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

[Louloubell]

Turners Nelson is now open. Yippee

[clearasmud]

Turners Nelson is now open. Yippee

Good deals?

[MauroNZ]

Michael Hill has done alright in Aus, W69. Lots and lots of kiwi businesses have gone over there and failed miserably

Maybe the best case is MFT?

[BlackPeter]

Maybe the best case is MFT?

Don't forget MPG - still hold back by their Australian adventure (sure, the rest is not that flash either). Both WHS and FBU lost lots of money in Australia .... and our cyclical poster child AIR nearly got broke (only saved by the NZ tax payer) thanks to investing into Australia. And than there was Pumpkin Patch, but I am sure there are more sorry stories.

[Rawz]

Don't forget MPG - still hold back by their Australian adventure (sure, the rest is not that flash either). Both WHS and FBU lost lots of money in Australia .... and our cyclical poster child AIR nearly got broke (only saved by the NZ tax payer) thanks to investing into Australia. And than there was Pumpkin Patch, but I am sure there are more sorry stories.

AIR probably best example. Telecom lost heaps.

Some do well. MFT, EBO, RYM going ok, FRE, ATM, SKY?. MHJ the best lol

Anyways, back to TRA. Hope they never expand into Aussie, well hope no time soon. Plenty more expansion to do here

[Ggcc]

Don't forget MPG - still hold back by their Australian adventure (sure, the rest is not that flash either). Both WHS and FBU lost lots of money in Australia .... and our cyclical poster child AIR nearly got broke (only saved by the NZ tax payer) thanks to investing into Australia. And than there was Pumpkin Patch, but I am sure there are more sorry stories.

Luckily TRA is quite happy just staying in nz for now. Lots of good times ahead, but they may see some struggles this year as interest rates climb

[Old mate]

https://www.stuff.co.nz/business/129292182/used-car-sales-have-plunged-and-prices-are-following

[Ggcc]

https://www.stuff.co.nz/business/129292182/used-car-sales-have-plunged-and-prices-are-following

Percy was already kind enough to post this on the 17th July 😊. Thanks anyway for the post

[Old mate]

Hehe missed that one. I actually didn't read date on that story. Old news:p

[Baa_Baa]

Hehe missed that one. I actually didn't read date on that story. Old news:p

It might appear to be old news, but for a quarterly reporter and dividend payer it's not all that old, only a few weeks until next reporting and we'll all see whether the article is correct and volumes and/or revenues are down. I suspect it'll be bad for the wider used car industry but not so much for Turners who tend to attract the go-to buyers when the economy is fecked. Lots of people still need to change their cars regardless of economic circumstances, they'll go to the best deal, and Turners are great deal makers. I'm more interested in how the subscription service is going, whether it's material to the company results yet or when it will be, surely this is the time when subs cars should shine. Eat some rentals company's lunch, so to speak.

[Sideshow Bob]

Turning employees into shareholders....

Turners launches employee share scheme - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/396826)

Turners launches employee share scheme

Turners has partnered with online investment platform Sharesies to launch an employee share scheme. The scheme provides the opportunity for permanent (part-time and full-time) employees of the business to invest $1,000 and receive $1,500 worth of shares at the completion of a 3 year vesting period. In order to encourage broad participation the company is also offering a three year interest free loan to acquire the shares to all staff.

Turners’ Chairman Grant Baker said “Engagement of our team has been a key focus for a number of years. We’ve already seen major improvements, and this is another initiative to further engage our team. We believe incentivising employee share ownership is an important part of aligning the interests of our team and shareholders. It is also another core benefit we can offer people as a locally owned NZX listed business. “

The company have worked with Sharesies to ensure that our team can easily access, see and track the value of their shares. Turners envisage issuing shares under this initial launch of the scheme on 24 August 2022.

ENDS

[Ggcc]

Turning employees into shareholders....

Turners launches employee share scheme - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/396826)

Turners launches employee share scheme

Turners has partnered with online investment platform Sharesies to launch an employee share scheme. The scheme provides the opportunity for permanent (part-time and full-time) employees of the business to invest $1,000 and receive $1,500 worth of shares at the completion of a 3 year vesting period. In order to encourage broad participation the company is also offering a three year interest free loan to acquire the shares to all staff.

Turners’ Chairman Grant Baker said “Engagement of our team has been a key focus for a number of years. We’ve already seen major improvements, and this is another initiative to further engage our team. We believe incentivising employee share ownership is an important part of aligning the interests of our team and shareholders. It is also another core benefit we can offer people as a locally owned NZX listed business. “

The company have worked with Sharesies to ensure that our team can easily access, see and track the value of their shares. Turners envisage issuing shares under this initial launch of the scheme on 24 August 2022.

ENDS
Happy staff, thriving business.

[Rawz]

This is really cool. Great for the staff and they are buying in at a good level.
Awesome that its through sharesies as well. its a very user friendly system. Perfect for new investors of which im guessing most of TRA employees would be new to investing.

Sharesies should partner with other NZX listed companies. Get more kiwis invested into shares. Housing isnt the only option

[winner69]

TRA share price was about 350 not that long ago and was heading down further ..... now its getting close to 4 bucks

That's good

[blackie]

"Turners launches employee share scheme"

congratulations TRA. very classy

[winner69]

Anybody know if Tina going to turn up at the ASM tomorrow

Need to know - if she is I'll give the meeting a miss

[sb9]

Anybody know if Tina going to turn up at the ASM tomorrow

Need to know - if she is I'll give the meeting a miss

I'm sure there'll be few pics of her at the ASM preso.

Someone's happy to accumulate decent parcels currently, hopefully 2 Cheap Cars (NZA) recent fiasco works in favour of TRA.

[sb9]

Winner won't be happy with ASM being kicked with a new video from Tina....:)

[winner69]

Winner won't be happy with ASM being kicked with a new video from Tina....:)

Thank goodness not watching

Suppose its a pretty boring meeting .... repeating all the warm fuzzy stuff that share holders like to hear

[winner69]

Tuned in .... audience getting a bit restless

[winner69]

How many times has Todd said 'That's a great question'

[sb9]

Nice ASM, nothing earth shattering, few headwinds but all in all business in good growth mode. Time to shift to FBU webcast.

[toddhunter]

How many times has Todd said 'That's a great question'

I was just trying to encourage some more questions!

[winner69]

I was just trying to encourage some more questions!

Fair enough ... but suppose most shareholders are happy with way things are going going and you guys had covered most things off in the good presentations.

Not really a dig at you but that saying is on the unofficial ASM Bingo Card

[Rawz]

I missed the asm. is there a recording anywhere?

Looking at the presentation- those profit and dividend charts. could look at them all day long. When does TRA get a re-rate?

[Muse]

I missed the asm. is there a recording anywhere?

Looking at the presentation- those profit and dividend charts. could look at them all day long. When does TRA get a re-rate?

Hopefully not until I am well overweight with it at some point in the future.

I never bother with the ASM for this one.

But also would love a DRP priced at 2.5% discount and no brokerage. Would set it at that for years and dilute the holy heck out of the cash takers, flick it over to cash and agitate like hell it should be turned off because it was dilutive. Ah - sounds like a dream.

[peat]

they sold over 500 cars from a new site before it had been finished being built!! haha thats awesome. pg 23

[clearasmud]

I missed the asm. is there a recording anywhere?

Looking at the presentation- those profit and dividend charts. could look at them all day long. When does TRA get a re-rate?
Copy and paste the YouTube site shown on the 16.8.22 announcement. It's still there.
It doesn't get a re-rate soon, dividend yield only 8%.

