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

[nztx]

it says something if in face of the blocks being sold down SP is still showing such resilience

Discl: Very happy Camper enjoying the thermals rising above TRA

[Ggcc]

Seems to be a slowing of interest on the buying of shares. Im still holding and I feel it may still rise a little more yet. Happy with the income stream and outlook for the company.

[Louloubell]

Seems to be a slowing of interest on the buying of shares. Im still holding and I feel it may still rise a little more yet. Happy with the income stream and outlook for the company.

The share price simply reflects reliable divvies and not much growth. I feel and hope it will go up too ��, but think this will not be the case.

Am happy to hold as you do, as there aren't any better buys atm

[LaserEyeKiwi]

Divi going into accounts at end of week - expect some reinvestment I imagine.

[sb9]

Divi going into accounts at end of week - expect some reinvestment I imagine.

Should be in eligible bank a/cs tomorrow.

[sb9]

Divvy just hit the bank a/c, thanks TRA :t_up:

[winner69]

Guy at Turners sees issues with the decarbonisation of NZ

https://amp.rnz.co.nz/article/a480b418-3430-4b76-9e7f-b48b32f677d7?__twitter_impression=true

[Beagle]

How are farmers using diesel utes capable of towing a 3.5 ton load going to cope ? What relatively affordable electric vehicle with a realistic range are they going to use ? Even if by some miracle we can socially engineer a situation where everyone can afford an electric vehicle if everyone in Auckland plugs into the electrical grid at night how is the grid going cope ?
I think a lot of these academics in their ivory towers are so divorced from the practical problems its beyond a joke.

That guy from Turners is only barely scratching the surface of the myriad of problems such a radical approach as banning ICE powered cars would cause.
Just plant a few hundred thousand extra hectares of pine trees and be done with this nonsense already.

https://www.stuff.co.nz/business/124110128/expect-car-prices-to-go-up-with-new-standards-motor-industry-association-says?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+2+F ebruary+2021

https://www.stuff.co.nz/opinion/114832273/jim-hubbard-cartoons

P.S. I like Turners shares...have them in my share competition as well and I'm not performing too shabbily there.

[LaserEyeKiwi]

How are farmers using diesel utes capable of towing a 3.5 ton load going to cope ? What relatively affordable electric vehicle with a realistic range are they going to use ? Even if by some miracle we can socially engineer a situation where everyone can afford an electric vehicle if everyone in Auckland plugs into the electrical grid at night how is the grid going cope ?
I think a lot of these academics in their ivory towers are so divorced from the practical problems its beyond a joke.

That guy from Turners is only barely scratching the surface of the myriad of problems such a radical approach as banning ICE powered cars would cause.
Just plant a few hundred thousand extra hectares of pine trees and be done with this nonsense already.

https://www.stuff.co.nz/business/124110128/expect-car-prices-to-go-up-with-new-standards-motor-industry-association-says?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+2+F ebruary+2021

https://www.stuff.co.nz/opinion/114832273/jim-hubbard-cartoons

P.S. I like Turners shares...have them in my share competition as well and I'm not performing too shabbily there.

It's actually out of NZs hands to some degree - Europe/UK has banned any sales of new ICE vehicles by 2030/2035 (varies depending on the country) as has China and many other countries with US not far behind. As such all the major auto companies have also ceased development of new ICE models and announced their expected end dates of ICE production coinciding with the EU phase out dates.

There will literally be no new ICE vehicles to buy (outside of industrial and perhaps some farm vehicle models - although even these may be hydrogen based) so NZ is going to have to transition to a EV infrastructure anyway.

As for strain on electricity supply, I don't think this will be an issue with load shifting (both utility scale and home batteries which will be cheap as chips by 2030) and most charging occurring during periods of low power use (overnight). Norway has already transitioned to majority EV sales if you want an idea of what NZ looks like in 5-10 years.

[Rawz]

I listened to this podcast yesterday and the guest was Cathie Wood from Ark Investment Funds. She was saying that batteries are exponentially getting better whilst also becoming cheaper. Much like computers. Basically she was saying in the not too distant future EVs are clearly going to be much cheaper than ICE vehicles and performance to boot.

Very disruptive technology that is rapidly changing. (The Ark Innovation ETF 1 year return is up 175% so she clearly knows her stuff).

She compared it to how the first genome sequencing was completed in early 2000's and took 13 years and $2b to complete. Now you can do it for $50 and it only takes a couple of hours. Exponential growth eh.

[peat]

is it really a Turners thread issue though

wont Turners just sell EV;s

[Beagle]

I listened to this podcast yesterday and the guest was Cathie Wood from Ark Investment Funds. She was saying that batteries are exponentially getting better whilst also becoming cheaper. Much like computers. Basically she was saying in the not too distant future EVs are clearly going to be much cheaper than ICE vehicles and performance to boot.

Very disruptive technology that is rapidly changing. (The Ark Innovation ETF 1 year return is up 175% so she clearly knows her stuff).

She compared it to how the first genome sequencing was completed in early 2000's and took 13 years and $2b to complete. Now you can do it for $50 and it only takes a couple of hours. Exponential growth eh.

People have been singing off this "song sheet" for a decade now since the first Nissan Leaf came out in 2011. There is no retail evidence in N.Z. in the last 10 years that economies of scale and cost reduction have generated any reduction in the price. A Nissan Leaf was $59,995 in 2011. They're still $59,995 in 2021. Hmmm...

Good point Peat...I think it ended up in here because the Turners guy had something to say about it.

[LaserEyeKiwi]

People have been singing off this "song sheet" for a decade now since the first Nissan Leaf came out in 2011. There is no retail evidence in N.Z. in the last 10 years that economies of scale and cost reduction have generated any reduction in the price. A Nissan Leaf was $59,995 in 2011. They're still $59,995 in 2021. Hmmm...

Good point Peat...I think it ended up in here because the Turners guy had something to say about it.

I wouldn't buy a leaf (next car will be a Tesla*), but at least the leaf has improved from 117km range in 2011 to 364km max range today (so the product has got a lot better, but not cheaper yet, as the market has demanded more range rather than cheaper prices so far).

(*The entry level "standard range" Tesla gets 500km)

[Beagle]

I wouldn't buy a leaf (next car will be a Tesla*), but at least the leaf has improved from 117km range in 2011 to 364km max range today (so the product has got a lot better, but not cheaper yet, as the market has demanded more range rather than cheaper prices so far).

(*The entry level "standard range" Tesla gets 500km)

Your previous point was a good one (vehicle manufacturers ceasing production by certain dates). I know the 62 Kw/hr Leaf has a longer range but the older tech 40 kw/hr (mutton dressed up as lamb ?) that Nissan N.Z. are retailing here is good for only 270 km's and is now actually $61,995. https://www.nissan.co.nz/vehicles/browse-range/leaf.html

I saw an interesting Youtube wherein someone tried towing a very modest caravan with a Tesla Model X and it absolutely destroyed the range. My point is that we're not seeing the retail price becoming affordable after a whole decade and there are no electric vehicle currently made within a suitable price point for rural use that can tow a 3.5 ton load which is what farmers need.

Anyway....we can carry on this discussion on the off market EV thread. https://www.sharetrader.co.nz/showthread.php?10936-Electric-Cars-have-we-reached-a-turning-point
(I still can't see the turning point nearly 4 years after posing the question).

[Biscuit]

..... Turners who will have a robust market for whatever vehicles are realistically priced for the foreseeable future.

Ofcourse, if we need to reduce emissions and if ICE-alternatives are not economical or practical, there must be some possibility that there will be no "realistically priced" vehicles for Turners to flog?

[iceman]

I wouldn't buy a leaf (next car will be a Tesla*), but at least the leaf has improved from 117km range in 2011 to 364km max range today (so the product has got a lot better, but not cheaper yet, as the market has demanded more range rather than cheaper prices so far).

(*The entry level "standard range" Tesla gets 500km)

Sorry to put this response on the TRA thread if it doesn't belong here, but I'm curious as why you've decided that your next car will be a Tesla. For the last 6 months I've been studying EVs to replace my PHEV later this year, including taking Tesla and others for a test drive. Tesla is now close to the bottom of my list !

[LaserEyeKiwi]

Sorry to put this response on the TRA thread if it doesn't belong here, but I'm curious as why you've decided that your next car will be a Tesla. For the last 6 months I've been studying EVs to replace my PHEV later this year, including taking Tesla and others for a test drive. Tesla is now close to the bottom of my list !

Range (they have the best range, and the best purchase price vs range ratio)
The Tesla supercharger network (good to have these high speed chargers available in addition to other charging soltuions)
Performance (they have the best performance and efficiency)
Depreciation (They have high resale value)
Safety (they have the best safety rating of any car available)
Servicing (as the most popular new EV sold in NZ, easier to get support)
Future optionality (the car being ready to potentially turn into a fully self driving vehicle with a future software update)

In saying all that I am waiting for the price to be corrected for the local market - a straight conversion of the US price to NZD price, plus GST, should see the model 3 start at $60k rather than the $75k price currently.

[iceman]

Range (they have the best range, and the best purchase price vs range ratio)
The Tesla supercharger network (good to have these high speed chargers available in addition to other charging soltuions)
Performance (they have the best performance and efficiency)
Depreciation (They have high resale value)
Safety (they have the best safety rating of any car available)
Servicing (as the most popular new EV sold in NZ, easier to get support)
Future optionality (the car being ready to potentially turn into a fully self driving vehicle with a future software update)

In saying all that I am waiting for the price to be corrected for the local market - a straight conversion of the US price to NZD price, plus GST, should see the model 3 start at $60k rather than the $75k price currently.

Thanks for your reply. Continue doing your homework. You may be surprised.

[HCR20]

I listened to this podcast yesterday and the guest was Cathie Wood from Ark Investment Funds. She was saying that batteries are exponentially getting better whilst also becoming cheaper. Much like computers. Basically she was saying in the not too distant future EVs are clearly going to be much cheaper than ICE vehicles and performance to boot.

Very disruptive technology that is rapidly changing. (The Ark Innovation ETF 1 year return is up 175% so she clearly knows her stuff).

She compared it to how the first genome sequencing was completed in early 2000's and took 13 years and $2b to complete. Now you can do it for $50 and it only takes a couple of hours. Exponential growth eh.

Yes but that is about technology and innovation driving behaviour change vs. change that is govt mandated. An important distinction IMO.

[Beagle]

Ofcourse, if we need to reduce emissions and if ICE-alternatives are not economical or practical, there must be some possibility that there will be no "realistically priced" vehicles for Turners to flog?

If the academic boffins in their ivory towers do actually convince the Govt to stop us importing any new ICE vehicle by say 2035 there will still be a mass market for second hand ICE vehicles well into the 2050's and there's always going to be a big market for used vehicles in N.Z. of whatever type of energy propels them as used cars is all the vast majority of Kiwi families can afford to buy. Turners are now the biggest and most trusted used vehicle retailer and have a very bright future in my opinion. I am forecasting fully imputed quarterly dividends of 5 cps (20 cps per annum going forward, 27.78 cps gross incl of imputation credits), which gives a forecast gross yield of 8.55% @ $3.25.

[Biscuit]

If the academic boffins in their ivory towers ......

Can you actually name an academic study you disagree with?

[LaserEyeKiwi]

If the academic boffins in their ivory towers do actually convince the Govt to stop us importing any new ICE vehicle by say 2035 there will still be a mass market for second hand ICE vehicles well into the 2050's and there's always going to be a big market for used vehicles in N.Z. of whatever type of energy propels them as used cars is all the vast majority of Kiwi families can afford to buy. Turners are now the biggest and most trusted used vehicle retailer and have a very bright future in my opinion. I am forecasting fully imputed quarterly dividends of 5 cps (20 cps per annum going forward, 27.78 cps gross incl of imputation credits), which gives a forecast gross yield of 8.55% @ $3.25.

I agree that turners will do well regardless of whether they are selling ICE or EV cars. I think the concern about people who buy sub-$10,000 cars not being able to afford 2nd hand EVs in the $10k-20k range will work itself out (to tuners benefit) as it quickly becomes apparent that the extra cost of buying the 2nd hand EV is more that made up for by the reduced fuel & servicing costs. In other words if you are saving thousands of dollars a year on running costs, then it works out cheaper to get a bigger auto loan to pay for the EV - and when its time to trade in again you have a more valuable car.

I hope they go with the "feebate" option proposed last time, which provided a cash subsidy for both new & used low emission vehicles (and carve out an exception for farm vehicles etc until low emission options are available)

[Biscuit]

...... In other words if you are saving thousands of dollars a year on running costs, then it works out cheaper to get a bigger auto loan to pay for the EV - and when its time to trade in again you have a more valuable car.

That's a very good point.

