases of the moon........................lol.

Not at all Percy...its about being a little proactive with one's holding, you know...like professional investors and institutions do. Might buy-back some of the ones I sold a while back at $3.16. No love or hate, its just business.

[couta1]

Not at all Percy...its about being a little proactive with one's holding, you know like professional investors and institutions do. Might buy-back some of the ones I sold a while back at $3.16. No love or hate, its just business. Start by buying the 11688 on offer at $2.52, that person should be relieved of those share ASAP, they don't deserve to hold them.Lol

[percy]

Not at all Percy...its about being a little proactive with one's holding, you know...like professional investors and institutions do. Might buy-back some of the ones I sold a while back at $3.16. No love or hate, its just business.

I guess it shows the difference approach a trader takes, from a long term investor.?

[Beagle]

Established case law suggests that one is entitled to take reasonable steps from time to time to preserve one's capital as part of a normal investment program (Estate of King v Commissioner of Inland Revenue 2008 Court of Appeal). Not much recent case law on the subject so no further comment from me, (and this post should not be relied upon by anyone as professional tax advice) other than to point out the obvious that there's no profit in this one for anyone in recent years other than the dividend yield.

[Snoopy]

I think shareholders should pay little attention to the half year numbers. Much more important will be how the big picture is developing.

Is 'Autosure' getting traction?


Profits at 'Autosure' up, a big tick!

"Insurance (Autosure): Revenue $25.7m up 15%, Op profit $6.4m up 144%"



Are bad debts really reducing as management hoped?


"The primary impact on results was the impairment levels for MTF non-recourse loans which have been higher than anticipated. Stricter lending criteria have been introduced and MTF lending processes and credit scoring systems have also been reviewed to ensure robustness, with changes made progressively over the past six months. While the performance of the non-recourse loan offer has been disappointing, MTF’s network of over 300 dealers and franchisees remains an attractive channel for Oxford Finance. "

I really thought the $6.380m provision over FY2018 would have sorted this out. However, it appears the changes have had to be phased in over this HY reporting period. So I remain optimistic that the HY2019 period will see the back of this issue.



Is market share holding up?


"The challenging conditions will inevitably lead to consolidation in the dealer market which will provide Turners with further opportunity in the medium term, as both Turners and Buy Right Cars focus on building market share."

Sounds like it is.



How is the 'securitization of loans' going?


"The securitisation warehouse has recently been extended to $200m, and the new banking syndication with ASB and BNZ is working effectively."



These are the kind of things I will be looking to find out!


The headline remarks don't look good with that 'Motor Industry downturn' coming over FY2019.

"a potential downside impact of 5 - 10% to forecasted FY19 pre-tax profits if current market conditions persist."

But the motor trade has always been up and down. For those that have a longer time horizon than the current year, I think TRA are on track.

SNOOPY

discl: holder, with shares currently down 10% on my purchase cost.

[McGinty]

I'm not buying nor selling TRA either but I don't agree with KW about not buying in a downtrend if that downtrend is not driven by a serious deterioration in company fundamentals but rather a Schizophrenic market.

A downtrend is a downtrend, those that haven't heeded the markets warning (myself included) are paying for it with a paper loss beside their TRA holding.

KW's rule is golden if you want to protect profits and prevent yourself looking for 'bargain' stocks at the dog pound.

Red flags flying on this pup after those results, I now understand the reason for the sharp sell down last week (must be a leak or two in the Turners auction rooms)

[percy]

A downtrend is a downtrend, those that haven't heeded the markets warning (myself included) are paying for it with a paper loss beside their TRA holding.

KW's rule is golden if you want to protect profits and prevent yourself looking for 'bargain' stocks at the dog pound.

Red flags flying on this pup after those results, I now understand the reason for the sharp sell down last week (must be a leak or two in the Turners auction rooms)

I noticed a couple of ChCh car dealers at the ChCh Turners presentation.One I know has a substantial holding in Turners.
I would therefore take it was common "in the trade" that sales were slow.
I did hear from a friend of a commercial van yard where sales have been extremely slow.

[Beagle]

A downtrend is a downtrend, those that haven't heeded the markets warning (myself included) are paying for it with a paper loss beside their TRA holding.

KW's rule is golden if you want to protect profits and prevent yourself looking for 'bargain' stocks at the dog pound.

Red flags flying on this pup after those results, I now understand the reason for the sharp sell down last week (must be a leak or two in the Turners auction rooms)

Interesting correlation between this and AHG's operations. Not for a second discounting your theory of insiders trading but perhaps savvy investors read this press release from AHG a few days ago ? Extract "The entire private buyer market has been weaker" https://www.asx.com.au/asxpdf/20181123/pdf/440kq9gklwrlr0.pdf

[trader_jackson]

Given apparently it was a terrible result, there wasn't exactly a panic rush for the exits (ie volume)

[couta1]

A downtrend is a downtrend, those that haven't heeded the markets warning (myself included) are paying for it with a paper loss beside their TRA holding.

KW's rule is golden if you want to protect profits and prevent yourself looking for 'bargain' stocks at the dog pound.

Red flags flying on this pup after those results, I now understand the reason for the sharp sell down last week (must be a leak or two in the Turners auction rooms) Each to their own but I question the market nous of those selling a few days before the start of a share buyback.

[alex f]

Share buybacks 4.5 million are to be bought back (is there a time frame?)
I’ve only followed a few buy backs, but not on such a thinly traded stock.
Surely this will boost the price?
Assuming they bought about 50000 a day (unlikely), it would still take 18 weeks at that rate)

[percy]

Share buybacks 4.5 million are to be bought back (is there a time frame?)
I’ve only followed a few buy backs, but not on such a thinly traded stock.
Surely this will boost the price?
Assuming they bought about 50000 a day (unlikely), it would still take 18 weeks at that rate)

I suppose some buy backs work,but really Turners need "runs on the board" ie real proof their strategy is leading to increasing nett profits.

I believe it will,but the market does not.

[winner69]

Share buybacks 4.5 million are to be bought back (is there a time frame?)
I’ve only followed a few buy backs, but not on such a thinly traded stock.
Surely this will boost the price?
Assuming they bought about 50000 a day (unlikely), it would still take 18 weeks at that rate)

They can start Friday and said can buy through to March 31st. All trades through NZX market platform with no off market trades. FNZC doing the buying.

No purchases on the ASX .....that’s the funny bit

[couta1]

They can start Friday and said can buy through to March 31st. All trades through NZX market platform with no off market trades. FNZC doing the buying.

No purchases on the ASX .....that’s the funny bit No off market trades I like that bit, only sellers will be your standard reef fish in the main.

[RupertBear]

Don't know about brave.
Looking rather foolish at present.
Neither buying or selling.

Foolish is not a word I would ever ascribe to you Percy. I peg you as a very astute investor who does very thorough research and has learned to trust the companys who do what they say they will do. This time round you have been let down by them. This is no reflection on you at all Percy. I for one hold your opinion in great regard :)

[percy]

Foolish is not a word I would ever ascribe to you Percy. I peg you as a very astute investor who does very thorough research and has learned to trust the companys who do what they say they will do. This time round you have been let down by them. This is no reflection on you at all Percy. I for one hold your opinion in great regard :)

Thanks RupertBear.
A new definition for you.
"What is a long term share holding"?
"A short term one that did not work out right"!!!
Looks as though I will remain a long term shareholder.....lol.

[McGinty]

Share buybacks 4.5 million are to be bought back (is there a time frame?)
I’ve only followed a few buy backs, but not on such a thinly traded stock.
Surely this will boost the price?
Assuming they bought about 50000 a day (unlikely), it would still take 18 weeks at that rate)

I would be very surprised if they buy back that many shares. Quite often companies quote a higher number of shares to be acquired to give them 'head room' if required. FNZC will have certain instructions on how many to purchase and at what price (% above/below vwap or previous close) each day, to keep an 'orderly market'.

Liquidity isn't the best in TRA and following the buy back it will surely get worse.

[Beagle]

I reckon the buy back will be good for the SP so I bought a few today. Good dividend feeding at this level. On a light hearted note anyone ever wondering why I chose Beagle as my user name might like to see how cunning and determined they are to get a feed. You might be surprised at their cunning. https://www.youtube.com/watch?v=KyQiPWufjwU

Besides that, Snoopy the other Beagle is into this and some of my other mates are too so what could possibly go wrong lol

[ratkin]

I prefer to see share buy backs done from a position of strength, not as a tool used by a company to prop up its share price.
Will be interesting to see what the market makes of it. Does not change the fact there is no growth or that there are difficult trading conditions with tight margins.

[couta1]

I prefer to see share buy backs done from a position of strength, not as a tool used by a company to prop up its share price.
Will be interesting to see what the market makes of it. Does not change the fact there is no growth or that there are difficult trading conditions with tight margins. Buying back shares because the company believes the current SP is below Intrinsic value is a good reason, besides it will get rid of a lot of reef fish and build a more solid shareholder base. PS- I hate those fishing days when your baits are being constantly stripped by small reefies.

[RTM]

Buying back shares because the company believes the current SP is below Intrinsic value is a good reason, besides it will get rid of a lot of reef fish and build a more solid shareholder base. PS- I hate those fishing days when your baits are being constantly stripped by small reefies.

Yes, agree. Quite a different thing when a company like Apple with its HUGE cash reserves buys back its stock.

[Jay]

New car sales still right up there, so is there a bit of a glut of used cars due to this (trade ins etc.) and/or are more people buying new rather than used.
There are plenty of small new cars around now ( with more safety gear/tech etc.) priced not much more than a good slightly bigger used car. May be the "second" car is smaller and new rather than 2nd hand
Plus seems to be a Used car yard popping up nearly every where there's a spare bit of dirt these days.

As an aside AutoSelect in Panmure Auckland has expanded to take over some of the old Moyes Holden yard.

Disc: Do not hold currently

[oldtech]

I reckon the buy back will be good for the SP so I bought a few today. Good dividend feeding at this level.

I'd been tempted for that very reason but then I checked this morning and saw that my bid for OCA at $1.14 finally went through last night so that's my pocket money all spent. :)

[janner]

I prefer to see share buy backs done from a position of strength, not as a tool used by a company to prop up its share price.
Will be interesting to see what the market makes of it. Does not change the fact there is no growth or that there are difficult trading conditions with tight margins.

In agreement. I see this as financial fiddling.

[Beagle]

I'd been tempted for that very reason but then I checked this morning and saw that my bid for OCA at $1.14 finally went through last night so that's my pocket money all spent. :)

Long term I can't see you going wrong at that price.
TRA - I think people are pricing it as a no growth company as though the current difficult trading conditions will exist permanently. I think that's as fundamentally erroneous as saying the Labour party who have seriously undermined business confidence will be in power permanently. I have some reservations about Grant Baker but I think Todd Hunter is doing a good job. PE is less than 9 and gross yield more than 9% with a $10m+ buyback coming. Hmmmm

[percy]

Long term I can't see you going wrong at that price.
TRA - I think people are pricing it as a no growth company as though the current difficult trading conditions will exist permanently. I think that's as fundamentally erroneous as saying the Labour party who have seriously undermined business confidence will be in power permanently. I have some reservations about Grant Baker but I think Todd Hunter is doing a good job. PE is less than 9 and gross yield more than 9% with a $10m+ buyback coming. Hmmmm

Beagle in love again.?
No surprises.!!.
Yes vertically intergrated business model is sound,and scalable.
OK slow market in Auckland in October,but I believe November has picked up,and the rest of NZ is not looking too bad.
BuyRight cars in Hamilton trading above expectations ,and further growth available in the rest of NZ.