[Rawz]

Copy and paste the YouTube site shown on the 16.8.22 announcement. It's still there.
It doesn't get a re-rate soon, dividend yield only 8%.
Thanks!

8% yield and growing EPS and DPS. Clear pathway of growth. Strong brand. It can trade on a better multiple. 6% yield?

[Muse]

Thanks!

8% yield and growing EPS and DPS. Clear pathway of growth. Strong brand. It can trade on a better multiple. 6% yield?


In the short term (up to the next 24 months) I'd say people will be wary of a recession and what happens to margins per car when/if used car prices recede. But agree for such a well run business with so many pistons would be nice to see a re rating. we are pretty well rewarded in the meantime.

[toddhunter]

I missed the asm. is there a recording anywhere?

Looking at the presentation- those profit and dividend charts. could look at them all day long. When does TRA get a re-rate?

https://www.youtube.com/watch?v=QBOLWY5bt6k

Here is the link...

[Jaa]

In the short term (up to the next 24 months) I'd say people will be wary of a recession and what happens to margins per car when/if used car prices recede. But agree for such a well run business with so many pistons would be nice to see a re rating. we are pretty well rewarded in the meantime.

It is not just used car prices. Loan books perform and look great until tested by a recession where a lot of people lose their jobs. Turners have experience of this from Dorchester days but wariness is healthy.

[Waltzing]

RBNZ Gov saying on CNBC today that he is not expecting a recession in NZ....

chart look good buying here if thats the case but really 2020 was the BUY...

used car prices still up there...

[Jaa]

RBNZ Gov saying on CNBC today that he is not expecting a recession in NZ....

chart look good buying here if thats the case but really 2020 was the BUY...

used car prices still up there...

Yes, couldn't believe my luck getting some at $1.23 !!

[Muse]

It is not just used car prices. Loan books perform and look great until tested by a recession where a lot of people lose their jobs. Turners have experience of this from Dorchester days but wariness is healthy.

Yes agree but just saying perception is often more important than reality in the near term. And its never a bad thing to question the financial impact and sustainability of unusual events like the spike in car prices. Its also interesting thinking about the volume of used car sales nationally and by TRA in the last 2 years vs through various cycles

[winner69]

That ‘that’s a great question’ must be a CEO/Chairman thing at AGM’s (and analyst calls etc)

The My Food Bag guys answered most questions with a ‘that’s a good question’ ..not a great question.

The phrase ‘that’s actually quite good’ isn’t really a compliment and neither is ‘that’s a good question’….but they are things that I can’t miss hearing …even if not really paying much attention.

Sorry, just adding a bit of colour to the topic …whoops I’ve used a favourite guru analyst phrase.

[percy]

I think it must be very hard for CEOs answering so many "daft" questions at AGMs,that they are rather pleased to have some sensible questions asked.
I always remember the daft lady at an HGH AGM, asking and talking about DNA.The Chairman was sensible enough to point out to her she was at the wrong AGM...lol

[RTM]

I think it must be very hard for CEOs answering so many "daft" questions at AGMs,that they are rather pleased to have some sensible questions asked.
I always remember the daft lady at an HGH AGM, asking and talking about DNA.The Chairman was sensible enough to point out to her she was at the wrong AGM...lol

I think they say it as it gives them a little time to think and collect their thoughts before they answer.

[peat]

Well, shareholders of TRA arent getting diluted as bad as HGH but they still are getting diluted.
There would appear to be a very generous discount to staff shareholders as well as an interest free loan. All good, I am all for staff participation , in fact I managed the Air NZ staff share scheme way way back. I dont think their discounted price was as big a % as TRA's though.

[Ggcc]

Well, shareholders of TRA arent getting diluted as bad as HGH but they still are getting diluted.
There would appear to be a very generous discount to staff shareholders as well as an interest free loan. All good, I am all for staff participation , in fact I managed the Air NZ staff share scheme way way back. I dont think their discounted price was as big a % as TRA's though.
I spoke with a Napier sales person about 2 years ago and found him wonderful to deal with. As a shareholder I want nothing more than staff who are onto it and know their stuff. I’m all on board with giving incentives for good staff to stay, as they all need to survive in life and produce the best results for the company. We bought a car on the day.

[Rawz]

Well, shareholders of TRA arent getting diluted as bad as HGH but they still are getting diluted.
There would appear to be a very generous discount to staff shareholders as well as an interest free loan. All good, I am all for staff participation , in fact I managed the Air NZ staff share scheme way way back. I dont think their discounted price was as big a % as TRA's though.

At least it’s the employees getting a good deal and not the instos over at HGH.

I wonder if TRA might see some funds flow in from retail investors selling down some HGH? TRA yield is excellent and I reckon it’s divvy is safer than HGH. Execution risk for TRA plan is low, HGH Aussie plans… risky!!

TRA, it’s a buy!

[RTM]

At least it’s the employees getting a good deal and not the instos over at HGH.

I wonder if TRA might see some funds flow in from retail investors selling down some HGH? TRA yield is excellent and I reckon it’s divvy is safer than HGH. Execution risk for TRA plan is low, HGH Aussie plans… risky!!

TRA, it’s a buy!

Wait till Turners set up in OZ ! Then what ?

[peat]

Wait till Turners set up in OZ ! Then what ?
pretty sure they've discounted that as a possibility in the short - medium term.

[clearasmud]

pretty sure they've discounted that as a possibility in the short - medium term.
Pity really, there are plenty of cowboys there.

[kiwico]

Well, shareholders of TRA arent getting diluted as bad as HGH but they still are getting diluted.
There would appear to be a very generous discount to staff shareholders as well as an interest free loan. All good, I am all for staff participation , in fact I managed the Air NZ staff share scheme way way back. I dont think their discounted price was as big a % as TRA's though.

We get a 5% discount where I work. Periodically we're told info has been provided to IRD as the difference between what I pay and the actual prices is seen as taxable.

[Rawz]

https://www.nzx.com/announcements/398917

Turners and Tina win NZ Marketing Supreme Award
Turners have claimed the top award at the 2022 edition of the New Zealand Marketing Awards. With the Awards now in its 31st year, Turners took home the Supreme Award as well as Excellence in Brand Transformation Strategy and Excellence in Consumer Products & Services Strategy.
Todd Hunter CEO said “it is great to see quality strategy and creative winning the hearts of the judges and the New Zealand public alike with the loveable ‘Tina from Turners’ character. This campaign continues to have a significant impact on our business.”
The judges said Turners “delivered an outstanding marketing strategy that touched every aspect of the Turners business and delivered a truly significant transformation” and the brand “aligned to the strategy throughout the customer experience and became a key part of the organisation's DNA”.

Well done!! Against much bigger companies like banks, teleco's, big box retailers etc with much bigger marketing budgets!
Tina has been a huge hit and helped a lot to increase kiwi's recognition of the brand.

Looking forward to new branches opening up around the country in the coming years.
And looking forward to seeing more of Tina! :t_up::eek2:

[Ricky-bobby]

Yep awesome to see! Nice work Todd n co!

[4KJ]

Yes well done Todd & team.

[Jonette]

Turners finished the Sept quarter with a sharp reduction in inventory while the rest of the market inventory stayed pretty constant. It looks like they may have had a great quarter. If the market follows what appears to be a trend, inventory is likely to increase from now in preparation for Christmas sales.

[Rawz]

TRA looks oversold trading 8.5 p/e and 8.9% div yield. Doesn’t add up for a company with a clear plan for growth throughout NZ. The model is proven and management have actually provided forecasts of increasing earnings even in these uncertain times.