[Beagle]

Can you actually name an academic study you disagree with?

https://www.nzherald.co.nz/the-country/news/fewer-cows-mass-evs-what-nz-must-do-to-hit-climate-targets/K6CGQD36LFLPJ6CRDGMVNGTWZ4/?ref=readmore

My point is quite simple. We have seen no evidence whatsoever in the last 10 years of the much touted theory that mass production of EV's will bring the price down.
They remain vastly higher than their ICE powered comparative vehicle. Forcing people to adopt EV's on all the available tangible evidence today is going to cause a lot of hardship to N.Z. families.

I have run the numbers on EV's and they don't work on a cost benefit analysis, nowhere even remotely close yet. People are buying EV's at the moment, in my opinion, mainly to make a "statement".
Planting a whole lot of trees would make a more enduring statement with much more enduring effect and at a tiny fraction of the price. Those with hundreds of trees on their properties already are well entitled to think they're already doing their bit, (in my opinion), which is where I am coming from.

Anyway...perhaps lets get back to Turners and that wonderful 8.55% gross forecast yield.

Here's a good place to continue the discussion on EV's if anyone wants to keep talking about them https://www.sharetrader.co.nz/showthread.php?10936-Electric-Cars-have-we-reached-a-turning-point or global warming if that's your thing https://www.sharetrader.co.nz/showthread.php?6726-quot-Global-Warming-quot

[Antipodean]

The faster that EV's are taken up in NZ, the sooner the government will need to consider starting and/or expanding RUC's for EV's. They are already scheduled to be incurred from end of this year (may be extended again though?), but make sure to consider that into running costs in any case if you want to be fully prepared.

One additional point to consider is insurance. Many EV's, particularly the higher end Tesla and iPace etc. are likely to be premium loaded compared to similarly costed ICE vehicles. As the replaceable parts are typically both harder to find and more expensive that their counterparts. Not too mention all the extra electronic goodies that are distributed throughout the chassis. This leads to both higher claim costs in general, and a higher likelihood of total loss.

Seen quite a few EV's on the Turners lot when I was looking for a vehicle last year. At that point for me the sums didn't match up and a ICE vehicle was selected, but don't see much difference for Turners if they move with NZ and stock all the flavours of EV's based on demand. Regardless of what pushes it forward, NZ needs individual point to point transport for the foreseeable future IMO. Our dispersed mass transit and wide population distribution just isn't ready for alternatives.

[Biscuit]

Regardless of what pushes it forward, NZ needs individual point to point transport for the foreseeable future IMO. Our dispersed mass transit and wide population distribution just isn't ready for alternatives.

I hold shares in TRA and also have used them to buy an old banger for one of my offspring and they a good company IMHO. You may be right about the immediate future but there is clearly disruption coming to transportation at a rapid rate. The combination of autonomous vehicles and electric vehicles is likely going to provide a vastly cheaper transportation option than personal vehicle ownership for many people.

[Rawz]

I hold shares in TRA and also have used them to buy an old banger for one of my offspring and they a good company IMHO. You may be right about the immediate future but there is clearly disruption coming to transportation at a rapid rate. The combination of autonomous vehicles and electric vehicles is likely going to provide a vastly cheaper transportation option than personal vehicle ownership for many people.

I agree and I would like/hope Turners are the ones to own the fleet of autonomous vehicles, or ride share vehicles when this kicks in many many years down the track.

[Biscuit]

I agree and I would like/hope Turners are the ones to own the fleet of autonomous vehicles, or ride share vehicles when this kicks in many many years down the track.

Much more likely Tesla and maybe not that many years down the track.

[sb9]

Referencing to CMO's trading update today, should add further strength to TRA's earlier profit upgrade and may even see another upgraded guidance from them.

[Beau]

Trading back down below where it was prior to upgrade announcement, CMO trading update doesn’t appear to give any strength to TRA.

[Rawz]

Trading back down below where it was prior to upgrade announcement, CMO trading update doesn’t appear to give any strength to TRA.

No worries. Trading just above a 10 p/e and dividend yield just over 7% at current share price. In today's low yield environment you can't go wrong. Salt still selling down? For every seller is a buyer..

[Beau]

No worries. Trading just above a 10 p/e and dividend yield just over 7% at current share price. In today's low yield environment you can't go wrong. Salt still selling down? For every seller is a buyer..
My thoughts exactly, with all these extra returnees coming home most need a car and not all in a position to buy new. Got to be good extra business for Turners.

[Baa_Baa]

No worries. Trading just above a 10 p/e and dividend yield just over 7% at current share price. In today's low yield environment you can't go wrong. Salt still selling down? For every seller is a buyer..

Why would salt exit, or sell down, if they thought they could make an upside from here?

[Ggcc]

Why would salt exit, or sell down, if they thought they could make an upside from here?
They might see more upside in other investments. OCA, HGH or ATM or something else........ Who knows, just keep buying haha.. Not financial advice and DYOR

[Rawz]

Why would salt exit, or sell down, if they thought they could make an upside from here?

Everyone has a reason. You can look at any well performing share like MFT, RYM, FPH etc over the last 10 years and ask why did anyone sell.. yet $millions worth of shares sell (and buy) each day, month, year.

[Baa_Baa]

They might see more upside in other investments. OCA, HGH or ATM or something else........ Who knows, just keep buying haha.. Not financial advice and DYOR

Maybe, who knows, but don’t ignore the money imo. Follow it but don’t ignore it. What the funds do is dyor, watch it

Reef fish feed off the detritus of the apex predators, they circle out of range of the large teeth and pickup the scraps left behind.

When the apex predators move to a different target, take notice.

Just saying

[sb9]

Seems as though the fund (whoever that's selling) is in a hurry to dump their holdings at any price.

[BlackPeter]

Maybe, who knows, but don’t ignore the money imo. Follow it but don’t ignore it. What the funds do is dyor, watch it

Reef fish feed off the detritus of the apex predators, they circle out of range of the large teeth and pickup the scraps left behind.

When the apex predators move to a different target, take notice.

Just saying


Seems as though the fund (whoever that's selling) is in a hurry to dump their holdings at any price.

Worthwhile comments.

We should not forget that it is hardly possible for a fund to sell a larger holding on the down leg (because this would crash an already weakened SP). The only sensible way for them to dispose a large holding is on the way up (obviously - as close to the peak as possible :):

How much did the TRA board say their share is worth (while it was dropping)? I think we exceeded this number already ...

[winner69]

Worthwhile comments.

We should not forget that it is hardly possible for a fund to sell a larger holding on the down leg (because this would crash an already weakened SP). The only sensible way for them to dispose a large holding is on the way up (obviously - as close to the peak as possible :):

How much did the TRA board say their share is worth (while it was dropping)? I think we exceeded this number already ...

They kept telling us a few years ago the shares were worth in excess of $3 and the directors were buying at the price

Allow for a couple years of improved performance and the current ‘lowest interest rates ever’ (or whatever the popular phrase is) surely that $3 must be $4 by now.

Company buyback was around $2.50/$2.70 I think (maybe lower?)

[Beagle]

Shares seem very sound value to me. Compelling metrics, strong tailwinds in the sector and if they can pay 20 cps fully imputed next year that's a forecast FY22 gross yield of 8.8% at $3.15 with the bonus of quarterly dividend payments. I'm a happy holder.

Based on the mid point of their FY21 forecast that's ~ 29 cps share so FY21 PE is just 10.9 !

[BlackPeter]

Shares seem very sound value to me. Compelling metrics, strong tailwinds in the sector and if they can pay 20 cps fully imputed next year that's a forecast FY22 gross yield of 8.8% at $3.15 with the bonus of quarterly dividend payments. I'm a happy holder.

Based on the mid point of their FY21 forecast that's ~ 29 cps share so FY21 PE is just 10.9 !

You are right - the PE looks compelling, assuming the earnings are sustainable.

Question is - are they, and for how long?

[winner69]

Beagle - you forgot about the $4m/$5m cost savings - to reset the cost base or something

I reckon there will be a profit upgrade in near future

[Beagle]

You are right - the PE looks compelling, assuming the earnings are sustainable.

Question is - are they, and for how long?

Good question and I think Winner has reminded us of a very salient point regarding that below. For my money I see extremely low interest rates persisting for many years, a recovering economy, high level's of demand for personal transportation (as opposed to public transport) and I think Turners advertising with "Ollie" hits the mark very nicely. https://www.youtube.com/watch?v=pfKxektzbFA
I think they can grow the Turners brand.


Beagle - you forgot about the $4m/$5m cost savings - to reset the cost base or something

I reckon there will be a profit upgrade in near future
Excellent point looking in to FY22 and beyond and yes, another profit upgrade wouldn't entirely surprise me.

[LaserEyeKiwi]

Worth checking out the latest earnings report for anyone on the fence about Turners and whether the earnings are sustainable. They have diversified their revenue sources a lot over the last few years, much more than just selling used cars now with stable recurring earnings coming from their Finance, Insurance and credit management operations.

[Rawz]

Beagle - you forgot about the $4m/$5m cost savings - to reset the cost base or something

I reckon there will be a profit upgrade in near future

Yes they have left that big mammoth building in Penrose and now have smaller yards with what look like temporary/ quick build office buildings on it. Similar story with when they had that big building next to the motorway on the North Shore (though I think that building was exited a little while back now).

The rents on these smaller yards must be 20% of what they were paying. And now that I think about it more yard space, to sell more cars..

[BlackPeter]

Worth checking out the latest earnings report for anyone on the fence about Turners and whether the earnings are sustainable. They have diversified their revenue sources a lot over the last few years, much more than just selling used cars now with stable recurring earnings coming from their Finance, Insurance and credit management operations.

I didn't went back through various reports - but from memory - TRA was always a Finance and Insurance company which happened to sell as well some preloved cars (with focus on making money with insuring and financing them). Don't forget - this was Dorchester Pacific which happened to buy Turners Auctions.

Are you sure that the income ratio between these areas did significantly shift?

Just to clarify my position: I used to hold TRA and was quite excited about their past strategy to be a one stop shop for car buyers. Well, we know what happened to that ... and at the moment I am not quite sure what their long term strategy is. Finance will be good as long as interest rates and unemployment rates are low. My crystal ball is cloudy, but I have never seen these two parameters being low for ever ...

Ah yes - and both Turners as well as Dorchester used to have good as well as (some very) bad days. Always easy to forget the less pleasant things in the past ...

[wagwan]

Looking at this one, but do not currently hold

Anyone have thoughts or opinions on:



Relatively high intangible asset base relative to equity? Based on FY21 half year numbers, NTA ~$64m ($0.74 / share), so fairly large premium

Recognise that by nature this share is a play at ability of business to turn stock and generate cash


Fairly high leverage, based on rough EBITDA of $68m for FY21, Debt : EBITDA is ~4.6x


Encouraging given business model that operating cashflow appears strong at ~$0.33 / share, and also comfortably covers dividends.

Significantly lower stock holding at FY21 half year encouraging as would suggest stock is turning quickly, which essentially is the crux of sales side of business.

Provisions revised down at Sept 2020 (6.1% of gross finance receivables) compared to March 2020 (7.0%)

Taking mid-point of revised NBAT guidance ($34m), less circa $9.5m for tax, NPAT $24.5m = 28.5 cps.

60-70% payout of NPBT corresponds with ~$22m (65%) = 25.6 cps dividend potentially (~8% yield)

[Rawz]

Looking at this one, but do not currently hold






Fairly high leverage, based on rough EBITDA of $68m for FY21, Debt : EBITDA is ~4.6x




Does that include their BNZ warehouse loan facility which is used to loan out via Turners Finance arm? By memory when i first did my research early 2020 the debt looked high but when you excluded the loan facility for their customer finance part and looked at what debt Turners actually had to run the business it was modest.

[Sideshow Bob]

As an aside, I know a car yard owner, who last time spoke to him:

- Getting stock was hard
- Sales were better than ever
- No negotiation on price, or had increased prices to allow for negotiation.
- Almost all sales on finance.

[BlackPeter]

As an aside, I know a car yard owner, who last time spoke to him:

- Getting stock was hard
- Sales were better than ever
- No negotiation on price, or had increased prices to allow for negotiation.
- Almost all sales on finance.

High car prices and almost all sales on finance sound like an outstanding combination for a finance company to run (as soon as times turn tough) into problems with bad debt.

Anyway, but short term certainly sounds good for a car dealer, and who knows - maybe the bad times will never return :):

[LaserEyeKiwi]

I didn't went back through various reports - but from memory - TRA was always a Finance and Insurance company which happened to sell as well some preloved cars (with focus on making money with insuring and financing them). Don't forget - this was Dorchester Pacific which happened to buy Turners Auctions.

Are you sure that the income ratio between these areas did significantly shift?

Just to clarify my position: I used to hold TRA and was quite excited about their past strategy to be a one stop shop for car buyers. Well, we know what happened to that ... and at the moment I am not quite sure what their long term strategy is. Finance will be good as long as interest rates and unemployment rates are low. My crystal ball is cloudy, but I have never seen these two parameters being low for ever ...