[winner69]

In agreement. I see this as financial fiddling.

C’mon janner ...be more sophisticated than using terms like “fiddling”...that sounds like being dishonest .....in the trade it’s “financial engineering”

[janner]

C’mon janner ...be more sophisticated than using terms like “fiddling”...that sounds like being dishonest .....in the trade it’s “financial engineering”


I say it as I see it..

[winner69]

I say it as I see it..

......and I agree with you but some (not those entranced by management of course) might have used the word dodgy

[janner]

......and I agree with you but some (not those entranced by management of course) might have used the word dodgy

I could not possibly comment on that..

Dodgy

adjective INFORMAL•BRITISH

dishonest or unreliable.
"a dodgy second-hand car salesman"

potentially dangerous.
"activities like these could be dodgy for your heart"

of low quality.
"Spurs' dodgy defence had thrown away a 2-0 lead"

synonyms: second-rate, third-rate, substandard, low-grade, low-quality, cheap;

[Beagle]

Beagle in love again.?
No surprises.!!.
Yes vertically intergrated business model is sound,and scalable.
OK slow market in Auckland in October,but I believe November has picked up,and the rest of NZ is not looking too bad.
BuyRight cars in Hamilton trading above expectations ,and further growth available in the rest of NZ.

Love doesn't come into it. Just a cold calculated business decision that on the balance of probabilities its probably (despite the SP being a train wreck for the last year, thank goodness I took steps to mitigate my losses and only held a few) reasonably good investing for yield at this level, possibly limited downside from here, hopefully
Not a high conviction or high level holding for me.

[minimoke]

Love doesn't come into it. Just a cold calculated business decision that on the balance of probabilities its probably (despite the SP being a train wreck for the last year, thank goodness I took steps to mitigate my losses and only held a few) reasonably good investing for yield at this level, possibly limited downside from here, hopefully
Not a high conviction or high level holding for me.I remain unconvinced on the dividend yield argument - it is not keeping up with capital losses through reducing Share Price.

Not am I convinced by the share buy back - it is likely to create false liquidity in the market. All good for a trader who will take a punt on buying low and selling higher. But not as a long term investment. Share buy back ends - liquidity dries up and SP fall back.

I'm still not sure where the money is coming from for the share buy back.

[winner69]

I remain unconvinced on the dividend yield argument - it is not keeping up with capital losses through reducing Share Price.

Not am I convinced by the share buy back - it is likely to create false liquidity in the market. All good for a trader who will take a punt on buying low and selling higher. But not as a long term investment. Share buy back ends - liquidity dries up and SP fall back.

I'm still not sure where the money is coming from for the share buy back.

Buy low the chance of good returns is better ...buy high the chance of good returns is diminished. Beagle thinks now is a low

Buyback money coming from petty cash

[Beagle]

I remain unconvinced on the dividend yield argument - it is not keeping up with capital losses through reducing Share Price.

Not am I convinced by the share buy back - it is likely to create false liquidity in the market. All good for a trader who will take a punt on buying low and selling higher. But not as a long term investment. Share buy back ends - liquidity dries up and SP fall back.

I'm still not sure where the money is coming from for the share buy back.

I hear you mate and agree the SP performance has been absolutely appalling. Stepping back from that and taking a medium - long term view at $2.51 and assuming normal market conditions return in the medium term, 17 cps fully imputed gives 23.61 cps gross and on $2.51 that's 9.4% gross and its paid quarterly. Funding, they have increased their syndicated banking facility significantly this month.

I see this one in a similar light to the long term position I took in ZEL recently. Both suffered a tough first half and both got beaten up very badly by the market which appears to assume that a bunch of one off factors and / or tougher market conditions are going to be permanent.

I am shifting my portfolio to have a strong dividend bias for calendar year 2019 onward. Any stock that doesn't pay a forecast yield of at the very least 5% (and I would need to see genuine prospects of strong growth in future dividends at that level) is under review with a bias towards sale.

[bull....]

and everyones hoping that 10 - 20% decline in business doesnt mean reduced dividends and buybacks reduced to conserve cash

[couta1]

and everyones hoping that 10 - 20% decline in business doesnt mean reduced dividends and buybacks reduced to conserve cash And of course you can predict with all certainty that there will be a 10-20% decline in business, bull****.

[Beagle]

And of course you can predict with all certainty that there will be a 10-20% decline in business, bull****.

:lol: :lol: I was going to reply but you covered it !

[bull....]

dont forget there debt levels are bad they will probably need another cash issue soon

[bull....]

And of course you can predict with all certainty that there will be a 10-20% decline in business, bull****.

of course , it is well known nz is slowing down economically , gdp growth is being held up by govt spending why consumer spending is slowing down

[winner69]

dont forget there debt levels are bad they will probably need another cash issue soon


Strong balance sheet they say bull....

[couta1]

of course , it is well known nz is slowing down economically , gdp growth is being held up by govt spending why consumer spending is slowing down Lol, your like a dark cloud hanging over every thread on the forum.

[BlackPeter]

of course , it is well known nz is slowing down economically , gdp growth is being held up by govt spending why consumer spending is slowing down

Great stuff!

If the economy slows down and people have less money than more people need to revert to buying second hand cars if their old vehicle reaches the end of its useful life. Time to buy more TRA?

Bull, you used to be more bearish - and now this strong supporting argument for TRA. What happend?

[bull....]

Lol, your like a dark cloud hanging over every thread on the forum.

yes comes across that way lol but the market is tracking down and some of these companies are performing bad. i have been bullish on spark as you know and it is performing unlike some of the stocks i have run my bear ruler over so im not completely bearish on everything although if the market overall turns into a bear there is no escaping even for my lovely spark

[bull....]

Strong balance sheet they say bull....

as almost all companies say a even enron lol

[bull....]

Great stuff!

If the economy slows down and people have less money than more people need to revert to buying second hand cars if their old vehicle reaches the end of its useful life. Time to buy more TRA?

Bull, you used to be more bearish - and now this strong supporting argument for TRA. What happend?

i believe the stats say otherwise , and remember most cars last longer these days even second hand ones.

[couta1]

Hmm looking at that sell side it could still be one seller, just one on every sell number except $2.82, strange numbers on some as well.

[Beagle]

and everyones hoping that 10 - 20% decline in business doesnt mean reduced dividends and buybacks reduced to conserve cash


What part of very high fuel costs in October that have now come back down is so hard for you to wrap your head around ? Did you actually notice that the company said that IF October conditions persist through the second half. Did you miss the word IF ?

Let me re-post it for you to help in your comprehension “If October market conditions continue to be the environment we are working in, NPBT could be impacted by 5 – 10% from our previous guidance range of $34m to $36m.”

IF is not a GIVEN is it !

[James108]

Great stuff!

If the economy slows down and people have less money than more people need to revert to buying second hand cars if their old vehicle reaches the end of its useful life. Time to buy more TRA?

Bull, you used to be more bearish - and now this strong supporting argument for TRA. What happend?

I don't think this is the case. If you go to stats NZ you can see second hand vehicle registrations over the last 10 years. Second hand sales are historically very high at the moment.

[James108]

I like the TRA business model but my thinking has changed, I now believe it is top of the cycle for them. Therefore it seems to expensive at the moment. Good chance they will grow cross cycle though so some p/e premium to a no growth cyclical is likely warranted.

[couta1]

I like the TRA business model but my thinking has changed, I now believe it is top of the cycle for them. Therefore it seems to expensive at the moment. Good chance they will grow cross cycle though so some p/e premium to a no growth cyclical is likely warranted. Have a look at the chart over the last five years, it's never been cheaper than it is right now, market overreaction and too cheap IMO.

[minimoke]

Have a look at the chart over the last five years, it's never been cheaper than it is right now, market overreaction and too cheap IMO.As they say, the knife is falling. When to catch the falling knife?. I reckon its probably gone nearly as low as its likely to. I've put an order in. Lets see how low it will go.

[winner69]

Jeez, since bull.... mentioned Turners debt levels are bad the share price has slumped into the 240s

Beagle told me to sell yesterday (no way going to get your 25%) .....should have listened as even getting back to breakeven of 257 seems a long way off

Todd was on the radio this morning .....stuttered his way through a few things but said that car sharing won’t hurt Turners

[minimoke]

Jeez, since bull.... mentioned Turners debt levels are bad ....Not helped by the need to find $10 - $12m for a share buy back

[winner69]

Not helped by the need to find $10 - $12m for a share buy back

Plenty of unused funds with the bank .....and could cheekily use the insurance float

[JohnnyTheHorse]

Wonder if Grant will do his own little buy back... got to use those extras directors fees on something. Probably going towards a new Ferrari though.

[winner69]

Wonder if Grant will do his own little buy back... got to use those extras directors fees on something. Probably going towards a new Ferrari though.

Grants getting grumpy because nobody wants to buy all the shares ...exit plan not working. Even the well networked Singapore guy cant seem to find a buyer

Get out of jail card is the only hope but then even at 300 / 320 the entranced ones would say opportunistic and resist to the end

[winner69]

Jeez share price still going down ...might be 230 something before the buyback starts

Baker et al nearly 20% down on their last purchase

[winner69]

Buying TRA shares isn’t investing ...its speculation

Ben Graham wrote about this in his book Security Analysis

[percy]

Ben might not,but I think property,sales,finance, and insurance would have his disciple ,Warren filling his boots.

[Beagle]

Buying TRA shares isn’t investing ...its speculation

Ben Graham wrote about this in his book Security Analysis

??? Its not speculation. Its got real earnings. Investing in companies that might earn some money one day or might not is speculation, like PPH.

[LAC]

If automotive sale are not doing so well as noted then the insurance business is going to slide as well, right? Property developments will be one offs.
Where would greater earnings come from? Their new sites?

I like their great model of clipping the ticket throughout the chain but it all starts with the first step of a customer walking in to purchase a used car. If that is having headwinds short term then there will be issues with the rest of the chain, is that right? Or am I missing something.... Their downgrade of profit was a kick in the gut for me personally. **sigh**

[percy]

If automotive sale are not doing so well as noted then the insurance business is going to slide as well, right? Property developments will be one offs.
Where would greater earnings come from? Their new sites?

I like their great model of clipping the ticket throughout the chain but it all starts with the first step of a customer walking in to purchase a used car. If that is having headwinds short term then there will be issues with the rest of the chain, is that right? Or am I missing something.... Their downgrade of profit was a kick in the gut for me personally. **sigh**

120 new dealers added in the last 6 months should go a long way to support finance and insurance's growth.
$4mil Turners originated finance loans a month going via TRA's Oxford Finance, rather than MTF,will add extra margin to Oxford.
Upskilling Turners sales staff should help them add on finance and insurance.
And yes new sites ,and new developed sites will add to sales, as well as property development margins..