Looks like the 50 ema is about to pass through the 100 ema. That’s a good sign. Would love if someone with actual TA skills would comment further

[BlackPeter]

TRA looks oversold trading 8.5 p/e and 8.9% div yield. Doesn’t add up for a company with a clear plan for growth throughout NZ. The model is proven and management have actually provided forecasts of increasing earnings even in these uncertain times.

Looks like the 50 ema is about to pass through the 100 ema. That’s a good sign. Would love if someone with actual TA skills would comment further

Oh dear ... while I don't wont to comment on TRA's fundamentals and the market in general ... there is nothing positive to take out of this chart:

SP below all relevant MA's (no matter what these MA's doing) is ALWAYS a bad indicator.

14215

I guess what one potentially could hope for is a double bottom around $3.50 (which would be bullish if confirmed) ... but ways too early to bank this :) - at this stage its all in the noise ... ;

[Rawz]

Thanks BP.

Looking more at the fundamentals:

Currently trading 1.23x NTA at 31 march.
ROE= 12.4%

It compelling no?

[percy]

Thanks BP.

Looking more at the fundamentals:

Currently trading 1.23x NTA at 31 march.
ROE= 12.4%

It compelling no?

“When the going gets tough, the tough get going.”
Perhaps when times get tougher, we will see the number of used car dealers closing shop increase.
This will give Turners further opportunities to expand their market share .

[RTM]

Thanks BP.

Looking more at the fundamentals:

Currently trading 1.23x NTA at 31 march.
ROE= 12.4%

It compelling no?

This might help Turners. Certainly not going to encourage people to jump out of their cars !
And a few might get back into them.

https://www.newstalkzb.co.nz/news/national/auckland-rail-commuters-face-a-year-of-major-disruption-when-three-lines-are-closed/

[winner69]

“When the going gets tough, the tough get going.”
Perhaps when times get tougher, we will see the number of used car dealers closing shop increase.
This will give Turners further opportunities to expand their market share .

Didn't Tina say '.... simply the best / Better than all the rest /Better than anyone'

[BlackPeter]

Thanks BP.

Looking more at the fundamentals:

Currently trading 1.23x NTA at 31 march.
ROE= 12.4%

It compelling no?

Are you sure about the NTA ratio? My spreadsheet disagrees. However ... there has been a lot discussion on other threads about NTA ... so I leave it in times of dropping real estate values and dropping used car prices to anybody's imagination, whether 1.23 NTA (if true) is a good or bad number for TRA.

ROE of 12.4 is not outstanding, but solid (and consistent with my data). However - one stand alone data point doesn't make a trend ... but yes, if you assume that this numbers will nicely fit into a long and upwards trending future chart, than that's not too bad. If it is however achieved at a cyclical maximum, then better don't ask how it might look next year.

Now - I think it is fair to assume that next FY will not look that flash (given that all reserve banks are currently doing their best to curb consumer spending, and given that everybody who wanted to buy this big new gas guzzling SUV did that already before April 2022 when the governments penalties kicked in). The big question is - are we looking now at a minor dip in a long successful uptrend ... or is this a cyclical which first needs to get properly down before it gets back up again?

Buying cyclicals on the way down is typically not a good strategy to increase shareholder value.

Hard to say how things will turn out (that's the thing with the future). I guess based on the current P/E (9.6 3-yrs forward) and dividend yield (6.5%) TRA looks cheap - IF things don't turn South. However - based on hard experience - I have not yet seen too many companies which looked based on fundamentals cheap and outperformed after that for a long time.

It certainly looks like the market assumes earnings to drop a bit before they might get up again (otherwise the SP would not be that low). If things keep growing - you win, if things start to stutter, the market was right. Joys of investment ;) .

[Sideshow Bob]

https://www.nzx.com/announcements/399917

Turners Automotive Group (NZX/ASX: TRA) are pleased to announce that directors have declared a Q1 FY23 dividend of 5 cents per share (fully imputed) to be paid on 27 October 2022. The record date is 12 October 2022.

[Rawz]

Are you sure about the NTA ratio? My spreadsheet disagrees. However ... there has been a lot discussion on other threads about NTA ... so I leave it in times of dropping real estate values and dropping used car prices to anybody's imagination, whether 1.23 NTA (if true) is a good or bad number for TRA.

.... .

I pulled it from ASB. Maybe they are wrong. It has Book value per share of 2.93 at 03/22.
So SP today $3.60 / 2.93= 1.23x multiple

I think its probably a fair multiple.

I once bought some at $3.50- near the top, whoops.

Ive learnt a lot in 2022. Winners signature definitely applies to me lol.

[Rawz]

https://www.nzx.com/announcements/399917

Turners Automotive Group (NZX/ASX: TRA) are pleased to announce that directors have declared a Q1 FY23 dividend of 5 cents per share (fully imputed) to be paid on 27 October 2022. The record date is 12 October 2022.

same as last year. gross 6.944c per share

[ronaldson]

TRA are conservative with their approach to dividends in the quarter/half year periods. Last FY dividends were 5c,5c,6c, and 7c for a total of 23c. So the first quarter current year announcement of 5cps is consistent but leaves holders exposed to a potential reduction in subsequent quarters, although TRA have a good track record of rewarding holders.

[BlackPeter]

I pulled it from ASB. Maybe they are wrong. It has Book value per share of 2.93 at 03/22.
So SP today $3.60 / 2.93= 1.23x multiple

I think its probably a fair multiple.

I once bought some at $3.50- near the top, whoops.

Ive learnt a lot in 2022. Winners signature definitely applies to me lol.

Ahh ... you need to distinguish between book value - i.e. Equity including all assets including intangibles minus liabilities and NTA (which is Net Tangible Assets).

NTA for Turners is (according to Jarden, I didn't check their calculation) $1.18 per share.

Anyway - both values do have their justification (though book value is typically still more a good weather measure), but given you said NTA, I obviously assumed that this is what you meant :) ;

All good.

[Rawz]

Ahh ... you need to distinguish between book value - i.e. Equity including all assets including intangibles minus liabilities and NTA (which is Net Tangible Assets).

NTA for Turners is (according to Jarden, I didn't check their calculation) $1.18 per share.

Anyway - both values do have their justification (though book value is typically still more a good weather measure), but given you said NTA, I obviously assumed that this is what you meant :) ;

All good.

Ah yes I forgot it inc intangibles. my bad

[Jonette]

Turners now we’ll below fair value, although Simply Wall St is not a great predictor, they have done a better job for this, despite still grabbing debt levels for lending as though it were company asset debt, not realising Turners are a bank.

https://simplywall.st/stocks/nz/retail/nzx-tra/turners-automotive-group-shares?utm_source=braze&utm_medium=email&utm_campaign=Critical+Updates&utm_content=Email

my monitoring of inventory suggests they had a great September so the quarter may be up nicely. Certainly they are getting Subscription off to a great start, now more than 200 cars, interesting that includes 15% or 30 EVs

[Baa_Baa]

TCertainly they are getting Subscription off to a great start, now more than 200 cars, interesting that includes 15% or 30 EVs

14239

https://www.sharetrader.co.nz/blob:https://www.sharetrader.co.nz/bb6d185b-51ad-4e24-806e-1ab8f6f841ea

[BlackPeter]

Turners now we’ll below fair value, although Simply Wall St is not a great predictor, they have done a better job for this, despite still grabbing debt levels for lending as though it were company asset debt, not realising Turners are a bank.

https://simplywall.st/stocks/nz/retail/nzx-tra/turners-automotive-group-shares?utm_source=braze&utm_medium=email&utm_campaign=Critical+Updates&utm_content=Email

my monitoring of inventory suggests they had a great September so the quarter may be up nicely. Certainly they are getting Subscription off to a great start, now more than 200 cars, interesting that includes 15% or 30 EVs

Simply Wallstreet? Really? Try to invest based on your weekly horoscope in the newspaper, and you might get still better results ...