Ah yes - and both Turners as well as Dorchester used to have good as well as (some very) bad days. Always easy to forget the less pleasant things in the past ...

Last half year earnings:

Automotive Retail: $7.8 million profit (up 6%)
Finance: $7.6 million profit (up 18%)
Insurance: $4.5 million profit (up 74%)
Credit: $3 million profit (down 17%)

yes, the automotive retail operations feed the Finance & Insurance operations customers, but in the event of a downturn in automotive retail for whatever reason, the other segments don't have the same fall in earnings as their revenue is predominantly from recurring revenue from pre-existing customers.

[winner69]

Looking at this one, but do not currently hold

Anyone have thoughts or opinions on:



Relatively high intangible asset base relative to equity? Based on FY21 half year numbers, NTA ~$64m ($0.74 / share), so fairly large premium

Recognise that by nature this share is a play at ability of business to turn stock and generate cash


Fairly high leverage, based on rough EBITDA of $68m for FY21, Debt : EBITDA is ~4.6x


Encouraging given business model that operating cashflow appears strong at ~$0.33 / share, and also comfortably covers dividends.

Significantly lower stock holding at FY21 half year encouraging as would suggest stock is turning quickly, which essentially is the crux of sales side of business.

Provisions revised down at Sept 2020 (6.1% of gross finance receivables) compared to March 2020 (7.0%)

Taking mid-point of revised NBAT guidance ($34m), less circa $9.5m for tax, NPAT $24.5m = 28.5 cps.

60-70% payout of NPBT corresponds with ~$22m (65%) = 25.6 cps dividend potentially (~8% yield)

I wouldn’t worry about those intangibles ....without it they don’t have a business as mainly cost of ‘acquiring’ Turners and that credit division. The intangible value has stood the test of time so pretty OK

Currently trading at just over book value so not expensive.

Being a mix of finance and trading companies I don’t think debt:equity is a good view of leverage.

Equity ratio of finance/insurance divisions pretty respectable.

[Biscuit]

According to their annual report, they only make about $500 on a vehicle sale. Makes you wonder how small dealerships survive.

[Biscuit]

The board and leadership team looks the same as the way I buy trousers - find a couple that fit and look ok and buy a half a dozen the same - not much into diversity are they?

[Rawz]

The board and leadership team looks the same as the way I buy trousers - find a couple that fit and look ok and buy a half a dozen the same - not much into diversity are they?

LOL :lol::lol::lol:

[wagwan]

I wouldn’t worry about those intangibles ....without it they don’t have a business as mainly cost of ‘acquiring’ Turners and that credit division. The intangible value has stood the test of time so pretty OK

Currently trading at just over book value so not expensive.

Being a mix of finance and trading companies I don’t think debt:equity is a good view of leverage.

Equity ratio of finance/insurance divisions pretty respectable.


Thanks, makes sense re intangibles.

Leverage was from a Debt:EBITDA lens, not equity though? I'd think EBITDA a fairly suitable measure of leverage for at least the trading business.

[wagwan]

Does that include their BNZ warehouse loan facility which is used to loan out via Turners Finance arm? By memory when i first did my research early 2020 the debt looked high but when you excluded the loan facility for their customer finance part and looked at what debt Turners actually had to run the business it was modest.

Good point, will look into

[BlackPeter]

Last half year earnings:

Automotive Retail: $7.8 million profit (up 6%)
Finance: $7.6 million profit (up 18%)
Insurance: $4.5 million profit (up 74%)
Credit: $3 million profit (down 17%)

yes, the automotive retail operations feed the Finance & Insurance operations customers, but in the event of a downturn in automotive retail for whatever reason, the other segments don't have the same fall in earnings as their revenue is predominantly from recurring revenue from pre-existing customers.

So - automotive retail pays roughly 1/3 of the earnings, finance pays roughly one third and the reminder pays the balance. This is as it used to be in TRA (and TNR before that) since I can remember. No changes - nothing got safer, less safe or more diversified.

I would not worry about loss of earnings in the automotive sector. The thing to worry about would be increasing unemployment / interest rates (turning into bad debts) or the board deciding to speculate with investing shareholder funds into new business or going overseas.

BTW - how is this recently acquired car rental business going?

[Grimy]

Not confirmed, but NZAI -New Zealand Automotive Investments, who own 2 Cheap Cars (who import about 8% of all used cars) tipped for a NZX listing.

[sb9]

Not confirmed, but NZAI -New Zealand Automotive Investments, who own 2 Cheap Cars (who import about 8% of all used cars) tipped for a NZX listing.

You're right..

https://www.nzx.com/announcements/367756

Nature of Business: NZ Automotive Investments (NZAI) is an integrated used automotive group operating throughout New Zealand via two divisions: Automotive Retail and Vehicle Finance. The company’s purpose is to help Kiwis afford great cars. Operating under the “2 Cheap Cars” brand, its Automotive Retail company is a major used vehicle seller in New Zealand with 12 dealerships across the country. NZAI’s Vehicle Finance company operates under the “NZ Motor Finance” brand. It was established in 2019 to diversify earnings and provide a further growth opportunity for NZAI.
Directors: Karl Smith (Chair), Charles Bolt, Michele Kernahan, Tracy Rowsell, David (Yuseke) Sena, Eugene Williams
Details of Issue: The Quotation is solely a compliance listing. There is no public offer of NZ Automotive Investments Limited Ordinary Shares.
Quoted Securities at Date of Listing: 45,554,500
Reference Price: $1.30 NZD
Tick Size: $0.01
Auditors: Grant Thornton New Zealand
Solicitors: Lowndes Jordan
Registrar: Computershare Investor Services Limited
Settlement Status: NZCDC Settlement System
Profile Document Dated: At or before the day of listing, expected to be 25 February 2021
Expected Commencement of Trading on the NZX Main Board: Thursday, 25 February 2021, at 10:00am

[Getty]

The board and leadership team looks the same as the way I buy trousers - find a couple that fit and look ok and buy a half a dozen the same - not much into diversity are they?

Better than making token appointments, just to create false impression of diversity, for whatever use that may be.

[LaserEyeKiwi]

Not confirmed, but NZAI -New Zealand Automotive Investments, who own 2 Cheap Cars (who import about 8% of all used cars) tipped for a NZX listing.

Interesting, given these guys (2 cheap cars) are probably going to be hit fairly hard by new fuel efficiency standards for imports that the government is soon to implement. The impact being they won't be quite as cut price as they are currently which means the pricing they target (the very bottom end of buyers) might disappear and merge into the slightly higher priced range. Good time for them to cash out to some degree.

[percy]

https://www.nzx.com/announcements/367756

[Rawz]

Not confirmed, but NZAI -New Zealand Automotive Investments, who own 2 Cheap Cars (who import about 8% of all used cars) tipped for a NZX listing.

Honestly the 2Cheap Cars brand is mud. Compared to Turners which is diamonds.
The reason 2Cheap Cars did their own finance in the end is because UDC Finance and others blocked them using their dealer finance solutions due to the potential reputational risk.

They have their own place in the market catering to different demographics.

[Getty]

https://www.nzx.com/announcements/367756

mmm, looks like they have a diverse board.

They will do well because of that, wont they?

[percy]

mmm, looks like they have a diverse board.

They will do well because of that, wont they?

Only if they are also large shareholders,otherwise it is luck of the draw,in my opinion .

[percy]

Honestly the 2Cheap Cars brand is mud. Compared to Turners which is diamonds.
The reason 2Cheap Cars did their own finance in the end is because UDC Finance and others blocked them using their dealer finance solutions due to the potential reputational risk.

They have their own place in the market catering to different demographics.

I share your view/comments.

[Nor]

The board and leadership team looks the same as the way I buy trousers - find a couple that fit and look ok and buy a half a dozen the same - not much into diversity are they?

Interesting the way women want equal representation on boards but aren't interested in the dirty work that makes the business tick. Nearly all men there.

[Biscuit]

Interesting the way women want equal representation on boards but aren't interested in the dirty work that makes the business tick. Nearly all men there.

In NZ apparently 40% of car sales people are women (bit surprising that, as I don't think I've ever met one) - maybe they are just out the back making the coffee?

https://www.payscale.com/research/NZ/Job=Automotive_Retail_Salesperson/Salary

[Nor]

In NZ apparently 40% of car sales people are women (bit surprising that, as I don't think I've ever met one) - maybe they are just out the back making the coffee?

https://www.payscale.com/research/NZ/Job=Automotive_Retail_Salesperson/Salary

Board make up should reflect workforce make up?

[Biscuit]

Board make up should reflect workforce make up?

I don't think so. Sorry if I got that wrong but I thought that is what your previous comment implied?

As far as I am concerned they are free to have whoever they think is best on their board of course. If though, you end up with everyone being white males it suggests that perhaps you did not have a completely unbiased selection process given that does not reflect the population of New Zealand. Otherwise, maybe the applicants for those positions had biased perception of the company and self selected for white blokes. i don't know. Either way, it suggests that maybe they have an issue?

[Getty]

Heck.
They better chuck off a white bloke, who is otherwise doing a good job, and put in a dark female transgender, just to avoid any criticism ?

All this PC drama, in a country who was first to give women the vote, had 3 female prime ministers, legalised gay marriages, civil unions, first Transexual MP democratically elected in the world, brings in many Asian & brown immigrants, the district I live in has had 3 successive female police commanders, 3 current mayoresses, out of 4, numerous others up & down the country, etc, etc. but oh no, its TRA who are letting the side down!

Who do we have to apologise to??

[Rawz]

heck.
They better chuck off a white bloke, who is otherwise doing a good job, and put in a dark female transgender, just to avoid any criticism ?

All this pc drama, in a country who was first to give women the vote, had 3 female prime ministers, legalised gay marriages, civil unions, first transexual mp democratically elected in the world, brings in many asian & brown immigrants, the district i live in has had 3 successive female police commanders, etc, etc. But oh no, its tra who are letting the side down!

Who do we have to apologise to??

well said !!!

[Beagle]

Heck.
They better chuck off a white bloke, who is otherwise doing a good job, and put in a dark female transgender, just to avoid any criticism ?

All this PC drama, in a country who was first to give women the vote, had 3 female prime ministers, legalised gay marriages, civil unions, first Transexual MP democratically elected in the world, brings in many Asian & brown immigrants, the district I live in has had 3 successive female police commanders, etc, etc. but oh no, its TRA who are letting the side down!

Who do we have to apologise to??

Can you please translate that into Te Reo and several other languages for us ;)

[Getty]

Only after a karakia.

You know the rules, Beagle.

[Nor]

Can you please translate that into Te Reo and several other languages for us ;)
Don't forget white males created the modern world.

[Getty]

And someones trying to make them feel guilty for it.

Time to push back!

[Beau]

I thought this was Turners thread.

[Getty]

It is.

We're just pushing one or two broken down cars off the lot.

[Beau]

It is.

We're just pushing one or two broken down cars off the lot.

Make sure they go to Turners salvaged car division.

[Getty]

Your wish is our command.

Now, about your trade in...

[LaserEyeKiwi]

For what its worth, I do recall reading that company boards that have good diversity have strong correlation to better share price performance than those companies with non-diverse boards. In the end better stock price performance is what I care most about, so I"m all for diversity on boards of companies I own shares in..

[Nor]

Make sure they go to Turners salvaged car division.

Are 40% of the mechanics there female?

[Biscuit]

For what its worth, I do recall reading that company boards that have good diversity have strong correlation to better share price performance than those companies with non-diverse boards. In the end better stock price performance is what I care most about, so I"m all for diversity on boards of companies I own shares in..

Yes, I think it can be a pointer to conservative, out-of-date thinking. Potentially a drag on performance, especially in a consumer-focused company. If the board all have (and I'm not saying they necessarily do) old white man hang ups, its not necessarily the best thing for shareholders.

[Nor]

Yes, I think it can be a pointer to conservative, out-of-date thinking. Potentially a drag on performance, especially in a consumer-focused company. If the board all have (and I'm not saying they necessarily do) old white man hang ups, its not necessarily the best thing for shareholders.
Sounds like the sort of result studies set out to find and then voila! they find it.

[nztx]

So guesses on either a 4.0 or 5.0 for next payout ? ;)

[clearasmud]

They hinted at 5c

[nztx]

They hinted at 5c


Interesting .. that's usually the Jun/Jul job they did in past years ..

[Beagle]

They've steered towards 18 cps for the year and have paid a total of 8 cps in the first two divvies. I'll leave you good folks to do the maths on the next two fully imputed quarterly divvies :)

[Sideshow Bob]

From Business Desk's free email this morning. Follows on from NZ Herald article saying they were looking to rival Turners.