NB.Slow down.From what I understand it was October,and it was only Auckland.I hear November is tracking better.
It was pointed out BuyRight Cars in Hamilton is trading better than expected. Early days for Wellington City and New Plymouth

[minimoke]

Jeez share price still going down ...might be 230 something before the buyback starts

Baker et al nearly 20% down on their last purchaseYou could be right. Closed at $2.46 and edging closer to my buy offer - which may have to be revised downwards. Buyers starting to dry up.

[Beagle]

When you are in a hole, stop digging. I dug a bit yesterday and am now deeper in my own hole. I have locked the shovel away and its not coming out again.

[percy]

Out of love already?
No surprises there...lol.

[Beagle]

No love for or against...just a realisation that adding to a losing position isn't always the most clever approach.
Very pleased I took steps to mitigate my losses on the way down.

[RupertBear]

When you are in a hole, stop digging. I dug a bit yesterday and am now deeper in my own hole. I have locked the shovel away and its not coming out again.

I dug a nice big hole for myself adding to my MPG holdings Mr Beagle :eek2: so far its worked out ok but that is down to luck and not good management. I am still going to sell my shovel :D

[couta1]

When you are in a hole, stop digging. I dug a bit yesterday and am now deeper in my own hole. I have locked the shovel away and its not coming out again. Be thankful that your hole is only deep enough to fit your foot into, I need climbing equipment to get to the bottom of mine and I haven't done any digging for yonks.

[ratkin]

What could possibly go wrong :D Opps...I vaguely recall some people saying it couldn't possibly go lower than the long term support at $2.80...and before that most people thought $3 was the floor. Where is the floor really ?

I can understand you rolling the dice at this level...odds don't look too shabby but probably best not to pretend its a one sided bet as quite a few people thought the same when the SP was higher. A downgrade could see this rapidly heading towards $2.00.


Well said Beagle, quite agree, heading towards 2.00 you were spot on

[McGinty]

When you are in a hole, stop digging. I dug a bit yesterday and am now deeper in my own hole. I have locked the shovel away and its not coming out again.

Sometimes the best lessons to learn are the ones that we don't learn the first time :D

[Leftfield]

??? Its not speculation. Its got real earnings. Investing in companies that might earn some money one day or might not is speculation, like PPH.

Mmmmm, In 12 months to May 2018 my 'speculation' on PPH earned me a positive return of 143%

What has your 'investment' return been on TRA ?

(Of course - pure speculation, no skill involved, pure luck. Disc; no longer hold PPH, never held TRA)

[couta1]

Sometimes the best lessons to learn are the ones that we don't learn the first time :D The market will always have another lesson to teach you no matter how much you learn and or how good you think you are.

[percy]

Well said Beagle, quite agree, heading towards 2.00 you were spot on

The $2.00 sellers better get in quickly,as the share buy back is only for 5% of the issued capital.
Big day for sellers starts tomorrow.
May end tomorrow too.?

[minimoke]

The $2.00 sellers better get in quickly,as the share buy back is only for 5% of the issued capital.
Big day for sellers starts tomorrow.
May end tomorrow too.?Up to 4.5m shares to buy. Total volume today was a mere 225,000. It will take then a while

[Hectorplains]

No sign of Toddhunter, then? Shame that, he got quite the fanboy welcome last time.

[alex f]

A lot of misery guts people out there.
The 30th September half was a mainly winter period with a 3% profit increase (taking off the property deal)

Why October (a month outside the reporting period) and a possible 5-10% downgrade had to be mentioned in this release is questionable, there are 5 more months to go in the next period.
October saw petrol prices of nearly $2.55 so people had less money to spend (and were in shock) and many cars were probably undesirable buys as well.
The weather in October was poor.

Petrol is now $2.08 in Wgtn, $1.95 in Levin
Summer is coming
The Govt enquiry in to petrol prices may also lower prices as well as the glut

[Ggcc]

Could Turners become a takeover target for HBL? I would think this right up their alley.... Maybe a capital raise and no dividend for HBL, but a new asset.

[SCOTTY]

The Govt enquiry in to petrol prices may also lower prices as well as the glut[/QUOTE]

Probably no need for the enquiry now. Just the threat was enough to scare the Arabs into dropping the price of crude and cause the $US to fall dropping the pump price here.

[McGinty]

The market will always have another lesson to teach you no matter how much you learn and or how good you think you are.

The market isn't in the business of teaching lessons, it's up to us as investors to learn our own lessons from the market and our actions within it.

A great investor will study his losses and learn from their mistakes (sometimes many repeated mistakes are required to really learn). They know that they may not always be right, but will always have a plan in place to manage any downside.

Losing some money on an investment is part of the risk, losing a lot of money is not.

One day I hope to be a great investor :)

[minimoke]

NZX opening will be interesting tomorrow. TRA SP must be at near an all time low. So does company accept this is the floor and buy up large. Or accept SP will fall even further and by waiting a little they can get more at a lesser price.

So whose up for a little game: what will volume be at COB tomorrow. I'll go first. 500k shares at less than $2.50

(Be wary the big spenders - there is one person there out to buy 25 shares - weird!)

[dreamcatcher]

Would assume there are rules how the buyback is managed ..................

Don't hold

[winner69]

NZX opening will be interesting tomorrow. TRA SP must be at near an all time low. So does company accept this is the floor and buy up large. Or accept SP will fall even further and by waiting a little they can get more at a lesser price.

So whose up for a little game: what will volume be at COB tomorrow. I'll go first. 500k shares at less than $2.50

(Be wary the big spenders - there is one person there out to buy 25 shares - weird!)

Buyback starts Friday mini

Wonder what this really means - Turners will adhere to an established set of principles agreed with its broker that seek to ensure that the buyback does not distort the market price for shares.

[winner69]

TRA share price has to go up today .....doesn’t it?

World markets all happy again ...that’s a start

[minimoke]

Buyback starts Friday mini
.Damn - I've lost a day somewhere. Oh well, thats one I'll never get back

[winner69]

Damn - I've lost a day somewhere. Oh well, thats one I'll never get back

It has been a long week ...esp in Turnerland

[percy]

It has been a long week ...esp in Turnerland

We live in interesting times.?.!

[winner69]

Chairman Baker reported as saying a share buyback is a good way to return capital to shareholders.

Makes him sound very benevolent doesn’t it, like being generous and doing shareholders a favour by buying their shares and putting them out of their misery.

But it wasn’t that long ago he held his hand out to shareholders asking for more cash to play with.

Weird and funny world we live in


Be a bit embarrassing if they ask for more cash in the next year or two .... Bull says debt levels are bad

[percy]

Announcement showed a lot of undrawn lines of credit avaliable to Turners.
I aso note they are adjusting their stock holding of vehicles,which will also free up capital.
The company generates profits.
Their Insurance company reserves provides capital for property developments.
The $4mil of loans a month Turners are now putting through Oxford finance, could again be put through MTF.

[BlackCross]

Announcement showed a lot of undrawn lines of credit avaliable to Turners.
I aso note they are adjusting their stock holding of vehicles,which will also free up capital.

I've been looking to replace my car and found their prices well above other dealers for sam car and kms. Perhaps they'll come down a bit now to raise cash for the buyback?
As for the buyback. Are they effectively also using money raised in the bond issue to support the shareprice and do the directors with substantial holdings a big favour?

[percy]

Yes the buyback will give me a larger slice of the cake too.

ps.Should you find the car you want at Turners,negotiate.Quote the vehicles you are comparing theirs with.
I found when buying a car it focusses the sellers mind if you show them a bundle of cash.[Works best with sole traders].

[winner69]

Phew ...TRA shareprice is going up

It’s not going to be a downer of a day ....cool

[percy]

Phew ...TRA shareprice is going up

It’s not going to be a downer of a day ....cool

Think shareholders win either way.
Share price goes up........................ the value of their holding goes up.
Share price goes down.................... the share buy back costs less.
A win win situation.!.........................lol.

[percy]

....but isn’t the cake a bit smaller
Not with their expanding foot print in property,finance,and insurance.

[Beagle]

A lot of misery guts people out there.
The 30th September half was a mainly winter period with a 3% profit increase (taking off the property deal)

Why October (a month outside the reporting period) and a possible 5-10% downgrade had to be mentioned in this release is questionable, there are 5 more months to go in the next period.
October saw petrol prices of nearly $2.55 so people had less money to spend (and were in shock) and many cars were probably undesirable buys as well.
The weather in October was poor.

Petrol is now $2.08 in Wgtn, $1.95 in Levin
Summer is coming
The Govt enquiry in to petrol prices may also lower prices as well as the glut

Well said.


The Govt enquiry in to petrol prices may also lower prices as well as the glut
Probably no need for the enquiry now. Just the threat was enough to scare the Arabs into dropping the price of crude and cause the $US to fall dropping the pump price here.


The Saudi's Russians and U.S. administration must be just as terrified of Cindy as we are lol. Someone told me she has been trying to claim credit for the prices coming down...disappointed I missed that particular bit of comedy.

[winner69]

Book value $2.43 at September

Trading above that now is a sign that the market expects much better financial performance in future ....ie actually earning more than it’s total cost of capital instead of currently struggling to do so.

[Snoopy]

Hey Beagle - was this the answer to the question you asked at the AGM that they deftly avoided answering (ie subtly told you to go away)


• Impairments on higher risk lending categories has been worse than expected.

A few points in the presentation seem to be at odds at what was said at road show and AGM presentations

I see in the HY2019 accounts that 'Impairment provision expense' was (3,951) up from (2,276) in the previous year. However to check out the actual 'impairment expense' for the period we have to look at the what has happened to the total provision over HY2019 . And that part of the accounts has not yet been released.

There is also something on the change of treatment of impairments in HY2019 result notes, referring to NZIFRS 9 and 15. An extra (2.160m) impairment charge seems to have arisen from that. But is this just in relation to debt collection services? Or does in apply to all loan contracts? Anyone care to offer an opinion?

SNOOPY

[Beagle]

Hi Snoopy me ol mate.
Could this be to do with the new accounting standard that requires them to change the basis of calculating impairments ?
In Heartland's case I think they explained this as they have to start making impairment provisions right from the outset of new loans based on predictive modelling rather than waiting until new loans start to become overdue. In HGH's case I think they took about an $18m charge against reserves for this, (just going off memory). Hope this helps. (You're the beagle with the most available time to get your snout into this, which is always much appreciated) :)

[winner69]

I see in the HY2019 accounts that 'Impairment provision expense' was (3,951) up from (2,276) in the previous year. However to check out the actual 'impairment expense' for the period we have to look at the what has happened to the total provision over HY2019 . And that part of the accounts has not yet been released.

There is also something on the change of treatment of impairments in HY2019 result notes, referring to NZIFRS 9 and 15. An extra (2.160m) impairment charge seems to have arisen from that. But is this just in relation to debt collection services? Or does in apply to all loan contracts? Anyone care to offer an opinion?