[Ggcc]

Simply Wallstreet? Really? Try to invest based on your weekly horoscope in the newspaper, and you might get still better results ...

Lol great laugh for the day and totally agree with you BP

[Ricky-bobby]

Bloody hell guys take it easy! People won’t post if u shut them down like that. He’s just just chucking it out there…

[Jonette]

Simply Wallstreet? Really? Try to invest based on your weekly horoscope in the newspaper, and you might get still better results ...

I'm sorry I broke your sensitivity. My comment stands, Simply Wall St is a bit like a clock, getting stuff OK now and again.

You really need to get into some active posting BlackPeter. Living up to your nom-de-plume is an easy way of riding on the coat-tails of others.

[BlackPeter]

I'm sorry I broke your sensitivity. My comment stands, Simply Wall St is a bit like a clock, getting stuff OK now and again.

You really need to get into some active posting BlackPeter. Living up to your nom-de-plume is an easy way of riding on the coat-tails of others.

That's funny ... but yes, if you use a broken clock to measure time, than clearly you can as well refer to Simply Wall Street.

However - I assume you understand that others use these threads as well for education, so I hope you can forgive me for actively ( :p ) pointing out for their benefit that you are using a broken clock to determine the time.

Obviously I am devastated that such an outstanding poster like you complains about my lack of of "active posting". Just help me to understand - how do you measure that, and how do you define an "active post"?

Always learning .... :) ;

[winner69]

What was Simply Wallstreet valuation to cause such outrage

I trust it wasn’t something like $2.12 - if so i suppose I’d be outraged as well

[Rawz]

Simple wall st says fair value $4.49. Don’t know what all the fuss is about- seems spot on to me

[winner69]

Simple wall st says fair value $4.49. Don’t know what all the fuss is about- seems spot on to me

Jeez, $4.49 seems a pretty fair value.

Share price been there not long ago so doesn’t even have to reach new highs to get to that target.

Once market recovers be mid 4’s in a flash

Agree, what was the fuss about

[BlackPeter]

Jeez, $4.49 seems a pretty fair value.

Share price been there not long ago so doesn’t even have to reach new highs to get to that target.

Once market recovers be mid 4’s in a flash

Agree, what was the fuss about

What fuss? Did I miss anything ;) ;

[winner69]

What fuss? Did I miss anything ;) ;


Probably did miss it BP …you caused it

[BlackPeter]

Probably did miss it BP …you caused it

You mean just by agreeing with Joane that Simply Wall Street's analysis is like a broken clock?

That's funny ... some people must be very easy to fuss-ible ..

Probably just a slow news day ...

[bull....]

breaking down thru june lows :scared: 50% retracement of covid stimulus boost would imply 2.80 odd ? levels at which it was trading before artificvial boost of spending by orr

this is oversea's data but im sure it might have some relevance to nz

The Used Car Market Has Finally Reached Its Peak, as Prices Fall After Two Record-Breaking Years of Inflation
https://www.businesswire.com/news/home/20220907006036/en/The-Used-Car-Market-Has-Finally-Reached-Its-Peak-as-Prices-Fall-After-Two-Record-Breaking-Years-of-Inflation

[BlackPeter]

breaking down thru june lows :scared: 50% retracement of covid stimulus boost would imply 2.80 odd ? levels at which it was trading before artificvial boost of spending by orr

this is oversea's data but im sure it might have some relevance to nz

The Used Car Market Has Finally Reached Its Peak, as Prices Fall After Two Record-Breaking Years of Inflation
https://www.businesswire.com/news/home/20220907006036/en/The-Used-Car-Market-Has-Finally-Reached-Its-Peak-as-Prices-Fall-After-Two-Record-Breaking-Years-of-Inflation

Great news! Used car prices down, house prices down, stocks down, milk price down - maybe we reached the end of inflation over all?

[iceman]

Went onto the Turners website to look for availability of a car for a business I'm involved in. All the selections that came up are in Te Reo only, not English. I hope this is great stuff for TRA, but have my doubts. I certainly don't have time for it so have gone elsewhere for my enquiries.

[Rawz]

Went onto the Turners website to look for availability of a car for a business I'm involved in. All the selections that came up are in Te Reo only, not English. I hope this is great stuff for TRA, but have my doubts. I certainly don't have time for it so have gone elsewhere for my enquiries.

Lol? I tried to replicate it because i thought it would be funny if they actually did that. Like the new saying- 'go woke, go broke' would apply.

sadly i couldnt replicate. All in boring old English for me

Must say the website is very clean and modern. Very nice

Couple of good photos of Tina in amongst it all. Winner will be happy

[Antipodean]

I just went to the Turners website and tried to deliberately display in Te Reo and failed... must be doing something wrong as I can only find English and an optional single page Chinese language?

Other than that it was remarkably easy to use.

[iceman]

Lol? I tried to replicate it because i thought it would be funny if they actually did that. Like the new saying- 'go woke, go broke' would apply.

sadly i couldnt replicate. All in boring old English for me

Must say the website is very clean and modern. Very nice

Couple of good photos of Tina in amongst it all. Winner will be happy

Looks like I was a bit quick and short tempered earlier. Turns out it's a new PC in the office and searches through Bing have Te Reo as default or something :confused:
We can't figure out how to change it as we don't understand it but luckily trusted old Google is in English. Won't be selling my TRA shares now :t_up::p

[Rawz]

Looks like I was a bit quick and short tempered earlier. Turns out it's a new PC in the office and searches through Bing have Te Reo as default or something :confused:
We can't figure out how to change it as we don't understand it but luckily trusted old Google is in English. Won't be selling my TRA shares now :t_up::p
:lol::lol::lol:

see bing go woke go broke. now youre back to google.

[percy]

Looks like I was a bit quick and short tempered earlier. Turns out it's a new PC in the office and searches through Bing have Te Reo as default or something :confused:
We can't figure out how to change it as we don't understand it but luckily trusted old Google is in English. Won't be selling my TRA shares now :t_up::p

Thank goodness for Google..lol.

[Jonette]

Turners announcement that “H1-23 net profit before tax to be modestly ahead of H1-22 net profit before tax of $23.2m for the six-month period ended 30 September. ” is as expected. Their sales have clearly been ahead of the market as they struggle to maintain stock levels

[Rawz]

Turners announcement that “H1-23 net profit before tax to be modestly ahead of H1-22 net profit before tax of $23.2m for the six-month period ended 30 September. ” is as expected. Their sales have clearly been ahead of the market as they struggle to maintain stock levels

Pretty good. Solid actually. Market is down yet TRA ahead

Here is the link full blurb to make it easier for some folk on their phones or what not

https://www.nzx.com/announcements/401078

Turners Automotive Group (NZX/ASX: TRA) expects H1-23 net profit before tax to be modestly ahead of H1-22 net profit before tax of $23.2m for the six-month period ended 30 September. The group is waiting on final confirmation of insurance reserve movements and will announce their half results on 22nd November.
Despite a challenging macro environment during the period, with four months of Omicron impact, rising interest rates, increased government regulation, and decreased industry demand, Turners has seen an increase in car units sold year on year and as a result, strong growth in market share. The wider NZ used car market is down 7.5% year to date (April to September) compared to the same period last year.
Turners’ auto retail network expansion, highly effective (award winning) advertising and retail optimisation strategy continues to drive growth for the business and offset the impact of the interest rate headwinds being experienced by Oxford Finance.
Group CEO Todd Hunter said: “We are seeing clear evidence that NZ consumers are increasingly looking to buy and sell with trusted people and a business that will be around for years to come. We also expect to see further transition from new to used vehicles in tougher economic times.”
Despite the macro context, the resilience and diversification of the group continue to deliver robust earnings and consistent dividends for Turners’ shareholders.