Car dealership NZAI goes public (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=9c520bfaf8&e=3b6f9185d3)Car dealership NZ Automotive Investments will go public next week in a direct listing on the NZX with a valuation of $60 million.
Board chair Karl Smith says NZAI is listing to support long-term growth, in particular to access capital in the future for expansion of its vehicle finance company.

Read on » (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=301c51615e&e=3b6f9185d3)


New Zealand Automotive Investments aiming to rival Turners, NZX listing tipped - NZ Herald (https://www.nzherald.co.nz/business/new-zealand-automotive-investments-aiming-to-rival-turners-nzx-listing-tipped/42MPPC3OU7DQALJFSWQDZLUXME/)

[Rawz]

Big turnover today. $2.2m.

[sb9]

Big turnover today. $2.2m.

Big crossing took place few minutes ago...



325
635,000
13:48
SP

[Getty]

Someone's updating.

[sb9]

It keeps getting better and better...:t_up::D

[Beau]

Picked up a few more the other day great work Turners in trying times.

[winner69]

PROFIT UPGRADE

Modest lot - they only said update

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/368871/342067.pdf

[sb9]

Picked up a few more the other day great work Turners in trying times.

Yeah, you can say since COVID they've performed exceedingly better...

[sb9]

PROFIT UPGRADE

Modest lot - they only said update

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/368871/342067.pdf

Big thing to note is higher divvy of 6c, last time when they announced profit upgrade the euphoria took sp to 3.50 before drifting back to low 3s. Hopefully the seller (mostly Salt) will shut tap this time.

[winner69]

Yesterdays close 311 LOWER than the share price the day before the previous profit upgrade 19/1 (less than 2 months ago)

Hopefully this time the share price will stay up (assuming it will have a jump today)

[sb9]

As at last SSH disclosure, Salt still hold 6mln+ shares in their kitty. If their intention is still to reduce holding, we may see sp around current levels for a while yet.

[Beagle]

Is this the third profit upgrade ? Nice signal with the 6 cent quarterly dividend about the robustness of current operations. Seems they have rising confidence about FY22.
Lots to like but I agree that Salt will probably continue to rain on the parade for a while.

[BlackPeter]

Is this the third profit upgrade ? Nice signal with the 6 cent quarterly dividend about the robustness of current operations. Seems they have rising confidence about FY22.
Lots to like but I agree that Salt will probably continue to rain on the parade for a while.

... and who knows, maybe they even know what they are doing? Turners clearly had a great time thanks to Covid restrictions ... how much longer is the party going to last?

Big funds need to sell into an uptrend, and they better are done with the selling before the tide turns ...

[Rawz]

'At least $35m NPBT'. One would think they would leave room for some upside so say $36m NPBT.
$36m*0.72= $25.92m NPAT
$0.3030 EPS.
Current price this morning $3.29 after the bump = P/E 10.79

If the market re-rates them:

11 P/E= $3.33 sp
12 P/E= $3.64 sp
13 P/E= $3.94 sp
14 P/E= $4.24 sp

[Beagle]

Nice work Rawz. Does look cheap and with plenty of potential for more profit growth into the foreseeable future. I can foresee $40m next year just on the $4m in annual ongoing fixed cost savings they talked about in their last full presentation. 20 cps fully imputed annual dividend next year definitely on the cards.

[Beagle]

... and who knows, maybe they even know what they are doing? Turners clearly had a great time thanks to Covid restrictions ... how much longer is the party going to last?

Big funds need to sell into an uptrend, and they better are done with the selling before the tide turns ...

2-3 years of global supply chain problems in the new car industry in my opinion provides strong tailwinds for the used car industry.

[sb9]

'At least $35m NPBT'. One would think they would leave room for some upside so say $36m NPBT.
$36m*0.72= $25.92m NPAT
$0.3030 EPS.
Current price this morning $3.29 after the bump = P/E 10.79

If the market re-rates them:

11 P/E= $3.33 sp
12 P/E= $3.64 sp
13 P/E= $3.94 sp
14 P/E= $4.24 sp

You hit the nail on its head, yes they seem to be holding back on further upside just to be on safe side. As it stands currently, there's no reason why this should not trade at least around $3.50+.

[BlackPeter]

2-3 years of global supply chain problems in the new car industry in my opinion provides strong tailwinds for the used car industry.

Just reading the recent Daimler annual report. In the outlook section they say that while they expect still some supply chain problems in Q1, they think that the industry will catch up well before the end of 2021:); This - by the way is quite compatible with what Infineon (one of the big semiconductor companies) are saying ...

I don't mind either way, but I am not sure whether I would derive from that many happy years for second hand dealerships ...

Discl: holding DAI and INF;

[Beagle]

Plenty of other favorable indicators in their recent presentation if you're interested mate. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/363850/335937.pdf

[BlackPeter]

Plenty of other favorable indicators in their recent presentation if you're interested mate. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/363850/335937.pdf

Yeah I have seen that. Obviously - one needs to moderate these positive factors a bit. From memory - their 2018 and 2019 reports didn't look that ugly either - quite different to their SP development at that time.

But I think it is fair to say that they are not the only company which does not really know the future, and hey - rattling the cage and emphasis on the positive is every boards business, isn't it? :):

Just one other thing - if you look at their revenue development (slide 6, top right) ... it would not be unimaginable that 2019 was the peak, wouldn't it? BTW - this would be consistent with the analyst predictions in marketscreener (not that analyst predictions are more often right than wrong, but hey ...).

Of course - I don't know either how they will develop, but I think it is fair to say that they are currently closer to the next top than they are to the next bottom :):

[BlackPeter]

... BTW - did you notice that their NTA is quite minute? That's what high liabilities and high intangibles do to one's balance sheet. I know, this is how finance companies operate, but still - will their revenues still look that flash when interest rates go up?

[winner69]

... BTW - did you notice that their NTA is quite minute? That's what high liabilities and high intangibles do to one's balance sheet. I know, this is how finance companies operate, but still - will their revenues still look that flash when interest rates go up?

I repeat - most of Intangibles a result of acquiring Turners

No Turners no business

[percy]

... BTW - did you notice that their NTA is quite minute? That's what high liabilities and high intangibles do to one's balance sheet. I know, this is how finance companies operate, but still - will their revenues still look that flash when interest rates go up?

When interest rates increase, lenders such as TRA and HGH see their profit increase , as does their NIMs.

[macduffy]

When interest rates increase, lenders such as TRA and HGH see their profit increase , as does their NIMs.

Very true. Ask the banks about it!

[sb9]

Like the way how quickly it goes XD on 17th and paid out on 30th, nice work Todd and team :t_up:

[LaserEyeKiwi]

Like the way how quickly it goes XD on 17th and paid out on 30th, nice work Todd and team :t_up:

Notable that it means they are still paying out 4 dividends this tax year ending March 31st, even after missing one last April (normally its an April dividend)

[sb9]

Notable that it means they are still paying out 4 dividends this tax year ending March 31st, even after missing one last April (normally its an April dividend)

Correct, nice turnaround.

Big month for me personally with fair few divvys hitting bank a/c over next couple of weeks.

[SCOTTY]

Great to see Grant Baker upping his stake by 350,000 shares for $1.16 mil. (Just over $3.31ps). Now holding 7.5% :)

[SCOTTY]

Great to see Grant Baker upping his stake by 350,000 shares for $1.16 mil. (Just over $3.31ps). Now holding 7.5% :)

[SCOTTY]

Great to see Grant Baker upping his stake by 350,000 shares for $1.16 mil. (Just over $3.31ps). Now holding 7.5% :)

[Beagle]

Buying in the lead up to the end of year announcement. Hmmm...me thinks they are serious about it being over $35m, well and truly over $35m by the look of it.
Did a small top up myself last week and another one this week.

[Beagle]

Buying in the lead up to the end of year announcement. Hmmm...me thinks they are serious about it being over $35m, well and truly over $35m by the look of it.
Did a small top up myself last week and another one this week.

[LaserEyeKiwi]

Removing the random intraday temporary spike to $3.55 from Jan 19th, TRA trading at annual highs today by the looks of it.

[winner69]

Good to see it on fire again --- Salt must have held it back after all

Share price hit 390 in 2017 ....so currently not even going somewhere it ain't been before ... that's good

Might see 4 bucks by next divie -- the one after the one we getting this week

[Rawz]

SP should be $3.60 in all fairness.
If they report a $37-$38m profit then $4 SP surely on the cards, based on a modest low teens P/E.
Ill still take $36m profit.

What should the P/E be for a company that has had multiple profit upgrades? Hmmm.
FY22 will see $40m profit minimum with the $4m cost savings?

BTW. Does anyone know what their finance and insurance penetration is for all the cars they sell?

[Beagle]

Added a few more this morning.

[winner69]

SP should be $3.60 in all fairness.
If they report a $37-$38m profit then $4 SP surely on the cards, based on a modest low teens P/E.
Ill still take $36m profit.

What should the P/E be for a company that has had multiple profit upgrades? Hmmm.
FY22 will see $40m profit minimum with the $4m cost savings?

BTW. Does anyone know what their finance and insurance penetration is for all the cars they sell?

Only $3.60

NPBT $36m is $26m after tax or 30 cents a share

Your $3.60 would be a PE of 12

Surely a minimum PE of 15 (and that's being miserable) - PE of 15 is share price of $4.50
[/U][/U]
And then there's that 18 cents divie - ie 25 cents gross.

Even on a 5% yield TRA deserves a share price of $5.00

So lets split the difference and say 'fair value' for TRA at the moment is $4.75 .....with a target of $5.30 in a years time

No wonder beagle is buying up big (few more is code for heaps more)

[mikelee]

if they can source cars cheaper than anyone else then should be a winner as prices seem to have climbed up steady during the pandemic, I won't be buying a car until next year the earliest

[Habits]

Only $3.60

NPBT $36m is $26m after tax or 30 cents a share

Your $3.60 would be a PE of 12

Surely a minimum PE of 15 (and that's being miserable) - PE of 15 is share price of $4.50
[/U][/U]
And then there's that 18 cents divie - ie 25 cents gross.

Even on a 5% yield TRA deserves a share price of $5.00

So lets split the difference and say 'fair value' for TRA at the moment is $4.75 .....with a target of $5.30 in a years time

No wonder beagle is buying up big (few more is code for heaps more)

Good analysis...

Maybe he bought a few thousand or more who knows... someone putting money down is always a good sign

[Habits]

Very weird how my above post duplicated

The site either runs fast (that is normal speed) or super super slow and thats in the space of a few minutes

I hope they can get a handle on the issues

[Rawz]

Only $3.60

NPBT $36m is $26m after tax or 30 cents a share

Your $3.60 would be a PE of 12

Surely a minimum PE of 15 (and that's being miserable) - PE of 15 is share price of $4.50
[/U][/U]
And then there's that 18 cents divie - ie 25 cents gross.

Even on a 5% yield TRA deserves a share price of $5.00

So lets split the difference and say 'fair value' for TRA at the moment is $4.75 .....with a target of $5.30 in a years time

No wonder beagle is buying up big (few more is code for heaps more)

I agree!!!!!

But I thought this would have raced to the $3.60-$4.00 with the last "at least $35m profit" announcement. Plus one of the directors purchased shares on market.
Mr Market takes us to $3.30 where Salt then puts up a wall. Then it sits around $3.15-$3.20... what a joke.

Glad we are out of that zone and seemingly heading to $4.