SNOOPY

Snoops ....that 2.160m you mention is part of the 1.839m adjustment to March 18 Retained Earnings (see the Changes in Equity part of the accounts)

Effectively reduced Shareholder Equity with no impact on the Income Statement (ie profit) this financial year

The new standards do mean they need at what’s provided for differently than in the past - probably more detail in the full half year report and then you can work out if there is a real impact or not.

[percy]

Hi Snoopy me ol mate.
Could this be to do with the new accounting standard that requires them to change the basis of calculating impairments ?
In Heartland's case I think they explained this as they have to start making impairment provisions right from the outset of new loans based on predictive modelling rather than waiting until new loans start to become overdue. In HGH's case I think they took about an $18m charge against reserves for this, (just going off memory). Hope this helps. (You're the beagle with the most available time to get your snout into this, which is always much appreciated) :)

Heartland.
New accounting standard IFRS9.HGH adopted estimated $25mil,with an impact on equity of $14mil to $18mil ,which also resulted in an increase in the impairment ratio..

[couta1]

Methinks this share buy back is going to go down a treat looking at the depth chart today.

[winner69]

Methinks this share buy back is going to go down a treat looking at the depth chart today.


.......esp if the bargain hunters who want to get on the bus start competing.

Bargain of the century

Go you good thing TRA

[winner69]

Heartland.
New accounting standard IFRS9.HGH adopted estimated $25mil,with an impact on equity of $14mil to $18mil ,which also resulted in an increase in the impairment ratio..

Just as well it didn’t go against profit eh

[Beagle]

Just as well it didn’t go against profit eh

My bean counting philosophical thought for the day.
The concept of proactively provisioning delinquencies based on historically experienced averages (by loan type) is clearly a more accurate way of matching costs off against revenues in the appropriate period. What this accounting standard change highlights is that finance company and bank provisioning has always been historically focused and event driven as opposed to forward proactive thinking.

Couta1 - You know you want to take those shares out at $2.50 :D I would but my shovel is locked in the cupboard and this puppy has to start barking before its allowed out again.

[couta1]

Mr Baker buys 100k more shares on market.

[blackcap]

Mr Baker buys 100k more shares on market.

at $2.47. Looks like he likes picking bottoms :)

https://www.nzx.com/announcements/327595

[couta1]

at $2.47. Looks like he likes picking bottoms :)

https://www.nzx.com/announcements/327595 I reckon he almost picked it purrfectly.

[Beagle]

I reckon he almost picked it purrfectly.

Woof, woof :) That and the $10m+ share buy-back starting tomorrow might just be the catalyst this needs to get it going. Fuel prices have come back heaps too. Got a fill of 91 octane fuel today inclusive of Cindy's 11.5 cent per liter new Auckland tax rort at just $1.99 per liter ! Might actually start to enjoy my motoring now :)

[winner69]

I reckon he almost picked it purrfectly.

What they say about averaging down?

[McGinty]

What they say about averaging down?

I believe it is "losers average losers" - Paul Tudor Jones

But it's good to see Grant finally put his directors fees to good use.

[percy]

I believe it is "losers average losers" - Paul Tudor Jones

But it's good to see Grant finally put his directors fees to good use.

I think it shares moving to people who know the real value of a company,from people who do not.

[couta1]

I think it shares moving to people who know the real value of a company,from people who do not. Exactly, why else would you buy another 100k shares when you already have 6 mill of them if you didn't believe the share is undervalued.

[winner69]

Go Turners ....one of the stars of the NZX today ...but not as good as Metro Glass my other punt last week for a quick win.

Getting closer to breakeven (suppose most of us are under water) .... and heck seeing everybody wants a share of the action I might even get my 25% quick win ...OK I'll settle for 20%


Investing in WINX.ASX seems a lot safer in these turbulent times

[minimoke]

Exactly, why else would you buy another 100k shares when you already have 6 mill of them if you didn't believe the share is undervalued.He bought at $2.47 which sets the value for the 6m other shares. He's no doubt hoping that this send a message to market to increase value above $2.47 or at least to slow the tumble Didnt work last time. Bought in July at $3.03. Bought in June at $3.03

[percy]

He bought at $2.47 which sets the value for the 6m other shares. He's no doubt hoping that this send a message to market to increase value above $2.47 or at least to slow the tumble Didnt work last time. Bought in July at $3.03. Bought in June at $3.03

Bit like the electric skillet I brought last Friday for $40.00 at Briscoes.
It was the same skillet I looked at on Thursday priced at $99.99.
I think Grant Baker knows the real value of Turners shares, and I expect it would be well north of $3.03.
Must admit I agree with him.

[Beagle]

Bit like the electric skillet I brought last Friday for $40.00 at Briscoes.
It was the same skillet I looked at on Thursday priced at $99.99.
I think Grant Baker knows the real value of Turners shares, and I expect it would be well north of $3.03.
Must admit I agree with him.

Briscoes been working those sort of false discounts for a very long time. Basically if you pay full retail you get completely rorted and even on their super big discount days they're still doing extremely well out of you. Lets hope with the shares that Grant Baker knows the real value of said skillet https://www.kmart.co.nz/product/electric-frypan/871301 $35
$3.20 x 35/40 = $2.80 = probably about fair value for Turners in my opinion :)
P.S. Doesn't really seem to matter what the product on sale at Briscoes is and what super special they're claiming it to be, its almost always cheaper at K Mart.
Rod Duke is pretty cunning with his discount claims isn't he !

[percy]

The round skillet was what we wanted.Kmart square one was not.Kmart are certainly very much a major retail force.
Yes Rod Duke had them linning up to get into Salisbury Street's Car Park.!
Fair value on Turners.? The foundations are there for a great company.Should the board deliver on their strategy, we will see the share price double with in three years.
With the board holding so many shares I would think they are "well focussed".

[McGinty]

Looks like Grant has lost the love already, 100k for sale at $2.52 in the closing auction.

Or is he doubling up with the $2.51 $100k bid?

[blackcap]

Looks like Grant has lost the love already, 100k for sale at $2.52 in the closing auction.

Nah just looking for a quick $5,000 trading profit :)

[couta1]

Looks like Grant has lost the love already, 100k for sale at $2.52 in the closing auction.

Or is he doubling up with the $2.51 $100k bid? Or perhaps he's wants another 100k bidding at $2,51.

[minimoke]

Or perhaps he's wants another 100k bidding at $2,51.
I missed that bid but see both the 100,000 buy / sell have disappeared

[Snoopy]

Snoops ....that 2.160m you mention is part of the 1.839m adjustment to March 18 Retained Earnings (see the Changes in Equity part of the accounts)

Effectively reduced Shareholder Equity with no impact on the Income Statement (ie profit) this financial year

The new standards do mean they need at what’s provided for differently than in the past - probably more detail in the full half year report and then you can work out if there is a real impact or not.


Heartland.
New accounting standard IFRS9.HGH adopted estimated $25mil,with an impact on equity of $14mil to $18mil ,which also resulted in an increase in the impairment ratio..


My bean counting philosophical thought for the day.
The concept of proactively provisioning delinquencies based on historically experienced averages (by loan type) is clearly a more accurate way of matching costs off against revenues in the appropriate period. What this accounting standard change highlights is that finance company and bank provisioning has always been historically focused and event driven as opposed to forward proactive thinking.


Thanks for this. So could it be that the significant increase in impairment provision expense for TRA over HY2019 is just reflecting the increasing provisioning required by new accounting standards? Nothing to do with more MTF non-recourse loans supposedly going sour?

SNOOPY

[BlackCross]

Pump'ndump guys? I'm in.

[winner69]

Thanks for this. So could it be that the significant increase in impairment provision expense for TRA over HY2019 is just reflecting the increasing provisioning required by new accounting standards? Nothing to do with more MTF non-recourse loans supposedly going sour?

SNOOPY

could will be the new methodology but when they say “Impairments on higher risk lending categories has been worse than expected.” I’d say not ....doesn’t say mtf but but something specific they didn’t expect

[percy]

could will be the new methodology but when they say “Impairments on higher risk lending categories has been worse than expected.” I’d say not ....doesn’t say mtf but but something specific they didn’t expect

Well they certainly did not expect such poor quality MTF originated non-recourse loans.From MTF announcement Turners tightened their lending criteria in April.
So it looks to me as it is still the MTF non-recourse loans they are talking about.Interestingly Turners comment that their own loans have been of lot better quality,and in fact they are putting $4 mil of their own loans through their Oxford Finance company, rather than MTF.This will give Turners a better margin,however I expect it will weaken MTF's loan book.
From April to now I would have thought Turners would have taken action on any or all of the non performing MTF loans.I have never heard of finance companies dithering or dorderling,so again I think a lot, or most impairements will have been taken in this interim result.
Both HGH and TRA now insist they are at the start of any loan application,and both have tightened their lending criteria.

[minimoke]

Is 25,000 at $2.55 their opening buy-back bid?

[Beagle]

Is 25,000 at $2.55 their opening buy-back bid?
Looks like it to me mate.

[blackcap]

Looks like it to me mate.

If that is the case then that is very irresponsible on their brokers part. Considering closing price yesterday and past days trading. I doubt that was TRA buyback but if it is well the mind boggles.

[winner69]

If that is the case then that is very irresponsible on their brokers part. Considering closing price yesterday and past days trading. I doubt that was TRA buyback but if it is well the mind boggles.

Agree there mate

Who on this thread is going to keep a running total of what they buy and how much for ...we will get announcements daily (if they buy)

Too much hype around this buyback methinks ....wonder what this means — • Turners will adhere to an established set of principles agreed with its broker that seek to ensure that the buyback does not distort the market price for shares.

[winner69]

Most buybacks have a rule of thumb / best practice that only a certain percentage of the daily turnover should be buyback related.

[minimoke]

Well, someone has picked the 25,000 up pre-open.

[minimoke]

Odd that there is 20,000 available for sale at less than $2.55

[winner69]

Odd that there is 20,000 available for sale at less than $2.55

Used car salesmen tricks .....be careful

[toddhunter]

Hi all Todd Hunter here....I think it is worth just clarifying the safeguard guidelines that we adhere to in regard to the Buyback...there are no "tricks" going on.



Turners will only buy back Shares through NZX’s trading/order matching system and during normal trading hours (i.e. there will be no off-market transactions).
Shares will not be purchased at a price which is more than 10% above the average closing price for Shares on the NZSX over the previous five trading days.
Turners will not take part in the opening transaction on a trading day.
it is intended that the purchases by Turners over a one week period will not exceed 30% of the volume of Shares traded over that one week period.


The Management and Directors believe this is a good use of our capital at present, and based on the investor meetings I have had this week everyone agrees. You may also have noticed that our Chairman Grant Baker purchased 100,000 shares himself yesterday.

As an aside I am happy to arrange a conference call or meeting with Grant and myself for anyone who is interested in talking through the business or to answer any specific questions. todd.hunter@turners.co.nz

Thanks
Todd

[couta1]

Thanks for outlining the above Todd, clears things up.

[toddhunter]

Sorry have just realised that many of you have picked up on Grant's share purchase yesterday...apologies for covering old ground there.