[winner69]

One of those 'positive' announcements to give you warm fuzzies now but to temper any expectations of profit increases like last year .... so when npbt comes in essentially no growth (modest that is) it won't be a surprise .... pretty clever eh

Could say a 'veiled' profit downgrade? But then again some guru analysts weren't expecting any profit growth in F23 anyway.

Hey Rawz --- selling heaps more cars but making stuff all (sorry modest) extra profit ... is that how its meant to work?

[Rawz]

Its okay W69. TRA trading on modest P/E of 8 and we are sitting here collecting gross divvy of 9%+ divs paid quarterly. its nice and tidy, easy business to understand. clear national expansion plans. Its okay to sit and hold, use the divs to accumulate more shares of the business if you like.

Oxford might have had a tough H1 with lower NIM. Asset finance went strange last 6 months, swaps going up but customer rates not so much. Good for the customers though!

There is no downgrade here. Last target was FY25 NPBT of $50m. Maybe see FY23 $45m. All on track

[winner69]

Its okay W69. TRA trading on modest P/E of 8 and we are sitting here collecting gross divvy of 9%+ divs paid quarterly. its nice and tidy, easy business to understand. clear national expansion plans. Its okay to sit and hold, use the divs to accumulate more shares of the business if you like.

Oxford might have had a tough H1 with lower NIM. Asset finance went strange last 6 months, swaps going up but customer rates not so much. Good for the customers though!

There is no downgrade here. Last target was FY25 NPBT of $50m. Maybe see FY23 $45m. All on track

Turners (and me) say F22 EPS was 36.4 cents (no idea where NZX gets the 42.3 cents from) ..... gives a PE just under 10 ,,,,, about right I'd say

No worries though .... Todd has averted a potential disaster if he'd announced a flat H1 without pre-empting it

[Rawz]

Turners (and me) say F22 EPS was 36.4 cents (no idea where NZX gets the 42.3 cents from) ..... gives a PE just under 10 ,,,,, about right I'd say

No worries though .... Todd has averted a potential disaster if he'd announced a flat H1 without pre-empting it

True.. NZX is off! P/E is high 9s

About right as you say

[winner69]

My spreadsheet shows EPS growth last 5 years 9.0% pa - and average PE over that time 11

Forecast EPS growth next 3 years 4.1% pa

Share price currently about right .... maybe

Seems it's only the dividend that's supporting the share price (and it seems that won't be keeping up with inflation)

Maybe we could invent something called the 'the option value of the Turners dividend' to justify holding

[bull....]

auto nation one of the us biggest second hand dealers reported recently. this is a bloomberg interview

AutoNation’s CEO Warns of Used-Car Price Drop as Rising Rates Curb Demand
https://www.bloomberg.com/news/articles/2022-10-27/autonation-ceo-warns-of-used-car-price-drop-as-rising-rates-bite?leadSource=uverify%20wall

interesting he said they wanted to cut inventory levels as didnt want dealers caught out with cars depreciating ( in other words cars be worth less than what they paid cause prices falling quick )

[Rawz]

auto nation one of the us biggest second hand dealers reported recently. this is a bloomberg interview

AutoNation’s CEO Warns of Used-Car Price Drop as Rising Rates Curb Demand


https://www.bloomberg.com/news/articles/2022-10-27/autonation-ceo-warns-of-used-car-price-drop-as-rising-rates-bite?leadSource=uverify%20wall

interesting he said they wanted to cut inventory levels as didnt want dealers caught out with cars depreciating ( in other words cars be worth less than what they paid cause prices falling quick )

About time we see some deflation in the world. Rates can lower then we can all re-rate TRA higher

[winner69]

Hope Tina can sort this mess out

Jeez 135 keys etc to be replaced

https://www.stuff.co.nz/waikato-times/news/300732627/keys-to-every-car-stolen-from-hamilton-car-auctioneer

[BlackPeter]

Hope Tina can sort this mess out

Jeez 135 keys etc to be replaced

https://www.stuff.co.nz/waikato-times/news/300732627/keys-to-every-car-stolen-from-hamilton-car-auctioneer

Replacing keys for modern cars is really expensive - think between $500 to $ 1000 per key.

Hope their insurance covers this ...

[Balance]

Replacing keys for modern cars is really expensive - think between $500 to $ 1000 per key.

Hope their insurance covers this ...

$270,000 worth of keys to be replaced - drop in the bucket for TRA?

[BlackPeter]

$270,000 worth of keys to be replaced - drop in the bucket for TRA?

I see you added already some cost for lost opportunities and lost staff time, which may or may not be enough.

Anyway - I am sure it won't kill them.

Hope though this is not the next big thing for our youth after ram raids getting lame, otherwise it could accumulate.

Some 100k here and some 100k there and at some stage you end up with a really big number.

Maybe a good idea to store car keys in future in a safe(r place).

[Mafman]

I'll bet the keys will be offered back for a ransom. A lot less than $270k.

[Nor]

Sometimes see this stuff about empowering our youth and think uh oh. Youth is naturally rebellious, I think that's an axiom. So where might empowering youth lead? Ram raids perhaps.

[whatsup]

$270,000 worth of keys to be replaced - drop in the bucket for TRA?

Bal, drop with their reputation as well !!

[LaserEyeKiwi]

https://www.nzx.com/announcements/402756

Turners delivers robust returns despite challenging market (https://www.nzx.com/announcements/402756#)

22/11/2022, 9:12 am HALFYRKey HY23 Financial Metrics (% v HY22):
• Revenue $185.3m (+11%)
• EBIT increased 2% to $26.1m
• NPBT $23.4m (+1%)
• NPAT $17.1m (+1%)
• Earnings per share 19.8 cps (+1%)
• Q2 dividend declared at 5.0 cps

Highlights
• Record net profit before tax of $23.4m for HY23 slightly ahead of HY22 ($23.2m NPBT).
• Auto retail and Insurance divisions grew operating profit.
• Auto retail market share increased from 6.4% at HY22 to 8.2% year on year.
• Car units sold increased through scaling up local sourcing, during a period in which the NZ used car market was down 7.5%, which offset reduced industry margins.
• Interest rate environment impacting Finance net interest margin as expected.
• Finance arrears performing significantly better than market levels, and well provisioned for any increase in arrears
• Earnings diversification and resilience of business demonstrated in a challenging economic and operating environment. Q1 impacted by Omicron, both in customer demand and staff impact.
• Record levels for both employee engagement and customer experience metrics. Employee share scheme well received and aligns with shareholders value creation.
• Based on our experience in the first half and early trading in H2 we expect FY23 NPBT to be at or slightly above last year’s record result, with a projected FY23 dividend of 0.23 cps, consistent with last year, representing a gross yield of 8.9% per annum (based on a $3.60 share price).

Turners Automotive Group (NZX/ASX: TRA) delivered strong earnings in the six months to September 30 2022 (HY23) successfully navigating Omicron disruption and tightening economic conditions, including rising inflation and interest rates, which impacted consumer spending and finance margins. The healthy result reflects the inherent diversification of the business and strengthened positions of each core market segment over recent years, providing greater resilience through the cycle.

Todd Hunter, CEO, said: “In a market where used car sales were down 7.5%, Turners grew market share and achieved higher sales year on year, a credit to our auto retail network expansion, our award-winning advertising and retail optimization strategy. To be able to maintain healthy returns to shareholders during a difficult period is a tribute to our dedicated and highly engaged team, which once again outperformed. The robustness of our diversified business has been demonstrated despite the industry headwinds which we expect will continue into the second half of the year.”
 