[Beagle]

I have freshly polished up my crystal ball and here's how I foresee it.
FY21 Profit well north of $35m as stated by the company, I have assumed $39m before tax which gives $28m after tax (at full company tax rate of 28%) on 85.5m shares = eps of 32.7 cps (approx. 20 cps in fully imputed dividends) I note the company had this to say about FY22 "
The combination of activity and annuity revenue businesses within the group continues to deliver improving results and provides further confidence about the FY22 year ahead".
FY22 - Full year's impact of tailwinds and momentum in the economy / sector / exchange rates / premium margins + $4m per annum in fixed cost savings = approx. $45m before tax = $32.4m after tax = eps of 38 cps.
I think a fair PE for FY22 is 13 so that suggests a target price one year hence of 13 x 38 = $4.94
At the mid point of their 60-70% dividend payout ratio fully imputed dividends could be as high as 65% x 38 cps = 24.7 cps next year which is 24.7 / 0.72 = 34.3 cps gross. That's just on a forecast FY22 gross yield of 10% on today's closing price of $3.46

[winner69]

Do we still support (with cash) Liam Lawson

Rate he’s going he will in a F1 car one day

[Habits]

I have freshly polished up my crystal ball and here's how I foresee it.
FY21 Profit well north of $35m as stated by the company, I have assumed $39m before tax which gives $28m after tax (at full company tax rate of 28%) on 85.5m shares = eps of 32.7 cps (approx. 20 cps in fully imputed dividends) I note the company had this to say about FY22 "
FY22 - Full year's impact of tailwinds and momentum in the economy / sector / exchange rates / premium margins + $4m per annum in fixed cost savings = approx. $45m before tax = $32.4m after tax = eps of 38 cps.
I think a fair PE for FY22 is 13 so that suggests a target price one year hence of 13 x 38 = $4.94
At the mid point of their 60-70% dividend payout ratio fully imputed dividends could be as high as 65% x 38 cps = 24.7 cps next year which is 24.7 / 0.72 = 34.3 cps gross. That's just on a forecast FY22 gross yield of 10% on today's closing price of $3.46

Be careful that Jacinda and Grant dont conspire against companies doing well and shareprices increasing... espectations will have to be tempered in fear of the govt big stick. On serious note Grant has been threatening the big stick against LL seeking to recover costs ... hmmm, he wont get away with that talk imo

[toddhunter]

Do we still support (with cash) Liam Lawson

Rate he’s going he will in a F1 car one day

Hi Winner69 ... yes Turners is still in the family of sponsors for Liam. We give a very modest amount to be associated with him and to assist in his push for becoming an F1 driver. He is a very impressive young guy and has had a great start to his F2 season. Cheers Todd

[sb9]

Thanks TRA for paying out another juicy and fattening divvy :t_up:

[LaserEyeKiwi]

FYI: Todd Hunter (TRA CEO) is going to be doing a live Q&A with sharesies "Lunch Money" show at 12.15pm today.

https://www.crowdcast.io/e/lunch-money-todd-hunter

[LaserEyeKiwi]

FYI: Todd Hunter (TRA CEO) is going to be doing a live Q&A with sharesies "Lunch Money" show at 12.15pm today.

https://www.crowdcast.io/e/lunch-money-todd-hunter

Starting now

[Habits]

Starting now

Thanks but watching MAFS

[peat]

awesome that Todd does these sessions....

not currently holding but want to be at the right price

[Rawz]

Todd says they end up losing money on 1 in every 4 cars they buy..
Todd says they are working on fixing that with better data.

Wow lots more money to be made once they reduce that number to 1 in 5, 1 in 10, none..

[peat]

Todd says they end up losing money on 1 in every 4 cars they buy..
Todd says they are working on fixing that with better data.

Wow lots more money to be made once they reduce that number to 1 in 5, 1 in 10, none..

crazy thought
how long till they can cost effectively scan a car and see all the irregularities (read worn parts) in the inner workings beyond eyes and ears....

[winner69]

crazy thought
how long till they can cost effectively scan a car and see all the irregularities (read worn parts) in the inner workings beyond eyes and ears....

...soon .... use high progressive co-efficient multiples:t_up:

[winner69]

Todd says they end up losing money on 1 in every 4 cars they buy..
Todd says they are working on fixing that with better data.

Wow lots more money to be made once they reduce that number to 1 in 5, 1 in 10, none..

Go through this thread oer the years you'll see many instances of fixing things that aren't right .... and no doubt learning from the experience and hopefully making more money

They are pretty good at learning from their mistakes

[winner69]

Todd's lunch time thing doesn't seem to have got sharsies people rushing in with buy orders

Price down from when he started selling

[Leftfield]

Todd's lunch time thing doesn't seem to have got sharsies people rushing in with buy orders

Price down ...

Not sure sharesies people like old fashioned cars Winner?? Electric scooters and ebikes more their flavour.

[LaserEyeKiwi]

I was a little annoyed they didn't ask one of the questions I submitted about any TRA intention of entering the Australian market (literally was the only question left to ask on the list)

[justakiwi]

Entirely dependent on whether one has funds available to invest. I watched it - no spare cash right now. But down the track .... probably will.


Todd's lunch time thing doesn't seem to have got sharsies people rushing in with buy orders

Price down from when he started selling

[tommy_d]

Not sure sharesies people like old fashioned cars Winner?? Electric scooters and ebikes more their flavour.
dunno about that. It's my second biggest holding, mostly bought at $1.63, average price paid now at $1.95.

[nztx]

dunno about that. It's my second biggest holding, mostly bought at $1.63, average price paid now at $1.95.


ditto in top 4 here too

[sb9]

Institutional investors must've liked what they heard and saw at this morning's presentation. 4 bucks isn't a bad target from hereon if one or two funds prepared to get some decent holding.

[sb9]

From the presentation docs y'day, two new locations confirmed Rotorua & Nelson. Buying depth looks very strong, 4 bucks could be in sight over medium term..

[LaserEyeKiwi]

From the presentation docs y'day, two new locations confirmed Rotorua & Nelson. Buying depth looks very strong, 4 bucks could be in sight over medium term..

Yeah I saw the map of locations first and was thinking "gee, they really need to address the top of the south island" and was very happy to see moments later the Nelson location announced.

Really interested to know whether they could launch in Australia as well.

[LaserEyeKiwi]

Trading at a 4 year high today! good times, congrats to management!

[Beau]

Yes great hear and see expansion plans coming together and relocating where needed all seems to be paying off and promising future ahead. Good team effort.

[sb9]

Bit of teaser set up on sell side...haven't seen this for TRA in a very long time.

[Rawz]

Yeah I saw the map of locations first and was thinking "gee, they really need to address the top of the south island" and was very happy to see moments later the Nelson location announced.

Really interested to know whether they could launch in Australia as well.

Would hate to see TRA expand into Australia. Would sell my shares straight away actually.
Lots of competition over their, it would take millions and millions of dollars in capital and would likely be a drag on eps for many years.

Countless NZ companies have burned a lot of cash in Aussie only to cut their losses after many years and return home. (Yes some manage to crack it)

TRA brand is super strong in NZ and lots of room to expand here.

[LaserEyeKiwi]

Would hate to see TRA expand into Australia. Would sell my shares straight away actually.
Lots of competition over their, it would take millions and millions of dollars in capital and would likely be a drag on eps for many years.

Countless NZ companies have burned a lot of cash in Aussie only to cut their losses after many years and return home. (Yes some manage to crack it)

TRA brand is super strong in NZ and lots of room to expand here.

Appreciate the opposing viewpoint there. They do have a small amount of Australian exposure in the credit side of the business, so maybe they could stick to a pure financial services attempt over there.

[BlackPeter]

Hmm - can't figure out why market screener prices some of TRA's parameters in USD?

https://www.marketscreener.com/quote/stock/TURNERS-AUTOMOTIVE-GROUP-20699914/consensus/

Anybody knows?

Anyway - analyst "consensus" is USD 2.88 - which is at todays Exchange rate NZD 3.99. The one and only analyst researching TRA calls them as well a "BUY". Well, I guess with only one analyst it was not that hard to reach a consensus. Full steam ahead ...

Discl: I don't believe in analysts ability to predict the future :):

[LaserEyeKiwi]

Hmm - can't figure out why market screener prices some of TRA's parameters in USD?

https://www.marketscreener.com/quote/stock/TURNERS-AUTOMOTIVE-GROUP-20699914/consensus/

Anybody knows?

Anyway - analyst "consensus" is USD 2.88 - which is at todays Exchange rate NZD 3.99. The one and only analyst researching TRA calls them as well a "BUY". Well, I guess with only one analyst it was not that hard to reach a consensus. Full steam ahead ...

Discl: I don't believe in analysts ability to predict the future :):

There is quite an absence of coverage for a lot of smaller NZ listed companies. I think it creates opportunities for anyone that can be bothered to look past the NZX50 index constituents and can be bothered to read an income statement.

[Rawz]

There is quite an absence of coverage for a lot of smaller NZ listed companies. I think it creates opportunities for anyone that can be bothered to look past the NZX50 index constituents and can be bothered to read an income statement.

I agree. The stocks ive made 200%+ gains in are MPG and MHJ. Then next top gains are from TRA and HLG. All four outside the NZX50 and often overlooked.

[Habits]

Company Announcement

7 May 2021

Turners FY21 Annual Results to be announced on 25 May 2021

Turners Automotive Group Limited (NZX: TRA) advises that it intends to
announce its full year results for the twelve months ended 31 March 2021 on
Tuesday 25 May 2021, prior to 9am NZST.


Let the speculation begin

[Getty]

Gentlemen, start your engines!

[Ggcc]

Gentlemen, start your engines!
Will it get to $4..... we may see some more upside

[Rawz]

Hoping to see $36M NPBT. Anything above that would be easy $4.20 SP

[Yoda]

Happy to be picking up 5% Div with what seems to be a low PE company . The SP seems to keep trucking along and reaching June 17 prices . It would be great to see the SP improve with all the changes they have made since then,
This has been a nice steady climber recently. It made this sort of climb in 2012 only to fall back 40% or so. Hoping this won't happen this time ..............

[IAK]

Love the new tv ad featuring Tina from Turners.

[Beagle]

Love the new tv ad featuring Tina from Turners.

Agreed...that is first class marketing, really, really good stuff !

[Beau]

Yes comes across very well like Turners results will do on the 25th.

[Baa_Baa]

Interesting that Turners decided not to participate in the CL8 (Carly) rights issue and cap raising. CL8 was again looking dismal after the consolidation $0.375, SP collapsed on a string on poor results to $0.08 (about 80% decline). I was thinking they might struggle to raise, but surprise, they issue rights ~$2m, shortfall placed ~$1.35m and follow-on placement ~$1.45m!! Total 60.5m shares and 20.2m options! Cornerstone investors took up their rights. Turners didn't though and are now diluted 48%, their 5m shares they bought for seven figure sums, from 8.84% to 4.59% = holding now only worth $400,000.

Not sure how the Turners Subscription business is going, seems a very slow start with only 45 cars available in Auckland, none in Wellington. Wonder if they're still taking this Carly subscription service seriously? Way more money in selling used cars I would think.

[LaserEyeKiwi]

Interesting that Turners decided not to participate in the CL8 (Carly) rights issue and cap raising. CL8 was again looking dismal after the consolidation $0.375, SP collapsed on a string on poor results to $0.08 (about 80% decline). I was thinking they might struggle to raise, but surprise, they issue rights ~$2m, shortfall placed ~$1.35m and follow-on placement ~$1.45m!! Total 60.5m shares and 20.2m options! Cornerstone investors took up their rights. Turners didn't though and are now diluted 48%, their 5m shares they bought for seven figure sums, from 8.84% to 4.59% = holding now only worth $400,000.

Not sure how the Turners Subscription business is going, seems a very slow start with only 45 cars available in Auckland, none in Wellington. Wonder if they're still taking this Carly subscription service seriously? Way more money in selling used cars I would think.

Seems awfully expensive - between $112-$260 a week subscription cost for quite old cars. Doesn't makes sense for anyone intending to use a car for longer than a few months.

[winner69]

Cazoo in the UK is an interesting company

Seems to do what Turners do and not much bigger (now) ...but call themselves a disruptor

They going to list on the Nasdaq (one of these SPAC things) with a valuation on GBP$5 billion

Just imagine if Turners was a $10 billion company

Here’s one media piece

https://www.standard.co.uk/business/cazoo-spac-shares-ipo-alex-chesterman-b935891.html

[Snoopy]

Cazoo in the UK is an interesting company

Seems to do what Turners do and not much bigger (now) ...but call themselves a disruptor

They going to list on the Nasdaq (one of these SPAC things) with a valuation on GBP$5 billion

Just imagine if Turners was a $10 billion company

Here’s one media piece

https://www.standard.co.uk/business/cazoo-spac-shares-ipo-alex-chesterman-b935891.html


Nice quote in that reference that I hadn't heard before

"Turnover is vanity, profit is sanity."

SNOOPY

[peat]

Nice quote in that reference that I hadn't heard before

"Turnover is vanity, profit is sanity."

SNOOPY

https://www.sharetrader.co.nz/showthread.php?1360-IFT-Infratil&p=885968&viewfull=1#post885968

I think this is what I was saying on IFT.

[Habits]

The FY results are out tomorrow morning.. these should be very good so I cant wait

[Yoda]

Lots of buyers just now. Somebody knows something maybe?

[Habits]

Lots of buyers just now. Somebody knows something maybe?

70k sought vs 9k for sale

[LaserEyeKiwi]

Nice little bump ahead of tomorrow’s likely good result.

increasingly seeing stories about lack of supply of new vehicles, which is golden for Turners.

[Beagle]

Looks like a leaky ship containing golden news tomorrow :D

[sb9]

MASSIVE RESULT...:t_up: BOOM

[LaserEyeKiwi]

1. We achieved 19% growth in normalised PBT in FY21...a step change in the business performance

2. Full year dividend at 20.0cps versus guidance of 18.0cps. Based on a share price of $3.75 this is a gross yield of 7.4% pa.