[minimoke]

Sorry have just realised that many of you have picked up on Grant's share purchase yesterday...apologies for covering old ground there.
Not much gets past the folks here!. Thanks for your response. Great to see communications to shareholders and interested community.

[BlackCross]

"...Some observers suspect that the enthusiasm of top managers for share buybacks may also be motivated by boosting the value of the variable part of their remuneration package which often includes stock options and outright share allocations.
"The remuneration incentive of executives based on the share price is without a doubt behind this increase in share buybacks," said Christophe Moussu, a professor at the ESCP Europe business school..."

I wonder just how many TRA executives remuneration depends to some degree on a healthy share price?
My other concern is that most buybacks are funded from excess profits - these seem to be funded by debt?.

[percy]

Thanks for outlining the above Todd, clears things up.

Agree.
Thanks Todd.

[winner69]

"...Some observers suspect that the enthusiasm of top managers for share buybacks may also be motivated by boosting the value of the variable part of their remuneration package which often includes stock options and outright share allocations.
"The remuneration incentive of executives based on the share price is without a doubt behind this increase in share buybacks," said Christophe Moussu, a professor at the ESCP Europe business school..."

I wonder just how many TRA executives remuneration depends to some degree on a healthy share price?
My other concern is that most buybacks are funded from excess profits - these seem to be funded by dept?.



Total Shareholder Return (TSR) is often another component of exec remuneration

TSR = increase/decrease in shareprice + dividends + capital returns to shareholders (ie buybacks)

[Snoopy]

and everyones hoping that 10 - 20% decline in business doesnt mean reduced dividends and buybacks reduced to conserve cash


The TRA dividend policy is to pay out 50-60% of earnings as dividends. Grant Baker in the October 2018 shareholder update states:

"We are targeting a minimum FY2019 dividend of 17cps."

Based on 84.802m shares on issue, the total money to pay this dividend will be:

0.170 x 84.802m = $14.4m

The projected profit for FY2019 was for NPBT of $34m to $36m. We are told that NPBT could be impacted by 5 – 10% from the previous guidance range. Worst case this means NPBT of $30.6m to $32.4m. Take off tax at 28% and this leaves an NPAT of: $22.0m to $23.3m. This means that the projected $14.4m dividend would take 62%-65% of earnings: above the 50% to 60% dividend guidance range. However, I would be surprised if dividends were actually reduced, even in this most pessimistic scenario. That's because once dividend goals are announced, and are well covered by earnings, management do not like to back flip.

If there is to be a reduction in dividends, that might come in FY2020. But FY2020 is an entirely different year. Who knows what conditions in the used car market will be by then.

SNOOPY

[winner69]

The TRA dividend policy is to pay out 50-60% of earnings as dividends. Grant Baker in the October 2018 shareholder update states:

"We are targeting a minimum FY2019 dividend of 17cps."

Based on 84.802m shares on issue, the total money to pay this dividend will be:

0.170 x 84.802m = $14.4m

The projected profit for FY2019 was

SNOOPY

I’ll let you complete your calcs but going to be close call

Don’t forget to reduce number of shares sometime by 5%

[Beagle]

Good that the company has instituted a buy-back and listened to my suggestion regarding exactly that as posted a little while back.

The next step Todd is for the company to lift the dividend payout ratio to 60-70%, (recall I posted some time ago that Colonial Motors are managing to expand their business nicely wwith a payout ratio of 65%).

This lift could be done in tandem with a newly instituted dividend reinvestment program which would give those shareholders who wanted to reinvest their dividend an opportunity to do so at a modest discount to the volume weighted average price for the five days after ex dividend.

I would suggest to start this program and new dividend policy next year at a 5% discount, (previous capital raisings have traditionally been higher than this so this discount while higher than some other companies is still cheaper than the discounts at which the company has previously raised capital).

Why is the above a good idea ?
I think there are a significant number of Turners shareholders who are seeking yield for their retirement income. Those that aren't can reinvest. This puts the power back into shareholders hands to a certain extent in terms of what percentage of profits they'd like to see paid out.

For example in the FY20 year if Turners were looking at 30 cents per share in earnings and paid out 2/3rd's of that, 20 cps fully imputed this would equate to 20 / 0.72 = 27.77 cps gross and provide more than a 10% gross yield, (based on today's share price) for those shareholders that wanted yield.

I believe shareholders would welcome this and we would see a rerating in the share price.

[winner69]

Snoops - irrespective of whether its 50% or 60% or even 70% they’ll still pay the promised 17 cents dividend as they’ll play the ‘we have strong cash flows and confidence in the future” trick

And if you were Chairman Baker would you want to face the wrath of an angry beagle demanding why dividend wasn’t 17 cents .......assuming beagle hasn’t fallen out of love

[Beagle]

LOL Its never a good idea to take food out of a Beagle's dog bowl. If one is foolish enough to do this they're known to bite first and bark about the questions later :D

[Snoopy]

The next step Todd is for the company to lift the dividend payout ratio to 60-70%, (recall I posted some time ago that Colonial Motors are managing to expand their business nicely wwith a payout ratio of 65%).


They are well ahead of you Beagle. They are in the process of reducing net profit by 20% which means by holding the dividend steady, the payout ratio goes up to 60-70%. You should be well satisfied ;-P

SNOOPY

[winner69]

They are well ahead of you Beagle. They are in the process of reducing net profit by 20% which means by holding the dividend steady, the payout ratio goes up to 60-70%. You should be well satisfied ;-P

SNOOPY

Snoops - go and wash your mouth out with soapy water for making such outrageously misleading claims. ����

[minimoke]

I'm up for some games and shenanigans so re-entered today at $2.50. Lets see how this plays out.

[percy]

I'm up for some games and shenanigans so re-entered today at $2.50. Lets see how this plays out.

With a net 6.6% fully imputed divie paid quarterly,the next one at the end of January, I would think it will play out very profitably for you.

[winner69]

With a net 6.6% fully imputed divie paid quarterly,the next one at the end of January, I would think it will play out very profitably for you.

Wrong percy .....it’s with an ever increasing 6.6% fully imputed dividend

[percy]

Wrong percy .....it’s with an ever increasing 6.6% fully imputed dividend

Thank you W69 for correcting my absolute blunder.
Yes ever increasing.
Has a nice ring to it.

[minimoke]

With a net 6.6% fully imputed divie paid quarterly,the next one at the end of January, I would think it will play out very profitably for you.
My plan relies on an increasing SP. As we have experienced previously no point enjoying a divvy when the SP capitulation is greater.

[percy]

My plan relies on an increasing SP. As we have experienced previously no point enjoying a divvy when the SP capitulation is greater.

I would not worry about the sp.
It will double.
May take two years.May take three years.
My only worry is they get taken over under $4.00 in the next or so.

[Beagle]

They are well ahead of you Beagle. They are in the process of reducing net profit by 20% which means by holding the dividend steady, the payout ratio goes up to 60-70%. You should be well satisfied ;-P

SNOOPY
That's way too harsh mate. Latest consumer confidence survey out today and has rebounded from a very low point in October. Fuel prices are down significantly. Please be a good dog and try and keep up.


With a net 6.6% fully imputed divie paid quarterly,the next one at the end of January, I would think it will play out very profitably for you.
17 / 250 = 6.8% net, its going up already lol = 9.44% gross.

[minimoke]

I would not worry about the sp.
It will double.
May take two years.May take three years.I think that is extremely improbable. best high over the past two years was $3.90. Directors and management still the same. All they have done is drive SP lower.

I do however expect these manipulations to create an SP enhancement.

[Beagle]

I think that is extremely improbable. best high over the past two years was $3.90. Directors and management still the same. All they have done is drive SP lower.

I do however expect these manipulations to create an SP enhancement.

+1 Confirmation bias by some holders who have a large percentage of their portfolio in one stock can play real tricks on one's mind. The other day another poster with a large stake in another company reckoned RYM would be $30 in 5.5 years time. Another extremely improbably assertion in my opinion. There must be an interesting psychological study somewhere that digs down into this sort of thing, it would be fascinating to read. For mine, this is a reasonable yield stock at this level trading slightly below fair value. Its by no means the only stock trading below my assessed fair value, e.g. OCA.

[percy]

I think that is extremely improbable. best high over the past two years was $3.90. Directors and management still the same. All they have done is drive SP lower.

I do however expect these manipulations to create an SP enhancement.

I totally disagree.
Directors has seen Turners grow their Auckland business by buying Buy Right Cars.Would have taken years to have reached the scale of operation had they not done so,without that acquisition.We have seen then bulk up finance and insurance.Very big deals.A lot of solid foundations laid over the past couple of years.
Strategy is sound and is working,and gaining momentum.

[minimoke]

Turners will only buy back Shares through NZX’s trading/order matching system and during normal trading hours (i.e. there will be no off-market transactions).
Shares will not be purchased at a price which is more than 10% above the average closing price for Shares on the NZSX over the previous five trading days.
Turners will not take part in the opening transaction on a trading day.
it is intended that the purchases by Turners over a one week period will not exceed 30% of the volume of Shares traded over that one week period.



Heres the plan. Stump up $100,000 today and mop up all those shares today at $2.60 and less. Month closes nicely for shareholders and sets a tone for next month.

Or for another $35k take it to $2.68

[minimoke]

I totally disagree.
.Disagreement is fine. The charts tell the story.

[percy]

Disagreement is fine. The charts tell the story.

Again I disagree.
Solid progress in their business strategy will see the charts turn up.

[Beagle]

Again I disagree.
Solid progress in their business strategy will see the charts turn up.

You've been saying that for a long time now. Great free lesson for people here on technical analysis. Ignore the charts at your peril !

[percy]

Different objectives.
A trader will buy/ sell on charts.
An investor will look at the business and buy long term.
Turners suits me as a long term investment.I like their business model.
Can you see someone like Greg Tomlinson looking at OCA or HGH's charts?
Most probably $80 mil plus invested in those two companies.
He made his money investing.
I have never heard of Warren Buffett,Peter Lynch,John Templeton etc making a buying decission on charts,

[minimoke]

Heres the plan. Stump up $100,000 today and mop up all those shares today at $2.60 and less. Month closes nicely for shareholders and sets a tone for next month.

Or for another $35k take it to $2.68
Hmm, TRA didn't like my cunning plan. I wonder what else they have up their sleeve.

[winner69]

Well that was a bad week for me with Turners ...no 25% gain likely and looks like it will a long time to get back to breakeven (257)

On the other hand things looking good with Metro Glass ....now in profit and if that huge crossing at 55 after the close of what’s going to happen next week i’ll Be rocking.

[percy]

Well that was a bad week for me with Turners ...no 25% gain likely and looks like it will a long time to get back to breakeven (257)

On the other hand things looking good with Metro Glass ....now in profit and if that huge crossing at 55 after the close of what’s going to happen next week i’ll Be rocking.

Always sell your losers and buy more of your winners.....lol.

[winner69]

Always sell your losers and buy more of your winners.....lol.

Turners must be a loser for you as well by now ...you selling?

[Brain]

Disagreement is fine. The charts tell the story.

The Charts tell the History. Management ability will determine the future.

[percy]

Turners must be a loser for you as well by now ...you selling?