Financial results

Reported NPBT, which is the basis for Turners’ full year guidance, increased 1% year on year to $23.4m with net profit after tax (NPAT) at $17.1m, up 1%. Earnings per share for HY23 were 19.8 cps, up 1% on the previous year. The Board declared a Q1 dividend of 5.0 cps, and a further 5.0cps has been declared for Q2, taking HY23 dividends to 10.0 cps. This reflects the dividend policy to pay-out 60-70% of net profit after tax (NPAT).

Grant Baker, Chairman, commented: “Considering the disruption of Omicron, during which up to 25% of our operational staff were impacted, and the headwinds of higher interest rates and households under an economic squeeze, we are encouraged with the results achieved in our first half. Turners Automotive Group has become a sustainable, high-performing business. Undoubtedly, we will face tough economic conditions in the second half, but our geographic and earnings diversification continue to provide resilience through the cycle. Car sales have held up well so far in Q3, and margins are starting to improve. Our loan book is stable, although rising interest rates will continue to put pressure on cost of funds. Claims in our Insurance business continue to track below expectations. We are demonstrating that we can win market share and deliver growth through the down cycle due to the success of our strategy, the quality of our portfolio and our incredible team. We see opportunities during this time of adversity”

Divisional results

Refer to Appendix.

Turners’ strategy proves its worth
Our investment over recent years to diversify our business, as well as taking a leadership position in each segment, continues to deliver results, and provide resilience in the face of tough conditions:

 Auto Retail: market share gains through brand promotion and retail optimization initiatives. In particular, Speed to Sale operational initiatives led to more sales on lower inventory. Damaged unit sales were up 13% year on year.

 Finance: our continued focus on targeting high-quality borrowers again saw more than 50% of new lending in the premium risk business. Interest expense was up 106% to $5.6m resulting in an expected compression in net interest margins. Arrears are stable.

 Insurance: we made market share gains and claims ratios continued to improve. We have almost completed our core system replacement programme, which will further improve operational agility and future performance.

 Credit Management: continues to face tough conditions, but we are well placed for a pick up in activity in this space with debt load continuing to increase. We are making good progress in our transition to more customer focused collection practices (resolution not consequences).
 
Award-winning Marketing
Gains in market share have been supported by our “Tina from Turners” brand campaign. In September 2022, Turners claimed the top award at the 2022 New Zealand Marketing Awards. Up against high calibre competition Turners took home the Supreme Award, as well as Excellence in Brand Transformation Strategy and Excellence in Consumer Products & Services Strategy. This was followed up in October with two “gold” awards at the Advertising Effectiveness “Effie” Awards for Best Strategic Thinking and Retail/Etail categories. The judges clearly love Tina as much as our customers do.

Update, Outlook and Guidance
Q3 Update: While we know economic headwinds will continue into the second half with interest rates continuing to rise at unprecedented speed and consumer confidence impacted, we are well-placed to continue to compete effectively in difficult market conditions:

o Auto retail: Car sales holding up well, margins improving, new site contribution
o Finance: Increasing impact of interest rate environment. Expecting some deterioration in arrears Loan book stable.
o Insurance: Claims continue to track below expectations, and investment returns improving
o Credit: Debt load recovering, but more slowly than expected.

FY23 guidance: We expect the Auto retail business to continue to grow strongly from our execution of our retail optimisation strategy, however the impact of the interest rate environment will be more pronounced in H2 FY23 and FY24.
Based on our experience in the first half and early trading in H2 we expect FY23 NPBT to be at or slightly above last year’s record result. We anticipate full year fully imputed dividends of 23 cents per share (FY22 23 cps) based on the current dividend payout policy of 60-70% of NPAT.

ENDS
About Turners
Turners Automotive Group Limited is an integrated financial services group, primarily operating in the automotive sector www.turnersautogroup.co.nz (http://www.turnersautogroup.co.nz)
For further information, please contact:
Todd Hunter, Chief Executive Officer, Turners Automotive Group Limited, Mob: 021 722 818 (tel:021 722 818)
 
APPENDIX: Divisional results

Auto Retail: Revenue $129.6m +13%, Segment Profit $11.1m +8%

 Revenue grew by 13% to $130m, reflecting market share growth, despite a 7.5% reduction in used car market transactions from April to September, 2022. Registered dealers are at their lowest level for almost nine years as government regulation and higher interest rates impact the viability of smaller operators.
 Turners continue to outperform with total owned units sold in HY23 up 11% over HY22, even though our overall margin on cars we own was down 9% for the period. Retail unit sales were up 7% to around 9,500, and wholesale auction unit sales were up 42% to around 9,500 units.
 Gains in market share have been greatly supported by our Tina brand campaign, as mentioned above. Meanwhile, Nelson and Rotorua auto retail centres are now both fully operational and performing above expectations. These rapid results further validate the success of our geographic expansion model. Expansion in Timaru, Napier and Tauranga in pipeline for FY24. The business is operating off lower inventory levels with faster stock turn and is repositioning type of stock to smaller and cheaper, anticipating future trends in a tighter market.

Finance: Revenue $29.2m +16%, Segment Profit $9.1m -9%

 Finance had another strong six months, despite rapid interest rate rises which pressured margins. Revenue for HY23 was $29.2m, up 16% on last year. NPBT was down 9% to $9.1m, nonetheless a creditable result considering market conditions.
 A focus on pricing and margin has been critical in dealing with the speed of interest rate rises. Growth has moderated as quality and margin become higher priorities. Controlled lending through our own Turners and Direct channels was up 13% in HY23 to $34m. Pleasingly Premium Tier business accounts for more than 50% of our new business each month.
 Credit policy has been tightened incrementally throughout HY23. Hardships are down more than 90% from their FY22 peak.

Insurance: Revenue $21.6m +4%, Segment Profit $6.3m +8%

 Market share gains continued to underpin policy sales despite challenging market conditions. NPBT was up 8% to $6.3m on the back of revenue gains to $21.6m, up 4% on the same period last year. Operating cost ratio was steady between 20%-21%.
 Distribution arrangements are continuing to work well, including further digital enhancements. Claims costs remain steady with procurement remaining a key strength and offsetting parts inflation and labour rate increase.
 We have reaffirmed AM Best credit rating for Insurance and Financial Strength rating at B ++ (Good).

Credit Management: Revenue $4.9m -14%, Segment Profit $1.4m -32%

 Revenue decreased 14% to $4.9m, as COVID-19 continued to impact our collections results, this time Omicron waves rather than lockdowns. Debt load is up 3% for HY23 to $63.4m, as market wide credit metrics start to deteriorate. Debt value collected was down 8% to $18.7m as cost of living pressures impacted consumers’ ability to address outstanding debts.
 Our “Promises to Pay” kept rate has remained stable at 76%.
 We are continuing to transition to a digital-based business, as well as transforming our collections approach to be more customer-focused, centered on resolution rather than consequence.

ENDS

[Rawz]

Solid result. Price on a no growth 8.4 P/E
Gross dividend yield of close to 9%

auto retail market share growing.

the NIM in the finance division will come right. wonder if they can get their interest costs down..

TRA quality factor is looking good in what is a tough market right now

[Muse]

robust result, in my view.

with inflation hitting households hard, and high fuel prices which ought to be quite a dampener on private transport and car purchases, these guys & gals are still performing well. love those marketshare gains.

one of my favourite blue chip smallcaps

[Rawz]

NTA increased 21% yoy

[LaserEyeKiwi]

Bucking the trend somewhat from other retailers who reported large y-o-y increases vs the year ago lockdown period.