3. Our plan for growth* has been proven up and de-risked over the last three years:

- Building out an omni-channel experience in Auto Retail
- Auto Retail optimisation
- Targeting high quality lending growth in finance

4. FY22 has started well, with April-21 materially ahead of trading in April-19

5. Our target is for a further 31% increase in Underlying NPBT from FY21 to FY24

[Rawz]

Wow what a great result. EPS of 31.4. Lets slap a fair P/E ratio of 14 on it and call it a day at new share price of $4.40

[Mammoth]

Certainly glad I bought up some extra yesterday in amongst my WHS frenzy.

An excellent result and great forward prospects.

[Habits]

Wow what a great result. EPS of 31.4. Lets slap a fair P/E ratio of 14 on it and call it a day at new share price of $4.40

Its possible, current PE 12 so $4.40 is definitely achievable. Been looking for the result on ASB securities, still not showing which seems strange

[777]

Its possible, current PE 12 so $4.40 is definitely achievable. Been looking for the result on ASB securities, still not showing which seems strange

Just go to the NZX website.

[Beagle]

Very strong result and they are very bullish about the outlook for ongoing growth and are promising dividends will lift in line with growth in the years ahead. WOW !
Well done to Todd Hunter and the team, you've doing an awesome job !! Amazing that finance is a bigger contributor to net profit than automotive retail, fantastic job. They've really turned that division into a winner !
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/372761/346810.pdf

[Rawz]

Its possible, current PE 12 so $4.40 is definitely achievable. Been looking for the result on ASB securities, still not showing which seems strange

https://www.nzx.com/announcements/372761

[LaserEyeKiwi]

12536https://www.sharetrader.co.nz/blob:https://www.sharetrader.co.nz/57dd8c8c-9ff2-4fcf-a9f4-5b8f5900a84d

[winner69]

12536https://www.sharetrader.co.nz/blob:https://www.sharetrader.co.nz/57dd8c8c-9ff2-4fcf-a9f4-5b8f5900a84d

Enjoyed that post

[Beagle]

Clear message from market that shareholders want yield + growth supported from existing capital base - Really good that Todd engages with shareholders on here and listens to market feedback.

WOW - dividends expected to increase at 7.7% per annum and earnings at 9.5% per annum for the next 3 years.

I think we're headed to $5 a lot earlier than the roadmap suggests :t_up:

[winner69]

You sometimes make me laugh Beagle

Your love affair with Todd runs hot and cold .... from being seduced by his charm at a shareholder briefing .... thenn going off him and saying not so nice things about him when things weren't going that well .....to now it seems he is the best thing since sliced bread

Suppose it all depends on the share price etc ..... interesting topic the halo effect.

Please don't take offence - just an observation I've made over the years

Yes, great result .... probably good management and not luck ...and the halo has got its glow back.

[Beagle]

LOL no offence taken Winner. I was certainly pretty cross at Grant Baker not turning up to the annual meeting one year when I wanted to do some serious barking.
You've got to respect a CEO who has the gonads to come on here and engage with shareholders and who has obviously been working really hard to build the various divisions into a cohesive business with excellent growth prospects. Share price fully deserves a $4 handle and will grow nicely from there in my opinion.

[Rawz]

12536https://www.sharetrader.co.nz/blob:https://www.sharetrader.co.nz/57dd8c8c-9ff2-4fcf-a9f4-5b8f5900a84d

Interesting that their $5 share price forecast seems to be based on a 13 P/E. They do say "Whilst PE multiples are assumed to expand they remain very conservative" Yes they do indeed.

And I am guessing their forecast of $45m NPBT in FY24 is going to be their conservative number. Because everyone likes to exceed targets. Much like earlier this March they say they will report $35m NPBT but then produce a beautiful $37.4m NPBT today.

Maybe they hit $50m FY24.. Maybe market gives them say 15 P/E.. Could be road to $6.30 based on those numbers..
Wow shareholder returns are looking exceedingly juicy over the coming 3 years. Oops I forgot the dividend. Capital growth + tasty dividend. Awesome.

Happy holder.

[LaserEyeKiwi]

$4.00!

:t_up:

[Beagle]

What's the right PE ? Using my tried and proven Ben Graham model for finding value I take a no growth PE of 8.5 (when 10 year Govt stock is 4%) adjust that for current 10 year Govt stock rate of 2% gives low interest rate adjusted PE for a no growth stock of 10.5. Ben Grahame used 2 x g where g is the expected rate of eps growth of the stock for the next 7-10 years but my method to find real value is to use 1g.

Hang in there, this is where its gets interesting. If Turners can continue to grow their brand and expansion beyond this 3 year period in which they project 9.5% compound average growth rate we could apply a PE of 10.5 + 9.5 = potentially as high as 20.

Highlight this bit for Todd and the team. The market absolutely adores companies that can grow earnings per share at a sustainable pace over the long term and if Turners in due course can show they can do that beyond FY24 this company has an outstanding future and the market will accord them a PE of much higher than 13, (Briscoes on a PE of 17 is a good example of what I am talking about).

[Snow Leopard]

$4 as predicted by the faithful inverse bell curve pattern been a long time coming.

But a worthwhile wait.

[Biscuit]

What's the right PE ? Using my tried and proven Ben Graham model for finding value I take a no growth PE of 8.5 (when 10 year Govt stock is 4%) adjust that for current 10 year Govt stock rate of 2% gives low interest rate adjusted PE for a no growth stock of 10.5. Ben Grahame used 2 x g where g is the expected rate of eps growth of the stock for the next 7-10 years but my method to find real value is to use 1g.

Hang in there, this is where its gets interesting. If Turners can continue to grow their brand and expansion beyond this 3 year period in which they project 9.5% compound average growth rate we could apply a PE of 10.5 + 9.5 = potentially as high as 20.

Highlight this bit for Todd and the team. The market absolutely adores companies that can grow earnings per share at a sustainable pace over the long term and if Turners in due course can show they can do that beyond FY24 this company has an outstanding future and the market will accord them a PE of much higher than 13, (Briscoes on a PE of 17 is a good example of what I am talking about).

Could be pretty difficult for a domestic secondhand car dealership that has been around for a long time to achieve high sustainable long term growth rate?

[Beagle]

Could be pretty difficult for a domestic secondhand car dealership that has been around for a long time to achieve high sustainable long term growth rate?

Fragmented market with many small players, some of whom must be struggling with stock procurement. Aiming for steady market share gains will do it like they're presently doing with opening branches in Nelson and Rotorua.

[LaserEyeKiwi]

Could be pretty difficult for a domestic secondhand car dealership that has been around for a long time to achieve high sustainable long term growth rate?

Only a third of TRA profits come from “Automotive retail” - The other two thirds come from its financial operations: finance, insurance & credit management, which combined are increasing in profitability faster than the auto retail operations.


12537

[BlackPeter]

Great result - congratulations to Todd and his team!

So, lets look at the share price:

Forward PE (at SP $4) is based on (now potentially too conservative) analyst forecasts 12.6, forward earnings CAGR is 8. If things continue the coming years as they started a year or so ago, than this stock looks still really really cheap, doesn't it?

I guess the only question is - will things continue to improve with this velocity or are we already in the exuberance phase? What helped Turners to achieve such an amazing result?

Well, it is hard to get these days new cars given the Covid related production issues all car manufacturers seem to have. Logistic is currently screwed up and semiconductor manufacturers didn't anticipate the swift post Covid ramp up (but a post Covid drop). Question is just - how long will semiconductor manufacturers and car companies need to catch up and swamp the market with new cars. Months? Quarters? Years? Decades? My guess is it will take less than a year ... and I am holding semiconductor manufacturers as well as car manufacturers ... they talk about quarters to resolve the current production issues.

Such problems typically end up in overproduction issues - how long will it take that car manufacturers dump their new surplus cars in our backyard and what will that mean for Turners business?

Another plus for Turner was last FY that many people are not able to hold on to their money - it keeps burning holes into their pockets and so they just can't fight the urge to spend it as soon as it comes in. Given that Covid took their chances to spend their money travelling overseas, they happily used more of it to boost the margins of the car salesmen. How long will this phenomena continue when borders start to open again - or will it be in future less money available to buy the next banger?

I have no doubt that the team at Turners will adapt ... but the question is - does it make sense to assume that the company will keep growing? Selling used cars is still no rocket science, the barriers to enter the industry are (very) low and the pressure from new car sales will increase. Even offering car loans is not rocket science, and there is plenty of competition around.

How much better will it get for Turners - and why?

I still see Turners as a cyclical finance company with attached car sales business ... not more and not less. If I look at the SP, it looks SP is currently clearly in its upper quartile. Might stay there as long as the QE funded buying spree continues, but will it really keep rising like phoenix out of the ashes? What happens with all these car loans when (not if) the QE bubble pops?

[Biscuit]

Great result - congratulations to Todd and his team!

So, lets look at the share price:

Forward PE (at SP $4) is based on (now potentially too conservative) analyst forecasts 12.6, forward earnings CAGR is 8. If things continue the coming years as they started a year or so ago, than this stock looks still really really cheap, doesn't it?

I guess the only question is - will things continue to improve with this velocity or are we already in the exuberance phase? What helped Turners to achieve such an amazing result?

Well, it is hard to get these days new cars given the Covid related production issues all car manufacturers seem to have. Logistic is currently screwed up and semiconductor manufacturers didn't anticipate the swift post Covid ramp up (but a post Covid drop). Question is just - how long will semiconductor manufacturers and car companies need to catch up and swamp the market with new cars. Months? Quarters? Years? Decades? My guess is it will take less than a year ... and I am holding semiconductor manufacturers as well as car manufacturers ... they talk about quarters to resolve the current production issues.

Such problems typically end up in overproduction issues - how long will it take that car manufacturers dump their new surplus cars in our backyard and what will that mean for Turners business?

Another plus for Turner was last FY that many people are not able to hold on money - they just can't fight the urge to spend it as soon as it comes in. Given that Covid took their chances to spend it travelling overseas, they happily spent more money for the next car. How long will this phenomena continue when borders start to open again - or will it be less money available to buy the next banger?

I have no doubt that the team at Turners will adapt ... but the question is - does it make sense to assume that the company will keep growing? Selling used cars is still no rocket science, the barriers to enter the industry are (very) low and the pressure from new car sales will increase.

How much better will it get - and why?

I still see Turners as a cyclical finance company with attached car sales business ... not more and not less. If I look at the SP, it looks SP is currently clearly in its upper quartile. Might stay there as long as the QE funded buying spree continues, but will it really keep rising like phoenix out of the ashes? What happens with all these car loans when (not if) the QE bubble pops?

Ha, similar thoughts to me but maybe a bit more negative! I hold and think it has further to run, but have trouble believing a long term growth story.

[LaserEyeKiwi]

Great result - congratulations to Todd and his team!

So, lets look at the share price:

Forward PE (at SP $4) is based on (now potentially too conservative) analyst forecasts 12.6, forward earnings CAGR is 8. If things continue the coming years as they started a year or so ago, than this stock looks still really really cheap, doesn't it?

I guess the only question is - will things continue to improve with this velocity or are we already in the exuberance phase? What helped Turners to achieve such an amazing result?

Well, it is hard to get these days new cars given the Covid related production issues all car manufacturers seem to have. Logistic is currently screwed up and semiconductor manufacturers didn't anticipate the swift post Covid ramp up (but a post Covid drop). Question is just - how long will semiconductor manufacturers and car companies need to catch up and swamp the market with new cars. Months? Quarters? Years? Decades? My guess is it will take less than a year ... and I am holding semiconductor manufacturers as well as car manufacturers ... they talk about quarters to resolve the current production issues.

Such problems typically end up in overproduction issues - how long will it take that car manufacturers dump their new surplus cars in our backyard and what will that mean for Turners business?

Another plus for Turner was last FY that many people are not able to hold on to their money - it keeps burning holes into their pockets and so they just can't fight the urge to spend it as soon as it comes in. Given that Covid took their chances to spend their money travelling overseas, they happily used more of it to boost the margins of the car salesmen. How long will this phenomena continue when borders start to open again - or will it be in future less money available to buy the next banger?

I have no doubt that the team at Turners will adapt ... but the question is - does it make sense to assume that the company will keep growing? Selling used cars is still no rocket science, the barriers to enter the industry are (very) low and the pressure from new car sales will increase. Even offering car loans is not rocket science, and there is plenty of competition around.

How much better will it get for Turners - and why?

I still see Turners as a cyclical finance company with attached car sales business ... not more and not less. If I look at the SP, it looks SP is currently clearly in its upper quartile. Might stay there as long as the QE funded buying spree continues, but will it really keep rising like phoenix out of the ashes? What happens with all these car loans when (not if) the QE bubble pops?

They have moved much of their loan book to “premium” loans (high credit scores) - have a read of today’s annual results presentation.

[LaserEyeKiwi]

Ha, similar thoughts to me but maybe a bit more negative! I hold and think it has further to run, but have trouble believing a long term growth story.