Yes,TRA is a loser for me [at present].
No not selling.I have my portfolio, including TRA, as I want it.
A good balance of high yielding stocks paying increasing fully imputed divies,smaller agressive companies paying modest divies,and a few high risk specs, which hopefully my extensive research will prove they are tomorrow's absolute gems.

[percy]

The Charts tell the History. Management ability will determine the future.

What a great post.

[winner69]

The Charts tell the History. Management ability will determine the future.

The Charts tells the History of Management Performance. Market Sentiment will determine the future

Or something like that

[Brain]

Market sentiment can be and often is bipolar.

[Joshuatree]

The Tardus will tell the future, the charts are historic and history never repeats. Ambitous management can never be trusted, performance depends on how many free options are given. The future is unwritten. The CEO living in a 2002 people mover will install confidence and operations run from a container will ensure success.The mag wheels being flogged separately are the signal to go all in.Thats how it goes, but have a spare battery just in case.:)

[bull....]

The TRA dividend policy is to pay out 50-60% of earnings as dividends. Grant Baker in the October 2018 shareholder update states:

"We are targeting a minimum FY2019 dividend of 17cps."

Based on 84.802m shares on issue, the total money to pay this dividend will be:

0.170 x 84.802m = $14.4m

The projected profit for FY2019 was for NPBT of $34m to $36m. We are told that NPBT could be impacted by 5 – 10% from the previous guidance range. Worst case this means NPBT of $30.6m to $32.4m. Take off tax at 28% and this leaves an NPAT of: $22.0m to $23.3m. This means that the projected $14.4m dividend would take 62%-65% of earnings: above the 50% to 60% dividend guidance range. However, I would be surprised if dividends were actually reduced, even in this most pessimistic scenario. That's because once dividend goals are announced, and are well covered by earnings, management do not like to back flip.

If there is to be a reduction in dividends, that might come in FY2020. But FY2020 is an entirely different year. Who knows what conditions in the used car market will be by then.

SNOOPY

you see what i mean imagine a 10 20% decline.

i think there next update is of big importance. will show us if sales decline was a blip or somethink more going on. take your punt for a bounce or a decline lol

[McGinty]

Different objectives.
A trader will buy/ sell on charts.
An investor will look at the business and buy long term.
Turners suits me as a long term investment.I like their business model.
Can you see someone like Greg Tomlinson looking at OCA or HGH's charts?
Most probably $80 mil plus invested in those two companies.
He made his money investing.
I have never heard of Warren Buffett,Peter Lynch,John Templeton etc making a buying decission on charts,


Have you heard of a investor called Stan Druckenmiller, apparently he does use TA to guide him on investment decisions and he's only managed to return over 30% p.a over the last 30 years (yes that does beat Buffett).

https://www.youtube.com/watch?v=G-MlrpoMig0

A good interview of a man who seldom does interviews :)

[minimoke]

The Charts tell the History. Management ability will determine the future.If that truism was indeed true we should be able to back test it.

So lets wind the clock back two years and apply it.

Back then SP was about $3.50. We invest relying on managements ability to determine the future.

For 5 months management do a great job determining the future and as a result the SP rises to $3.90. Excellent. We have about a 10% rise enjoying those glorious dividends.

From May 2017 management keep determining the future. And they have delivered great divvies (Percy:- 5% - 6% PA??). One year later SP is at $3.00. Hmm a 25% drop in capital value

Never fear. We have faith in management determining the future.

Hmm. Nov SP is at $2.50. A bit over a further 15% drop in capital value while those 6% dvies have flooded in.

Do we continue to have faith in management. No!

Do the charts tell us anything?. Yes Whatever management has done is eroding shareholder wealth.

So do I have faith in Management. No.

But I do have faith in the market and management to manipulate the SP sufficiently to return me a gain on my @investment@.

[winner69]

If that truism was indeed true we should be able to back test it.

So lets wind the clock back two years and apply it.

Back then SP was about $3.50. We invest relying on managements ability to determine the future.

For 5 months management do a great job determining the future and as a result the SP rises to $3.90. Excellent. We have about a 10% rise enjoying those glorious dividends.

From May 2017 management keep determining the future. And they have delivered great divvies (Percy:- 5% - 6% PA??). One year later SP is at $3.00. Hmm a 25% drop in capital value

Never fear. We have faith in management determining the future.

Hmm. Nov SP is at $2.50. A bit over a further 15% drop in capital value while those 6% dvies have flooded in.

Do we continue to have faith in management. No!

Do the charts tell us anything?. Yes Whatever management has done is eroding shareholder wealth.

So do I have faith in Management. No.

But I do have faith in the market and management to manipulate the SP sufficiently to return me a gain on my @investment@.

Great piece of TA analysis with some FA as well. Well done minimoke.

So management (prob need to include the Board) ability has been abysmal and what they’ve done has eroded a lot of shareholder wealth.

Trend theory says the entrenched trends often need a ‘shock’ to change the direction of the trend

Time for a few sackings and getting a few decent managers maybe.

[Beagle]

About 4 years ago the SP was 28 cps before the 10:1 share consolidation ($2.80) so we have seen truly woeful performance relative to the NZX50. What this suggests to me is there's actually not a lot of money in the used car game and its a very, very tough industry.
Market over supplied at present ? The management team reckon there's market consolidation to come.
Interesting times in the industry.
AHG in Australia continues to get smashed.
But none of this is a concern because our resident optimist who has been talking this up consistently for years now tells us the share price is going to double in 2-3 years :D

[percy]

Have you heard of a investor called Stan Druckenmiller, apparently he does use TA to guide him on investment decisions and he's only managed to return over 30% p.a over the last 30 years (yes that does beat Buffett).

https://www.youtube.com/watch?v=G-MlrpoMig0

A good interview of a man who seldom does interviews :)

No never heard of him.
Thanks for posting the link and I look forward to watching it.

[percy]

About 4 years ago the SP was 28 cps before the 10:1 share consolidation ($2.80) so we have seen truly woeful performance relative to the NZX50. What this suggests to me is there's actually not a lot of money in the used car game and its a very, very tough industry.
Market over supplied at present ? The management team reckon there's market consolidation to come.
Interesting times in the industry.
AHG in Australia continues to get smashed.
But none of this is a concern because our resident optimist who has been talking this up consistently for years now tells us the share price is going to double in 2-3 years :D

I still think they have the right business strategy, that will prove their business model is excellent,and will produce long term benefits to shareholders.
I think they have the right board and management in place.

[Leftfield]

About 4 years ago the SP was 28 cps before the 10:1 share consolidation ($2.80) so we have seen truly woeful performance relative to the NZX50. What this suggests to me is there's actually not a lot of money in the used car game and its a very, very tough industry.

I agree. One of my key investment goals is only investing in shares that are likely to outperform NZX50. Still not tempted by TRA even though the insurance, property and finance sides help shore it up. It needs to prove its model a tab more. That said, I like that the CEO takes an interest in, and responds to this forum.

[hardt]

Macro investors - Druckenmiller, Soros and Rogers are all better than Buffet just less vocal about it and far less lovable.

[Snoopy]

The Charts tell the History. Management ability will determine the future.




If that truism was indeed true we should be able to back test it.

So lets wind the clock back two years and apply it.

Back then SP was about $3.50. We invest relying on management's ability to determine the future.

For 5 months management do a great job determining the future and as a result the SP rises to $3.90. Excellent. We have about a 10% rise enjoying those glorious dividends.

From May 2017 management keep determining the future. And they have delivered great divvies (Percy:- 5% - 6% PA??). One year later SP is at $3.00. Hmm a 25% drop in capital value

Never fear. We have faith in management determining the future.

Hmm. Nov SP is at $2.50. A bit over a further 15% drop in capital value while those 6% dvies have flooded in.

Do we continue to have faith in management. No!

Do the charts tell us anything?. Yes Whatever management has done is eroding shareholder wealth.

So do I have faith in Management. No.

But I do have faith in the market and management to manipulate the SP sufficiently to return me a gain on my @investment@.

I would suggest that there are many things management can influence. But the one thing they cannot influence is the share price. That would be illegal and they would be potentially subject to prosecution if they tried. The only thing that management/'the board' can do to boost the TRA share price is to buy shares 'on market' in the small window of time following the announcement of a result, which allows insiders to purchase. Grant Baker has certainly done this.

From the 'Investment Story' thread we can see that the underlying historical PE ratio at 30-09-2017 was 14.9. That declined to 13.1 a year later. It is difficult to forecast what the PE will be at 30-09-2019, because we don't know what one off insurance adjustments or property sales Turners are counting on to meet their profit projections. With the share price declining to $2.50ish it does seem that the underlying PE is liable to shrink again. So a significant proportion of the share price decline can be explained by the PE ratio contraction over the period. This is outside of management control. Shareholders cannot be told what multiple they should pay for TRA earnings.

The final point I wanted to make concerns the break up of 'the Business Bakery', with formers shareholders of that cornerstone stake in TRA going their own way. We should assume that the Business Bakery stakeholders expect to go off on their own tangents into the future. Grant Baker may be buying. But others may be creating an overhang of expected share sales. This isn't good for the share price. But once again today's management can do nothing about that.

SNOOPY

[winner69]

Milford still appear to be in love with Turners even though underwater

Good to see gurus share percy’s, snoopy’s, couta’s and beagle’s view that Turners are something special

Don’t think Salt have sold any for a while ...even more support.

[minimoke]

I would suggest that there are many things management can influence. But the one thing they cannot influence is the share price. Of course they influence the share price - everything they do is subject to a market reaction. Which is why a share buy back is an attempt to influence the market to a higher SP.

[winner69]

Of course they influence the share price - everything they do is subject to a market reaction. Which is why a share buy back is an attempt to influence the market to a higher SP.

That’s quite polite way of saying it ....some might say the buyback is an attempt to dig themselves out of the proverbial (using share holders money that they recently collected of them)

[Snoopy]

Of course they influence the share price - everything they do is subject to a market reaction.


The issue is, TRA management can't control what the market reaction will be. If 'eps' goes up (which management can influence) and market sentiment reduces the PE value of those earnings to the extent that the share price declines.... then...there is nothing management can do (in the short term).

To build trust amongst investors, sometimes you need clarity and consistency of earnings. This can take time.



Which is why a share buy back is an attempt to influence the market to a higher SP.


A share buyback changes the underlying mathematics of how earnings are distributed. The same profit distributed over less shares means higher earnings per share. So if the market is prepared to pay a certain PE ratio for TRA shares then the price that the market will pay post buy back should go up. This isn't influencing the market. Quite the contrary: It is assuming the market's attitude to TRA remains unchanged!

SNOOPY

[BlackCross]

"A share buyback changes the underlying mathematics of how earnings are distributed. The same profit distributed over less shares means higher earnings per share..."

Minus the cost of repayment of the capital (plus interest charges) incurred in buying these shares. Or is it magic money that comes from nowhere?

[BlackCross]

In my mind, there's almost no excuse for buying back stock using borrowed money. (And I consider using cash on hand to buy back shares while borrowing money for other corporate purposes as the same thing.)