[BlackPeter]

Very respectable result given that the sales sugar rush of people trying to precede the governments eco taxes is now fading. HY revenue up (but compared to a COVID HY), though still fitting into the by analysts forecasted FY revenue down. More important - they are managing to keep their earnings despite difficult circumstances basically flat.

Well done team - it is in difficult times like these when one recognises the outperformers.

Just lets hope the coming recession doesn't impact too much on consumers ability to repay their car loans ...

[Rawz]

Bucking the trend somewhat from other retailers who reported large y-o-y increases vs the year ago lockdown period.

If you want to strip out the non 'retail' divisions (finance, insurance etc) and look just at auto it grew a respectable 13% whilst the market shrunk 7.5% so pretty solid growth

[Muse]

Very respectable result given that the sales sugar rush of people trying to precede the governments eco taxes is now fading. Revenue down (not unexpected), but still managing to keep their earnings basically flat.

Well done team - it is in difficult times like these when one recognises the outperformers.

Just lets hope the coming recession doesn't impact too much on consumers ability to repay their car loans ...

revenue is up

[Rawz]

loan book grew to $443m 19% up yoy. Wow.

[BlackPeter]

revenue is up

You are right - revenue first HY up vs first HY last year. My bad for looking at the full year forecasts (after checking them against the HY report) without specifying that.

What I should have said is: Forecasted full year revenue so far in line with HY results and below last years full year revenue.

Shall try to make my post above a bit better understandable.

[LaserEyeKiwi]

If you want to strip out the non 'retail' divisions (finance, insurance etc) and look just at auto it grew a respectable 13% whilst the market shrunk 7.5% so pretty solid growth

Good point. That makes more sense.

[Rawz]

CFO, Aaron Saunders, bought another $100k worth of share. Now holds $351k worth of shares

Nice support shown

https://www.nzx.com/announcements/403007

[Rawz]

I know this has been mentioned before but thought it was a good reminder for the thread.. the registration costs for a used import has gone from $200 to $2500 and it is killing the used car dealerships. I was talking to one yesterday and the owner was ripping into the government lamenting how much it was hurting his business.

All good for TRA who of course source most of their vehicles from within NZ. From leasing companies, private companies, repossessions, personal etc etc

This is why TRA auto business recently reported growth of 13% in a shrinking market. I expect this market share growth to continue

[ronaldson]

And Alaistair Petrie (Director) purchased another 200k shares off-market on 1 December via his company Bartel Holdings Limited, at $3.50 and cum the 5cps imputed dividend. This will have been during the window available for insiders to do that after release of the half year results, so Rawz is absolutely correct that the internal support shown here is good.

This is yet another company discussed at the Sharetrader get together at Oyster and Chop on Sunday. Not many buyers around presently so I am trying to steal some on-market just now via my own company.

[Snoopy]

And Alaistair Petrie (Director) purchased another 200k shares off-market on 1 December via his company Bartel Holdings Limited,...


I believe that Alaistair Petrie is the merely the NZ representative of the Ecuadorian Alvaro Noboa family, the people behind Bonita bananas. If you look at the biography of Alvaro Noboa.

https://www.alvaronoboa.com/en/biography/

it still says he has interests in New Zealand. Bartel Holdings was a significant shareholder in the old 'Turners Auctions' company, which when taken over by Dorchester, became the Turners business we know today. I know some of the public shareholding information says that Alaistair Petrie is the 100% shareholder of Bartel.

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/522612/shareholdings

But I think that is only in the sense that Petrie is the local nominee of the Alvaro Noboa family. Petrie took over this job from Michael Dossor who died in 2016. I don't recall any information on the Ecuadorians selling out since then. And being a shareholder from the Turners Auction days, I think I would remember if it had happened.

SNOOPY

[Rawz]

That's right Snoopy, that shareholder could be a trust and if Alistair is sole trustee of the trust it shows correct in the companies register.

[blackie]

I know this has been mentioned before but thought it was a good reminder for the thread.. the registration costs for a used import has gone from $200 to $2500 and it is killing the used car dealerships. I was talking to one yesterday and the owner was ripping into the government lamenting how much it was hurting his business.

All good for TRA who of course source most of their vehicles from within NZ. From leasing companies, private companies, repossessions, personal etc etc

This is why TRA auto business recently reported growth of 13% in a shrinking market. I expect this market share growth to continue

absolutely agree.
i service a compliance center in dunedin that gives freshly imported 2nd hand cars the once over before they are distributed out to various car yards.

usually their yard and driveway are packed to the gunnels with new imports.

but 4 x weeks ago it was so empty i asked the boss if he was closing down.

he said that with the new taxes the imports have practically stopped overnight and he said he knew of several 2nd hand car yards that have decided to shut shop on the back of this.

[Baa_Baa]

absolutely agree.
i service a compliance center in dunedin that gives freshly imported 2nd hand cars the once over before they are distributed out to various car yards.

usually their yard and driveway are packed to the gunnels with new imports.

but 4 x weeks ago it was so empty i asked the boss if he was closing down.

he said that with the new taxes the imports have practically stopped overnight and he said he knew of several 2nd hand car yards that have decided to shut shop on the back of this.

The government has already implemented the 'clean car discount' which lands squarely on the buyer. The importer/seller levy's the buyer of a car (used or new) a tax if it's 'dirty' (ICE) or a credit' if it's 'cleaner' (EV, PHEV etc).

They're also about to implement the 'clean car standard' which directly (they assume) hits the importers of used and new lightweight vehicles, <3000kg, except motorcycles which they very recently exempted with an amendment to the legislation and an extension to the time to fully implement out to June 2023.

These debits and credits are still a work in progress as it relates to the CO2 emissions calculations per vehicle, of which the MOT are currently the source of truth, and the calculator, albeit pretty vague and wobbly because their source data is also vague and wobbly. Basically it relies on the vehicle industry to supply valid vehicle emissions data. Good luck with that when you consider how many of them have gamed the emissions calculations and are now in legal suits.

But it's only less than a month away before it's partially implemented on 1 Jan 2023 (legislation said so), then the credits and debits start accruing. Importers can pay the 'deficit' as they go or accrue and pay/credit later, which will probably be around June 2023.

Importers will gain credits for clean cars and debits (penalties) for dirty cars that they import. Do you think they'll pass these onto the buyer? Of course they will for debits, but yeah right for credits.

But that will change buyer behaviours which is exactly what the government want with this social engineering policy and legislation, to convert importers and buyers to 'clean' vehicles (credits or discounts) from 'dirty vehicles (debits and penalties).

On the face of it, despite whatever well intended ambitious policy is behind it, this is free-market manipulation and blatant social engineering, and society will decide whether it is sustainable at next election.

[RTM]

absolutely agree.
i service a compliance center in dunedin that gives freshly imported 2nd hand cars the once over before they are distributed out to various car yards.

usually their yard and driveway are packed to the gunnels with new imports.

but 4 x weeks ago it was so empty i asked the boss if he was closing down.

he said that with the new taxes the imports have practically stopped overnight and he said he knew of several 2nd hand car yards that have decided to shut shop on the back of this.

Wonder what effect this will have on Ports of Auckland ? Already a drag on ratepayers, I guess this makes them even less profitable.

[Ricky-bobby]

Are we going back in time? Tax on imports, next import licences! Cuba here we come. Agree, more great news for TRA holders!

[BlackPeter]

Are we going back in time? Tax on imports, next import licences! Cuba here we come. Agree, more great news for TRA holders!