Curious as to why you have trouble believing in a long term growth story from a company which already has an established long term growth history?

12538

(And the above is before today’s results - which beat the FY21 guidance on that chart)

[Rawz]

Ha, similar thoughts to me but maybe a bit more negative! I hold and think it has further to run, but have trouble believing a long term growth story.

Common there is lots of room for a trusted used car brand to expand throughout NZ. And don't take the word trusted lightly as in the used car world it is a game changer.

Look at it this way, Toyota have 58 dealerships throughout NZ.
Turners have 18 currently.

[Beagle]

Common there is lots of room for a trusted used car brand to expand throughout NZ. And don't take the word trusted lightly as in the used car world it is a game changer.

Look at it this way, Toyota have 58 dealerships throughout NZ.
Turners have 18 currently.

BINGO !!! Those with little faith need to take a brave pill and a coffee, wake up and get with the program !

[winner69]

$4 as predicted by the faithful inverse bell curve pattern been a long time coming.

But a worthwhile wait.

Nobody believed us about that inverse bell curve pattern.

Could 'predict' a top ......but we'll leave that for another day eh

[BlackPeter]

Curious as to why you have trouble believing in a long term growth story from a company which already has an established long term growth history?

12538

(And the above is before today’s results - which beat the FY21 guidance on that chart)

I guess - its quite easy to demonstrate for a cyclical that they are an amazing growth company (as well as that they are a candidate for doom and gloom) - just pick the timing which best supports your thesis and hope like hell that the other side does not check the background.

I used to hold at some stage their predecessor Dorchester Pacific - trust me, I know what I am talking about :scared: have a chat with Paul Byrnes at the next AGM if you are not sure what I mean ...

But anyway - good discussion and I guess we need to keep the SP definitely up until Grant Baker sells out.

All will be fine ... as long as you watch the trend and act fast enough.

[Biscuit]

Common there is lots of room for a trusted used car brand to expand throughout NZ. And don't take the word trusted lightly as in the used car world it is a game changer.

Look at it this way, Toyota have 58 dealerships throughout NZ.
Turners have 18 currently.

Yes, I think they have good short term growth prospects - and as I say, I'm holding. Also, have bought a car through them and I rate them pretty highly in regards to trust - they did a good job.

[Beagle]

Good result and strong outlook. Facts win the day BP and nobody likes sour grapes when there's solid positivity abounding backed by very solid results.
Your cynicism is noted but I think tailwinds in this sector are "much stronger for much longer" and those not on board are the losers :p

[LaserEyeKiwi]

Also I don’t see how “over production” of new cars is anywhere close to being a threat: most large automakers are forecasting that it will take them until 2022/2023 to make it back to pre-covid levels of production, which is still below where demand is post-covid (and to make things worse they are very supply limited for the transition to EVs due to lack of battery supply until 2025 at the earliest).

[LaserEyeKiwi]

Beagle, we’re you able to listen to the conference call? I was unable to listen and can’t find a replay available yet.

[Beagle]

I didn't tune in, outlook is clear enough for me. Maybe there will be a link on their website posted soon ?

I think there's some sour grapes with this one because "Blind Freddy" can see the very clear and very consistent uptrend since just under $2 this time last year and some people are annoyed they missed the ride...probably telling themselves all the way the trend in this "cyclical" would end really soon...which is why they're still singing the same tune now and probably still will be as it goes up to $5. Meantime the rest of us are enjoying our growing fully imputed quarterly dividends and...oh yes, just one other "little" thing, the share price rise ;)12539

[Waltzing]

Tried to pick up a 3rd car but the red Merc coupe was swooped by someone coming out of MIQ...

You have to be quick..

[winner69]

I’m disappointed with you Blackpeter

You haven’t reminded us that (rightly) nobody can predict and here we have Todd predicting a TRA share price of $5 (like it’s a certainty to happen)

Mind you are few years ago Baker told us TRA was worth over 3 bucks and eventually that ‘prediction’ turned out OK .....so today’s prediction will turn out to be true as well.

[Rawz]

I’m disappointed with you Blackpeter

You haven’t reminded us that (rightly) nobody can predict and here we have Todd predicting a TRA share price of $5 (like it’s a certainty to happen)

Mind you are few years ago Baker told us TRA was worth over 3 bucks and eventually that ‘prediction’ turned out OK .....so today’s prediction will turn out to be true as well.

It's actually quite unusual but refreshing to see a company put a specific SP target in place and tell shareholders how they are going to get there. Guess that's what you get from a company's management that own heaps of shares themselves.

[winner69]

Beagles tried and proven modified Graham formula gives an ‘intrinsic value’ of about $6.20 (today’s value)

Using any variation of the Gordon dividend growth model and based on Turners expectations you get a ‘value’ around $7 (not even allowing for imputation credits)

Even if you discount those multiples because Turners is just a small tinpot outfit (jeez revenues only $300m) at the bottom of the world you’d still get over $5

So TRA is really undervalued ...a bonza of a value play as they say

[winner69]

Just found time to skim through the preso

No doubt these two charts will look heaps better in a year or two

Top one, in particular, doesn’t look too flash and bottom one not that exciting last three years

Believe the story

[BlackPeter]

Good result and strong outlook. Facts win the day BP and nobody likes sour grapes when there's solid positivity abounding backed by very solid results.
Your cynicism is noted but I think tailwinds in this sector are "much stronger for much longer" and those not on board are the losers :p

Which part of my post did you see as cynical?

Bit worried about your final words above ... are you trying to create here some FOMO? Not the rational beagle I am used to.

Pretty happy with having parked my money in MFT, OCA, WHS, CDI, MCK and some other winners, but happy to see TRA going up as well. Hey, nobody can be everywhere at the same time, can you?

[winner69]

So exciting to see the share price back to where it was in May 4 years ago

Many tales have been told in those 4 years

Chart looks rather cyclical ... but then it is an inverse bell curve pattern

[winner69]

Numbers behind that revenues and npat charts

................2018 2021 CAGR
Revenues...330.5 296.5.. -4% pa
NPAT.........23.4 26.9 ...... 5% pa

[Snow Leopard]

So exciting to see the share price back to where it was in May 4 years ago

Many tales have been told in those 4 years

Chart looks rather cyclical ... but then it is an inverse bell curve pattern

Got to go back 13 years for the $5 they are [foolishly] promising us.

I can not find the Annual Report, is it not published yet?
I do like to delve into the detail before updating my valuations.

[winner69]

Got to go back 13 years for the $5 they are [foolishly] promising us.

I can not find the Annual Report, is it not published yet?
I do like to delve into the detail before updating my valuations.

Usually have to wait best part of month for Annual Report

I like looking Cash Flow Statement ......and some of the Notes

Bit odd really (not me but them not publishing with the announcement)

Even Oceania got 100 pages out the other day - maybe they haven't got a decent picture of the racing car yet

[Beagle]

Great result - congratulations to Todd and his team!

So, lets look at the share price:

Forward PE (at SP $4) is based on (now potentially too conservative) analyst forecasts 12.6, forward earnings CAGR is 8. If things continue the coming years as they started a year or so ago, than this stock looks still really really cheap, doesn't it? Yes it does.

I guess the only question is - will things continue to improve with this velocity or are we already in the exuberance phase? I think the dynamics driving demand have been well articulated by the company What helped Turners to achieve such an amazing result?

Well, it is hard to get these days new cars given the Covid related production issues all car manufacturers seem to have. Logistic is currently screwed up and semiconductor manufacturers didn't anticipate the swift post Covid ramp up (but a post Covid drop). Question is just - how long will semiconductor manufacturers and car companies need to catch up and swamp the market with new cars. Months? Quarters? Years? Decades? My guess is it will take less than a year ... and I am holding semiconductor manufacturers as well as car manufacturers ... they talk about quarters to resolve the current production issues. How many more quarters to address production backlogs and how many after that to get the vehicles shipped here and how is this in any way relevant to Turners customers who want a used car, and can't afford a new one ?

Such problems typically end up in overproduction issues - how long will it take that car manufacturers dump their new surplus cars in our backyard and what will that mean for Turners business?I think you dramatically overestimate the number of people who cross shop used cars and new cars. Turners core customer lies in the $10K - $20K range in my opinion. Your concerns in this area are ostensibly irrelevant to Turners in my opinion

Another plus for Turner was last FY that many people are not able to hold on to their money - it keeps burning holes into their pockets and so they just can't fight the urge to spend it as soon as it comes in. Given that Covid took their chances to spend their money travelling overseas, they happily used more of it to boost the margins of the car salesmen. How long will this phenomena continue when borders start to open again - or will it be in future less money available to buy the next banger? You think people might be more inclined to want to travel in their own car than on public transport ? Why would that be do you think ? Forbar recently came out with a report opining that international travel would not return to previous norms until 2026. WOW that's a long period of tailwinds !

I have no doubt that the team at Turners will adapt ... but the question is - does it make sense to assume that the company will keep growing? I suggest you actually read their presentationSelling used cars is still no rocket science, the barriers to enter the industry are (very) low and the pressure from new car sales will increase. Even offering car loans is not rocket science, and there is plenty of competition around. Finance company lending money AND getting it back with an appropriate return is a more challenging business than you suggest. Lots of people think repayment of a loan is optional and filtering those type of people out is easier said than done

How much better will it get for Turners - and why? Read their presentation

I still see Turners as a cyclical finance company with attached car sales business ... not more and not less. If I look at the SP, it looks SP is currently clearly in its upper quartile. Might stay there as long as the QE funded buying spree continues, but will it really keep rising like phoenix out of the ashes? What happens with all these car loans when (not if) the QE bubble pops?
Stick to your new car and semi conductor investments mate. Its clear you have a very limited understanding of this business.

[BlackPeter]

So exciting to see the share price back to where it was in May 4 years ago

Many tales have been told in those 4 years

Chart looks rather cyclical ... but then it is an inverse bell curve pattern

Cheers - that's what I meant with cyclical :) ... but I suppose beagles might have shorter memories and find it easier to work with short term linear approximations.

[Beagle]

Cheers - that's what I meant with cyclical :) ... but I suppose beagles might have shorter memories and find it easier to work with short term linear approximations.

Beagles simply sniff out feeds and try and ignore the B.S. They're growing, you either get it or in your case its clear you don't.

[BlackPeter]

Stick to your new car and semi conductor investments mate. Its clear you have a very limited understanding of this business.

Jeez, beagle - are these the symptoms of "irrational exuberance"? Or is this just your new communication style?

Looking at the points you added to my post ...

Yes, there are drivers for demand, but to be honest - they didn't change since the time the SP went down from $3 something to $1 something. Maybe no ideal correlation with the way the market chooses to price this company?

And re the travel demand ... no matter how slow it will ramp up from here (and it will) - any dollar spent on travel won't be available for a Turners car - and I suppose we might agree that next year people will spend more travel dollars than this year, don't we?

Anyway - I am quite happy with your (or anybody else's) investment in TRA :p; Happy for you if it keeps going up (and hey - it might). I was just saying that I see them at this stage more in the upper quartile of their SP range. Sure - might go further up (hard enough to forecast fundamentals, impossible to forecast hype), but it should be possible to mention some (real existing) risks without being attacked by hounds ... wouldn't you think so?

Just sing the hallelujah and allow others to provide some balance :p.

[Beagle]

Seriously, questions to the effect of what makes you think it will grow from here are all well covered in their presentation. Sorry I get bored and grumpy so easily with silly questions...yet another character flaw for me to work on.

You think people might put any future travel when it eventually happens on their credit card...just a thought mate, have a good day :)

[Habits]

"Anyway - I am quite happy with your (or anybody else's) investment in TRA"

I cleaned out the TRA cupboard today, the timing was very good for the next little thing

GLTAH

[winner69]

Roadmap to $5 / share

Brave or foolish call ..I say rather foolish

About as bad as some of the ramping we get on this thread

Heck, a lot of things outside of Turners control can go wrong in next two years that could affect share markets, let alone their own performance.

Wonder if such a ‘promise’ comes with a money back guarantee

[Beagle]

Beagles tried and proven modified Graham formula gives an ‘intrinsic value’ of about $6.20 (today’s value)

Using any variation of the Gordon dividend growth model and based on Turners expectations you get a ‘value’ around $7 (not even allowing for imputation credits)

Even if you discount those multiples because Turners is just a small tinpot outfit (jeez revenues only $300m) at the bottom of the world you’d still get over $5

So TRA is really undervalued ...a bonza of a value play as they say

I liked this post of yours earlier in the day much better than #6728 above. I think the tailwinds affecting Turners are clear enough and won't be abating anytime soon. 4 x divvies a year and a gross yield of over 7% means patient investors are being well rewarded. Believe in better.