"This is just a horrible practice, and I can't think of a single valid argument for doing it. A stock might get a short-term bounce that satisfies short-term shareholders, but that comes at the expense of long-term investors....."
https://realmoney.thestreet.com/articles/03/28/2016/beware-firms-borrow-cash-stock-buybacks

[percy]

Buying back 4,474,000 shares at $2.57 would require $11.498 mil.
Cost of funding at 5% would be $574,909 which would be deductable.
Savings on dividends, which are paid from after tax profit would be $738,210.

BlackCross.
The buyback makes real sense to me.
The brought back shares will be cancelled.
I actually think we will see a stronger balance sheet rather than a weaker as a result of the buy back.

[BlackPeter]

In my mind, there's almost no excuse for buying back stock using borrowed money. (And I consider using cash on hand to buy back shares while borrowing money for other corporate purposes as the same thing.)

"This is just a horrible practice, and I can't think of a single valid argument for doing it. A stock might get a short-term bounce that satisfies short-term shareholders, but that comes at the expense of long-term investors....."
https://realmoney.thestreet.com/articles/03/28/2016/beware-firms-borrow-cash-stock-buybacks


Looks like you forgot to copy one essential paragraph:

Your citation above is proceeded by:


I also ran a few tests recently and found that one of my favorite theories holds water: Companies that borrow money to buy back shares at high multiples to earnings lag the market over time.

Now - you can call TRA a lot of things, but it is certainly not a company "at high mulitples to earnings".

The author talks about companies with PE above 25 (which is equivalent to a 4% return on shareholder capital) - and he well might have a point!

TRA has however a longterm backward PE of 14.1 and a forward PE of 8.4 (which equates nearly 12% return on shareholder capital).

Spot the difference?

Borrowing monney for say 5% to make 12% does make a lot of sense ...

[blackcap]

Looks like you forgot to copy one essential paragraph:

Your citation above is proceeded by:



Now - you can call TRA a lot of things, but it is certainly not a company "at high mulitples to earnings".

The author talks about companies with PE above 25 (which is equivalent to a 4% return on shareholder capital) - and he well might have a point!

TRA has however a longterm backward PE of 14.1 and a forward PE of 8.4 (which equates nearly 12% return on shareholder capital).

Spot the difference?

Borrowing monney for say 5% to make 12% does make a lot of sense ...

Well said BP. That was my initial thoughts too. if TRA are making a return close to 10% and can borrow at close to 5, then a buy back makes huge sense and this will benefit the shareholders in 2 ways. It will increase EPS for those remaining on the register and the cost of the cancelled shares is very low.

[winner69]

Well said BP. That was my initial thoughts too. if TRA are making a return close to 10% and can borrow at close to 5, then a buy back makes huge sense and this will benefit the shareholders in 2 ways. It will increase EPS for those remaining on the register and the cost of the cancelled shares is very low.

.....but will it turn Turners from a unloved market pariah to a stock punters will love?

[blackcap]

.....but will it turn Turners from a unloved market pariah to a stock punters will love?

Haha the million dollar question. I have my doubts having seen the trading activity lately and relentless selling. If TRA can have an ok year and not have the 10% slippage that will re-rate the stock. But till such time the market may be wary what is in stock for FY 19!

That is a short term prediction. Long term I will be holding these for some time for the quarterly dividend and (hopefully) increasing capital gains too.

[percy]

Well said BP. That was my initial thoughts too. if TRA are making a return close to 10% and can borrow at close to 5, then a buy back makes huge sense and this will benefit the shareholders in 2 ways. It will increase EPS for those remaining on the register and the cost of the cancelled shares is very low.

Agreed............................................ .......

[BlackPeter]

.....but will it turn Turners from a unloved market pariah to a stock punters will love?

Shortterm maybe not - but does this matter for longterm investors?

As long as earnings are healthy and EPS go up ... SP will follow at some stage.

Isn't it you reminding us regularly of this fact?

[percy]

Haha the million dollar question. I have my doubts having seen the trading activity lately and relentless selling. If TRA can have an ok year and not have the 10% slippage that will re-rate the stock. But till such time the market may be wary what is in stock for FY 19!

I often think of all the mistakes Mainfreight made on their very successful journey.
Yet their business strategy stayed in place.
I see Turners business strategy is on course,and with further proof it is working,the market will then rerate the stock.

[winner69]

Seeing what happened to the share price during the day on Friday makes that first trade at 255 look even weirder than it did at the time.

[Beagle]

Regarding the buy-back. Don't forget that in recent years the company has issued a LOT of new shares so it makes sense to mop up some of the disaffected shareholders and there must be quite a few of them with the SP where it is.

My opinion is that Turners needs to be more disciplined with where they allocate their capital to get the best returns and endless issues of new shares to fuel growth doesn't work unless its eps accretive. Buy-back will help them be more focused on being more selective with capital works projects...which is a good thing in my opinion.

[minimoke]

Seeing what happened to the share price during the day on Friday makes that first trade at 255 look even weirder than it did at the time.
Lets see if todays $2.55 start makes a difference.

[winner69]

No buy back notices from Turners yet

[minimoke]

No buy back notices from Turners yetAt $2.50 - $2.55 I would have thought TRA would see this as cheap as chips and buying up large. They must be waiting for the SP to fall further.

[percy]

At $2.50 - $2.55 I would have thought TRA would see this as cheap as chips and buying up large. They must be waiting for the SP to fall further.

You could well be right.?

[couta1]

At $2.50 - $2.55 I would have thought TRA would see this as cheap as chips and buying up large. They must be waiting for the SP to fall further. There you go 38k at $2.50, bye bye the first few reef fish.

[trader_jackson]

Should be buying again today... back to 3 buck in no time some say

[alex f]

Baker bought 100,000 @2.57 last week, right at the bottom.

[alex f]

There have been more repos being auctioned in Wellington, which could be a worry, as they maybe MTF cars . https://www.turners.co.nz/Cars/Used-Cars-for-Sale/mercedes-benz/c300/18324052

[trader_jackson]

Alistair buying more as well, $2.50 ish surely the bottom, onwards and upwards to $3 by Christmas.
So if 'everyone' is buying, who is selling?

[winner69]

Alistair buying more as well, $2.50 ish surely the bottom, onwards and upwards to $3 by Christmas.
So if 'everyone' is buying, who is selling?

besides the buy back, directors and the likes of beagle et al buying still doesn’t appear much interest from anybody else does there

[Marilyn Munroe]

Further to my posts about the used v new car markets elbowing each other for customer attention Nissan are now offering no deposit finance at 1.9% with a payment holiday until April.

Those whose aim is to provide finance for profit must be struggling against others who regard finance as a cost of sale.

Boop boop de do
Marilyn

[minimoke]

There you go 38k at $2.50, bye bye the first few reef fish.0.0426% shares bought. Only UP TO 4.957% more to go.

[winner69]

0.0426% shares bought. Only UP TO 4.957% more to go.

I’ve never seen so much excitment / hype over a share buyback before

Desperate measures by the company to appease shareholders and ‘investors’ are loving it

Can’t be that bad eh.

[BlackCross]

Certainly there seems to be by some a concert-ed effort to pump the shares higher.

[Beagle]

Further to my posts about the used v new car markets elbowing each other for customer attention Nissan are now offering no deposit finance at 1.9% with a payment holiday until April.

Those whose aim is to provide finance for profit must be struggling against others who regard finance as a cost of sale.

Boop boop de do
Marilyn
Attractive finance for those that can afford the monthly payments. Nissan don't have a lot of low priced product and their terms are over 3 years so the payments will be steep.
I continue to believe the likes of Suzuki with their compact cars at around $20K, plus or minus a bit depending on model and Mazda with their Mazda 2 priced at a similar level who are both offering no deposit 5 year finance at just 3.9% and 5 years manufacturer warranty and taking into account the extra fuel efficiency of these sort of vehicles which is very much on the mind of consumers these days...these are the sort of vehicles that may be sucking some wind out of the sails of the second hand market because when you look at the whole deal, the cost to finance and operate something like this is probably cheaper than a running a bigger sized second hand vehicle in the $15,000 range. I know I am comparing apples and oranges here but it would appear at least some consumers may be asking why bother buying a used car ? Do I really need the extra size of a bigger second hand vehicle with all its higher running costs ? Why not just buy a brand new small car instead with all the assurance of long factory warranty, no deposit super cheap finance, less maintenance, fuel e.t.c.

[percy]

Certainly there seems to be by some a concert-ed effort to pump the shares higher.
As per usual in any market, the buyers see the directors succeeding with their strategy,while sellers think they will fail.

[percy]

Further to my posts about the used v new car markets elbowing each other for customer attention Nissan are now offering no deposit finance at 1.9% with a payment holiday until April.

Those whose aim is to provide finance for profit must be struggling against others who regard finance as a cost of sale.

Boop boop de do
Marilyn

Any idea who is behind Nissan Finance.?
It used to be HGH but for some reason I think it is now UDC.

[clearasmud]

Or if you are really smart buy that low km as new 4 year old small car privately for 60% off new price. (as I did this year)

[Snoopy]

I continue to believe the likes of Suzuki with their compact cars at around $20K, plus or minus a bit depending on model and Mazda with their Mazda 2 priced at a similar level who are both offering no deposit 5 year finance at just 3.9% and 5 years manufacturer warranty and taking into account the extra fuel efficiency of these sort of vehicles which is very much on the mind of consumers these days...these are the sort of vehicles that may be sucking some wind out of the sails of the second hand market because when you look at the whole deal, the cost to finance and operate something like this is probably cheaper than a running a bigger sized second hand vehicle in the $15,000 range.




Or if you are really smart buy that low km as new 4 year old small car privately for 60% off new price. (as I did this year)


I follow the argument that a new small car can stack up well against a higher priced late model used car for the consumer. I don't follow how this is negative for Turners though. In either case there will likely be a 'trade in' to deal with. So Turners are still likely to clip that ticket. Once the new car gets on sold, it doesn't disappear. It becomes a used car and potentially Turners are in the ticket clipping window again. What am I missing here?

SNOOPY

[minimoke]

There you go 38k at $2.50, bye bye the first few reef fish.Another 36,200 at $2.5483 yesterday/ Thats about 0.09% bought in total. Shes going to be a long slow process.

[couta1]

Another 36,200 at $2.5483 yesterday/ Thats about 0.09% bought in total. Shes going to be a long slow process. A slow termination of the reefies is fine by me.

[winner69]

Another 36,200 at $2.5483 yesterday/ Thats about 0.09% bought in total. Shes going to be a long slow process.

Got to March mini so plenty of time

And only 30% of the volume per day ....need more sellers to speed things up.

[minimoke]

Got to March mini so plenty of time

And only 30% of the volume per day ....need more sellers to speed things up.At 0.5% a day they need 100 trading days to get to 5%. So they need to up the buy rate. Or not get to 5%.

So how will the market react with a buy back of less than 5%

[RTM]

At 0.5% a day they need 100 trading days to get to 5%. So they need to up the buy rate. Or not get to 5%.