[Rawz]

So exciting to see the share price back to where it was in May 4 years ago

Many tales have been told in those 4 years

Chart looks rather cyclical ... but then it is an inverse bell curve pattern

Turners was a different business 4 years ago. I do like to look at past results as much as the next person but sometimes a company makes a change to their business model which makes the past less relevant.

When TRA rebranded Buy Right Cars to Turners 2 years ago that was when they put their foot on the gas to change the model from wholesaler to retailer. That's why looking back 4 years ago is sending you crook. Even look at the property portfolio they had back then compared to now. Swapped out the big mega centers and moved to smaller yards. Oxford was reviewed and refocused targeting a different type of customer, just look at the graphs they have put up showing the arrears rate dropping from 10% to 4% or the avg credit score going from 425 to 600. Honestly it's like comparing apples and oranges looking at the business from 4 years ago to today.

This result is the proof that the new company direction is working. Working very well. 1-2 new yards a year they say. This company has a lot of growth ahead of them.

Roadmap to $5 is a fair call in my mind and conservative.

[Beagle]

Turners was a different business 4 years ago. I do like to look at past results as much as the next person but sometimes a company makes a change to their business model which makes the past less relevant.

When TRA rebranded Buy Right Cars to Turners 2 years ago that was when they put their foot on the gas to change the model from wholesaler to retailer. That's why looking back 4 years ago is sending you crook. Even look at the property portfolio they had back then compared to now. Swapped out the big mega centers and moved to smaller yards. Oxford was reviewed and refocused targeting a different type of customer, just look at the graphs they have put up showing the arrears rate dropping from 10% to 4% or the avg credit score going from 425 to 600. Honestly it's like comparing apples and oranges looking at the business from 4 years ago to today.

This result is the proof that the new company direction is working. Working very well. 1-2 new yards a year they say. This company has a lot of growth ahead of them.

Roadmap to $5 is a fair call in my mind and conservative.

#1 post of the day. Sums it up very well indeed !

[toddhunter]

#1 post of the day. Sums it up very well indeed !

Morning everyone...good to see so much discussion on our company! Couple of things I wanted to clarify...

1. Annual report will be out in June. We run a "lean and mean" head office finance team and they have been fully focused on the year end audit and wrapping up the year end results. They now turn their attention to the Annual Report.

2. The point of the "$5/share plan" was merely to help shareholders or those interested to understand our internal goals and targets over the next 3 years. Nothing more nothing less. Clearly we have more control over the actual profits the company makes, and this is what we will be focused on...the share price will be what it will be. One of the analysts cheekily asked us yesterday was the $5 price a ceiling? We do think the PE is undemanding (you would expect that) but consistently producing sustainable growth in EPS will change this (as Beagle rightly pointed out)

3. As RAWZ points out above this company is very different from what it was 4 years ago. For me the step change occurred probably half way through FY20 and putting Covid aside we have seen consistent progress since then. The second half has had no one-off impacts and seen us consistently deliver $3m+ earnings per month. As you all know I have ben around this business for a while and it has never been in better shape.

4. I would argue that this business is not a cyclical business at all...maybe it used to be Black Peter but not anymore. The used car market continues to demonstrate resilience no matter what is happening in the broader economy. Most people change their used car out of necessity not whim. 20% of the vehicle fleet is older than 20 years ... there is still a huge replacement program to happen. With used cars comes the need for finance and insurance. We are very confident we can continue to target and win market share in the high quality borrower segment. The combination of our activity revenues (Auto Retail and Credit) + a bigger proportion of annuity revenues (Finance and Insurance) results in far more consistency of earnings.

5. Our property investments are now just over $60m. We carry all these at cost on the balance sheet...this is building up very nicely with some significant capital upside in market valuations. We will keep cycling this capital as opportunities arise.

6. Sorry there isn't a recording of the results presentation. We will make sure we do this next time.

7. Directors and management are 100% focused on growing the business within the capital base we have. We are confident in the plan, we have seen the traction from this over the last 18 months and we think there is more to come. But in the end results will speak for themselves!

Thanks Todd

[Getty]

And !00% for the clarifications.

Thanks

[RTM]

Roadmap to $5 / share

About as bad as some of the ramping we get on this thread

Heck, a lot of things outside of Turners control can go wrong in next two years that could affect share markets, let alone their own performance.

I've held Turners for a number of years enjoying the dividends, enduring the dips and adding occasionally . Agree with what Winner says above, So just keep them at a sensible % of your portfolios. Just over 4% of mine, although I suspect they would be a bigger % of my share dividend income stream.

[LaserEyeKiwi]

Morning everyone...good to see so much discussion on our company! Couple of things I wanted to clarify...

1. Annual report will be out in June. We run a "lean and mean" head office finance team and they have been fully focused on the year end audit and wrapping up the year end results. They now turn their attention to the Annual Report.

2. The point of the "$5/share plan" was merely to help shareholders or those interested to understand our internal goals and targets over the next 3 years. Nothing more nothing less. Clearly we have more control over the actual profits the company makes, and this is what we will be focused on...the share price will be what it will be. One of the analysts cheekily asked us yesterday was the $5 price a ceiling? We do think the PE is undemanding (you would expect that) but consistently producing sustainable growth in EPS will change this (as Beagle rightly pointed out)

3. As RAWZ points out above this company is very different from what it was 4 years ago. For me the step change occurred probably half way through FY20 and putting Covid aside we have seen consistent progress since then. The second half has had no one-off impacts and seen us consistently deliver $3m+ earnings per month. As you all know I have ben around this business for a while and it has never been in better shape.

4. I would argue that this business is not a cyclical business at all...maybe it used to be Black Peter but not anymore. The used car market continues to demonstrate resilience no matter what is happening in the broader economy. Most people change their used car out of necessity not whim. 20% of the vehicle fleet is older than 20 years ... there is still a huge replacement program to happen. With used cars comes the need for finance and insurance. We are very confident we can continue to target and win market share in the high quality borrower segment. The combination of our activity revenues (Auto Retail and Credit) + a bigger proportion of annuity revenues (Finance and Insurance) results in far more consistency of earnings.

5. Our property investments are now just over $60m. We carry all these at cost on the balance sheet...this is building up very nicely with some significant capital upside in market valuations. We will keep cycling this capital as opportunities arise.

6. Sorry there isn't a recording of the results presentation. We will make sure we do this next time.

7. Directors and management are 100% focused on growing the business within the capital base we have. We are confident in the plan, we have seen the traction from this over the last 18 months and we think there is more to come. But in the end results will speak for themselves!

Thanks Todd

Thanks so much for dropping by Todd, and congrats on a great result!

Appreciate that you will aim to record earnings calls in future - especially the Q&A.

Really appreciate the engagement with investors - for example I enjoyed being able to ask you some questions virtually on the sharesies webcast you did recently.

Not sure if you can answer this, but is expansion into Australia a possibility in the long term?

[Rawz]

Thanks for posting Todd. Property being carried at cost + the finance division has the 'material' covid provision which surely wont be needed now. A couple of gems up your sleeve. :t_up:

Congrats to you and the team on the great result.

[toddhunter]

Thanks so much for dropping by Todd, and congrats on a great result!

Appreciate that you will aim to record earnings calls in future - especially the Q&A.

Really appreciate the engagement with investors - for example I enjoyed being able to ask you some questions virtually on the sharesies webcast you did recently.

Not sure if you can answer this, but is expansion into Australia a possibility in the long term?

Very focused on opportunities in NZ for the foreseeable future...plenty for us here to keep us busy.

[Sideshow Bob]

Very focused on opportunities in NZ for the foreseeable future...plenty for us here to keep us busy.

Not a holder (pity) but great to see Todd's posts.

[LaserEyeKiwi]

Very focused on opportunities in NZ for the foreseeable future...plenty for us here to keep us busy.

Thanks for the reply - much appreciated.

[Beau]

Thanks Todd good to hear everything on track and thanks to you and your team for a great result.

[Beagle]

Thanks so much for coming on here and clarifying things Todd and to you and your team for your hard work. The new advertisement with Tina is really good stuff, top marks !

https://www.nzherald.co.nz/business/juha-saarinen-chip-shortage-set-to-cause-economic-pain-for-years-to-come/QBPRZZIOZJQQ2OHJKR7XK752FA/

Interesting anecdotal story opining that the chip shortage could cause economic pain for years to come. (Paywalled)
The relevant part for Turners is this is very supportive of used car values. I've read one or two articles about how the European manufacturers are coping... and for instance BMW are taking important features like adaptive cruise control out of some of their models due to the unavailability of some chips.
I find it hard to imagine buying a high end BMW without adaptive cruise control that is standard fit on, (for example), every Toyota Corolla.
I also wonder where are all the batteries going to come from for the tidal wave of new EV' models set to be released in the next few years...but apologies, I digress.
I think used car values will stay "stronger for longer".

[Getty]

The caution I see is that if new vehicles are held up due to chip shortage, then less trade in stock become available, to flow on down through the used car sales chains, including Turners.

Nobody who would otherwise be a new car buyer, will roll into Turners to buy a used one instead, they will wait till new stock arrives in franchise dealerships.

The same dynamic will play out overseas, affecting Turners supply of import stock.

[winner69]

Hope the share price smashes through the 4 buck today ....or at the latest tomorrow

Last thing we want is somebody calling it a double top on the chart

[LaserEyeKiwi]

The caution I see is that if new vehicles are held up due to chip shortage, then less trade in stock become available, to flow on down through the used car sales chains, including Turners.

Nobody who would otherwise be a new car buyer, will roll into Turners to buy a used one instead, they will wait till new stock arrives in franchise dealerships.

The same dynamic will play out overseas, affecting Turners supply of import stock.

This is the opposite of what’s happening in reality - demand for used cars has exploded higher all over the world as the supply of new cars has decreased, highlighted most strikingly by the rapid increase in used car prices.

[Getty]

Be that as it may, its going to lead to a shortage of good used stock to replace what is sold.

[Beagle]

https://www.driven.co.nz/news/what-are-the-top-new-suvs-in-new-zealand-for-2021-so-far/

New vehicle sales going gangbusters so far... excerpt "The new-vehicle market is booming in New Zealand, with record sales for both February and March".

Maybe ordinary vehicles don't have so many chips as their fancy European counterparts :)

Mrs B might be selling her 2017 Honda Civic soon and I know where we'll go to get a fair sale price, (and its not Honda Cars Newmarket).

[sb9]

Turned out to be one of best performing stock for me over last year since Covid hit, almost a bagger. Who would've thought a boring second had car dealer would deliver this kind of return. Good on ya Todd and team and also Baker.

[winner69]

WHOOPEE -- 4 bucks broken and on our way to 5 bucks

Next year Todd will have to have a slide Pathway to $7/share :t_up:

[Beagle]

WHOOPEE -- 4 bucks broken and on our way to 5 bucks

Next year Todd will have to have a slide Pathway to $7/share :t_up:

LOL I love it. #1 post of the day :)

As mentioned yesterday, an argument can be made that they're worth $6.20 using my modified value filter Ben Graham investment model so I've very magnanimously put up a few for sale at $6.15 :D

[BlackPeter]

Morning everyone...good to see so much discussion on our company! Couple of things I wanted to clarify...

...

4. I would argue that this business is not a cyclical business at all...maybe it used to be Black Peter but not anymore. The used car market continues to demonstrate resilience no matter what is happening in the broader economy. Most people change their used car out of necessity not whim. 20% of the vehicle fleet is older than 20 years ... there is still a huge replacement program to happen. With used cars comes the need for finance and insurance. We are very confident we can continue to target and win market share in the high quality borrower segment. The combination of our activity revenues (Auto Retail and Credit) + a bigger proportion of annuity revenues (Finance and Insurance) results in far more consistency of earnings.

...

Thanks Todd

Hi Todd,

First let me thank you for another great post and clarification. I think your way to communicate with investors (and some traders :) ) like us is quite innovative (and as far as I know) quite unique. Efficient and addressing real concerns and issues. Great stuff!

Maybe one question re the cyclicality of the business ... it took markets in the 1920'íes less than a decade from 80% horse carts on the roads to 80% cars with combustion engines on the road - and in some markets the swap went even faster. I recon that this was a tough time for the sellers of horses and preloved carts ... and I recon that there was a high percentage of new vehicles on the road, given that due to the demand there would have been not many used vehicle with combustion engine available.

Now - this was 100 years ago, and nobody cares anymore - however I would expect a similar dynamics when EV's ultimately take over (and I don't think we will need to wait another decade to see that happening).

I do understand as well, that Turners can sell EV's as easy as cars with combustion engine. However - isn't it likely that there will be in the beginning of the EV tsunami just not enough used EV vehicles available but many more new cars (in percentage) on the roads? What happens if you can get a new and much more economical EV car for say $15,000 instead of the combustion engine version for 30,000? Would this cut into Turners business?

Anyway - just my thoughts ... and obviously - congratulations to Turners and its team for the recent results. Long may they continue!