So how will the market react with a buy back of less than 5%

Although it may make sense from a financial engineering perspective to buy back shares (i.e. less shares on issue = less dividend to pay out, should be less than the interest on the money borrowed, increased EPS) I don't see this moving the share price needle by much more than 5-7%. What they need is more runs on the board in terms of numbers of cars sold, profitability leading to increased dividends etc. The normal solid business metricsl Progress is going to take a few reporting cycles to be sure of what is happening. In short....I am not expecting any miracles from the share buyback and will therefore continue to enjoy the current dividend with my fingers crossed.

[mfd]

Although it may make sense from a financial engineering perspective to buy back shares (i.e. less shares on issue = less dividend to pay out, should be less than the interest on the money borrowed, increased EPS) I don't see this moving the share price needle by much more than 5-7%. What they need is more runs on the board in terms of numbers of cars sold, profitability leading to increased dividends etc. The normal solid business metricsl Progress is going to take a few reporting cycles to be sure of what is happening. In short....I am not expecting any miracles from the share buyback and will therefore continue to enjoy the current dividend with my fingers crossed.

You'd have to subtract the extra interest on the debt they are taking on to pay for the buy back as well, so maybe we could rationally expect the share price to rise by 3% or so over the next few months from the buy back. Not a lot to get excited about.

[minimoke]

You'd have to subtract the extra interest on the debt they are taking on to pay for the buy back as well, so maybe we could rationally expect the share price to rise by 3% or so over the next few months from the buy back. Not a lot to get excited about.
Then that hardly seems to make teh exercise worthwhile. I reckon they are aiming for closer to $2.90 as fair market value

From the dividend announcement "

Chairman Grant Baker said: "The ongoing positive performance of Turners


Automotive Group allows for increasing distributions and we are targeting a


minimum FY19 full year dividend of 17 cents per share (up 10% on FY18). Based


on a share price of around $2.90, this represents an annualised yield of 5.9%


fully imputed."

[winner69]

At 0.5% a day they need 100 trading days to get to 5%. So they need to up the buy rate. Or not get to 5%.

So how will the market react with a buy back of less than 5%

Love the way they include this in the announcements — Buy back of Ordinary Shares for capital management purposes which the Board believe is in the best interests of the Company and its shareholders

Mini ...100 days eh ..like doing lines at school

If they repeat that often enough they might even believe it themselves .....and think it gives credence to their desperation

[couta1]

Love the way they include this in the announcements — Buy back of Ordinary Shares for capital management purposes which the Board believe is in the best interests of the Company and its shareholders

Mini ...100 days eh ..like doing lines at school

If they repeat that often enough they might even believe it themselves .....and think it gives credence to their desperation Must be time for you to sell out winner and stop torchuring yourself.

[BlackCross]

According to Reuters over the last month either one, or both, analysts covering the stock have dropped their rating of TRA.
They've gone from 1 x Buy and 1 x Outperform to 1 x Outperform and 1 x Hold.
I'm not sure how much influence they have in NZ but it possibly goes some way to explain the recent demise in the share price?

https://www.reuters.com/finance/stocks/analyst/TRA.NZ

As for calls for the brokers to get stuck in and boost the share price. That makes no real sense to long term holders. The more TRA they buy at the bottom the more shares they get for their money.

[winner69]

Deputy Chairman said this atbthe AGM —

As most will know both First NZ Capital and Craigs Investment Partners commenced analyst coverage of Turners in 2016 with regular in-depth analysis of our full year and interim results, providing guidance for their respective clients. As part of these regular market research reports, analysts include their forecast of future profits for 3 years out and a share price target for the next 12 months based on their analysis.

The most recent research reports following the release of our profit result to 31 March 2018, had 12 month target share prices of $3.29 and $3.35, so an average of $3.32. Forecast profit for this current year FY19 from the 2 reports were similarly close to each other with an average profit before tax of $34.5 million, just under the mid-point of our current guidance of between $34 million and $36 million. We would also expect actual earnings per share for FY19 to come close to assumptions included in these reports.

So why is our share price currently around $2.85, well below the price suggested by conventional analysis in these reports? And trading at a level at which the Board sees value – you will have seen directors and senior executives including Grant, Todd and myself recently buying at around $3.00 per share.


So brokers target about $3.20 — that implies a current share price of $2.90 to $3.00

And brokers earnings forecast for F19 were pretty much in line with Turners guidance $34m to $36m

Though not “official” possibility of earnings being lower than this .....have these brokers revised their forecasts and targets yet? Or living in hope?

Maybe, just maybe, fair and realistic share price is about $2.50 to $2.60

But good on them trying every trick in the book to boost the share price ...all the salesmen talk has failed to date

Might get to breakeven today

[winner69]

Whoops ...I see on marketscreener those 2 above mentioned analysts have lower their targets to $2.70 to $3.11 with a mean of $2.91

Obviously they just don’t get it

That’s some downgrade

[Marilyn Munroe]

. Once the new car gets on sold, it doesn't disappear. It becomes a used car and potentially Turners are in the ticket clipping window again. What am I missing here?

SNOOPY

The used car market is subject to supply and demand. If there is an influx to the used market of cars traded for new models and demand remains static the price of used cars will fall.

This effects Turners in two ways;

As an auctioneer whose income is dependent on the commission they earn on fall of hammer prices.

As a financier whose interest income will fall as a result of borrowers needing to borrow less.

Boop boop de do
Marilyn

[Joshuatree]

Yes.My broker (something with a c in it) has a 12month target price of $2.70 after results. estimated PBT lowered to$27.2 mill and EPS to 22cps for 2019:(

[Beagle]

Whoops ...I see on marketscreener those 2 above mentioned analysts have lower their targets to $2.70 to $3.11 with a mean of $2.91

Obviously they just don’t get it

That’s some downgrade

I think they do "get it"

Snoopy. In brief and in addition to what Marilyn Munroe has said , margin compression is what happens when there's excessive level's of second hand stock to shift and Percy looking at those broker forecasts of eps going out to FY20 there is nothing whatsoever in there that is going to make one iota of difference to seeing the SP go up.
I think its about fair value as a dividend yield hold at $2.50 and that's it. Chances of seeing $3 anytime soon are very slim in my opinion.

[minimoke]

Yes.My broker (something with a c in it) Funny what speed reading posts does. First glance i read " in i" as a "un". Brain must have processed "broker" first and drawn assumptions from that.

[McGinty]

Looks like we're stuck in the $2.50's for a while!

There's are a lot of sellers keen to move on (most of which aren't showing their hands as yet) and Turners on the buy side (but limiting themselves to only 30% of the weekly volume).

I doubt that they will even get close to half of the 4.474m shares mention in the buyback over the next 4 months, but that was probably never their plan.

[minimoke]

Ive lost track a bit - were TRA cum dividend yesterday?

[peat]

Ive lost track a bit - were TRA cum dividend yesterday?
I dont know the exact answer to your question but next ex date for div is 21/1/19


8 October 2018
Turners declares higher quarterly dividend and re-affirms guidance
The Board of Turners Automotive Group Limited (NZX: TRA) has declared the first quarterly dividend for the 2019 financial year of 4 cents per share, fully imputed, with a record date of 23 October 2018 and a payment date of 30 October 2018.
In addition, the Board advises that it expects to declare a further two quarterly fully imputed dividends of 4 cents per share in January and April 2019, followed by a fully imputed final dividend of 5 cents per share in July 2019.

[percy]

Ive lost track a bit - were TRA cum dividend yesterday?

TRA are trading cum div of 4cps payable 30th January 2019.The ex date is 21st January 2019.

[percy]

The used car market is subject to supply and demand. If there is an influx to the used market of cars traded for new models and demand remains static the price of used cars will fall.

This effects Turners in two ways;

As an auctioneer whose income is dependent on the commission they earn on fall of hammer prices.

As a financier whose interest income will fall as a result of borrowers needing to borrow less.

Boop boop de do
Marilyn

The cheaper cars become the more people buy them.

[winner69]

Bloody heck ..in spite of their attempt to prop up the share price the share price keeps going down

Seducing punters by promises of bigger dividends and telling every man and his dog that a share buyback is good use of capital isn’t working......can management do anything right?

Oh well ...tomorrow’s another day and it all might get better

[percy]

Bloody heck ..in spite of their attempt to prop up the share price the share price keeps going down

Seducing punters by promises of bigger dividends and telling every man and his dog that a share buyback is good use of capital isn’t working......can management do anything right?

Oh well ...tomorrow’s another day and it all might get better

Fantastic use of capital at these prices.

[winner69]

Fantastic use of capital at these prices.

........but failing in achieving the main objective of increasing the share price ....closing the gap to this much vaunted intrinsic value

Losers

[bull....]

obviously the broker didnt want to buy any today

[percy]

........but failing in achieving the main objective of increasing the share price ....closing the gap to this much vaunted intrinsic value

Losers

For me they are "real" winners.
FNZC are being astute spending TRA shareholders" capital very carefully by letting the sellers come to them.
Clever,working for long term shareholders like me.

[Beagle]

Craigs must know nothing putting a one year price target of only $2.70 on it eh Percy. Heck in two years you've assured us its going to double and be $5 so we should be half way there this time next year at $3.75 ! And Couta1's reversion theory he reckons that its worth at least $3.80 so this is just bewildering value at $2.48 isn't it !!
Time to back up the truck and "bet the ranch" !!!!!!
I reckon you should go "all in" on this one, how could you possibly lose !

[McGinty]

Looking at the TA, it looks as though they (FNZC) will have many more sellers coming to them very soon.

Basically every TRA shareholder is now what we would call a 'trapped holder' (hoping for the price to increase back to their purchase price), but for most chances are that it won't in this market.

Here's how I see it:

- Grant has lost it being quoted saying "This positive outlook supports the Share Buyback initiative” in the same announcement which is warning of a possible downgrade (Either that or he's talking fluff).
- The same Analysis forecast that Paul Byrnes mentioned at the AGM have dropped their target price by 10 & 20%
- Directors may know about the business, but they don't know the first thing when it comes to understanding how market sentiment works (and how it can work against you)
- I would even question if the directors are any good at investing as they've failed to generate a positive return in their own TRA holdings (but we know they can certainly trough)
- TA wise (due to the trapped holders) it will take ages (possibly years) for TRA to hit $3.30 again.
- This buyback won't hold up the price if it's limited to just 30% of weekly volume.
- The buyback is the last defence of the SP by the directors (as a buyback has previously never been mentioned as a part of TRA's capital management)
- They will struggle to maintain the current dividend unless market conditions improve, so a yield play this may not be.

The lack of positive tone at the AGM is now under stood by us all, now we are sitting a further 10% out of pocket.

Red flags flying all over with this one (to be honest these flags came out in Aug and I failed to act on them).

Lessons come in many forms but at least with this one I'm happy in the knowledge that Grant and the boys are out of pocket more than me, and it may be worth keeping 1 share to attend next years AGM (for old times sake) as I think there will be some good fireworks if the SP stay's at these levels or lower.

Only sharing as others readers may find some points valuable. Rant over!

[Beagle]

There's no need to worry mate, just look at Percy's assurance posted on 30 November 2018.
I would not worry about the sp.
It will double.
May take two years.May take three years.
My only worry is they get taken over under $4.00 in the next or so.