Only if NZ starts to build their own new cars ...

[bull....]

if anyone interested in how used car prices are tracking here's an index that tracks it

https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html

its US based so of use if you believe other markets follow what happens there

on a side note i used turners to sell one of my cars for cash offer , a 16 yr old car i hardly ever used with low km's and i was very impressed with the offer. ( it had actually doubled in price from covid 2020 lol )
the salesman i doubt with was very professional and the transaction very easy and quick. top marks to turners for service

[Jaa]

if anyone interested in how used car prices are tracking here's an index that tracks it

https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html

its US based so of use if you believe other markets follow what happens there

on a side note i used turners to sell one of my cars for cash offer , a 16 yr old car i hardly ever used with low km's and i was very impressed with the offer. ( it had actually doubled in price from covid 2020 lol )
the salesman i doubt with was very professional and the transaction very easy and quick. top marks to turners for service

Interesting, would have thought 16yrs was getting a bit old for them. Securing what supply they can I guess. Let us know what they list it for.

[Jay]

I sold them a nearly 20 year old car, not that you would know to look at it, with only about 100,000 K's on the clock, probably sold for about 3 times what they paid us. Forgot to look to see what they did list it for

[peat]

all these rail shutdowns in Auckland over the next year have to be really good at destroying peoples confidence in public transport. (and so encouraging people to buy a car).

[BlackPeter]

all these rail shutdowns in Auckland over the next year have to be really good at destroying peoples confidence in public transport. (and so encouraging people to buy a car).

You might be right ... but you make that sound as if this would be a good thing?

[blackcap]

You might be right ... but you make that sound as if this would be a good thing?

Off course its a good thing. Public transport is horrible and inefficient. Time to get rid of it where possible.

[BlackPeter]

Off course its a good thing. Public transport is horrible and inefficient. Time to get rid of it where possible.

Public transport as we have in Auckland is horrible and inefficient, I give you that. Same is true for Wellington and Christchurch. However - if we decide to go away from fixing everything with No. 8 wire, than we well might be able to implement at least in our centres a public transport system which is nice, cheap and efficient.

Many foreign centres have much better public transport than ours ... hey, we could do it as well!

Great public transport e.g. in Munich (similar size like AKL) - and Singapore's system is just outstanding.

But we degress from the thread. My apologies.

[ronaldson]

Unfortunately, the mantra actually underpinning the provision of public transport is to facilitate decarbonisation, rather than to promote efficiency. Only when we have a clear majority of EVs or hybrids on the roads and that argument can't be made any longer will a real focus on efficiency prevail.

And for those who know Auckland, Mayor Brown is right that a "joined up" solution needs to be planned for the City rather than ad hoc projects representing some politicians' platform for election and funded piecemeal.

[peat]

You might be right ... but you make that sound as if this would be a good thing?
Good for Turners is what I’m suggesting

PT is good for society and pollution but personally I’ve always called catching the bus as going on ’the loser cruiser’ but I know that’s mean and hurtful and I shouldn’t say it.

it’s just hard to believe how long suffering rail users are and by the time it’s working reliably - which, on the basis of history will be never - they will have alienated all except the most desparate users

[Onemootpoint]

For good or ill, these serious rail works and shutdowns seem to be planned as far as 2025 and may indeed impact how people wish to commute.

[ronaldson]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

[Beau]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

Bought a top up also at $3.35 yesterday, just building slowly over time to give that bit extra with those quarterly dividends. With Turners steadily opening new yards taking up market share looking good for future.

[Rawz]

Bought a top up also at $3.35 yesterday, just building slowly over time to give that bit extra with those quarterly dividends. With Turners steadily opening new yards taking up market share looking good for future.

I agree and Oxford should have better numbers in the coming years.

[BlackPeter]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

Might be just the rising fear in the US markets ... however, it is worthwhile to remember that share trader members - as anybody else - get it sometimes right and sometimes wrong. While their picks are in some years quite good, in others they perform dismal. Unfortunately - one only can assess with the benefit of hindsight whether this particular feeling was an accurate one or one of the other sort :) ;

[Muse]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

Hi Ronaldson - have been reading your excellent posts on a variety of companies these last few months with interest.

I rather like TRA as well and have been taking the occasional nibble as sentiment erodes the SP (and indeed buyer demand has been woeful). It's an interesting dynamic - investors like the share price at a higher price and buy then, but when it declines but still performs the same no one wants to buy.

I believe it's got an excellent management team, an excellent 'fit for purpose' business model (particularly in this environment), operating in an okay/goodish industry (car dealerships don't do much for me, but secured lending on cars and insuring them, does). Industry wide used car sales have dropped meaningfully this calendar year as new car sales rebounded as supply chains eased. But its been a classic case of TRA being able to open new sites and grow marketshare which has so far kept its aggregate sales more or less in line with 2021. The used car industry gets caught up in regulatory turbulence, both positively and negatively. Increased taxes on 'dirty' new & used cars starting 1 January will probably cap some of that new car demand and drive used vehicle prices up again. I admire that it owns and develops its own land which I think is critical for a business of this nature

TRA operates a very good car finance business and while arrears are very low and its credit performance has improved significantly in recent years its borrowing costs are only about 50% hedged so I reckon its very likely its NIM will get compressed and segment NPBT will fall. People will rightfully wonder about future impairments but worth remembering TRA still carries a ~$2m covid provision it can unwind to offset other macro related increases.

Its insurance business benefits in a rising interest rate environment which provides a natural hedge on the unhedged position in TRA's finance book. Finally it has a credit collection business which to me doesn't seem like a natural fit for the company but not a bad one to own, a bit countercyclical, but rather small.

I'd be delighted if the company could keep its npbt at ~$40m the next few years before reaching mgmt's $50m target in 3-4 yrs.

From my own portfolio's perspective, while TRA might not provide a 5 banga in capital value I do reckon it'll provide excellent imputed dividends that will grow in the medium term together with the prospect of modest capital value appreciation over the long term.

[ronaldson]

Thanks for the kind words FM.

I am an Auckland Branch member of NZ Shareholders Association, to acknowledge their efforts to enhance governance on the NZX and in capital markets, but also to participate in the regular visits to local listed entities that one dedicated member tries to arrange every couple of months. In October 2020 Covid meant the meeting scheduled with Turners occurred at the Yacht Club on Tamaki Drive and rather surprisingly Todd Hunter brought his entire management team to present to us on that occasion. Based initially upon that experience, I share your view about the quality of management, and the direction and diversity of what has proven to be a more resilient business than many might have anticipated given the pandemic circumstance (and you don't mention their car subscription activity which is embryonic but gaining traction, where you can rent a used vehicle by the month, which fills a niche between the standard short-term Avis/Hertz type hire and longer term vehicle leasing or lease to buy contracts, an example of leveraging attributes the business already had ).

When you have a national geographic footprint, as Turners has developed/is developing in NZ, you get maximum benefit from brand advertising such as the terrific Tina from Turners campaign, not available to competitors. And they are focused upon ensuring shareholders are rewarded via steadily increasing imputed dividends which seem reasonably secure, so very investable especially if income is important (and paid quarterly too).

In fact, I was inspired enough to purchase a small number on my wife's behalf that very afternoon and have followed the Company closely ever since. Looking back, the purchase price then was $3.45 so capital gain since has been muted/nonexistent, but I find such minor holdings whilst diversifying a portfolio only in the most nominal sense do cause a focus which can influence subsequent investment decisions with regard to that entity, so have extra value for that reason.

[Muse]

In fact, I was inspired enough to purchase a small number on my wife's behalf that very afternoon and have followed the Company closely ever since. Looking back, the purchase price then was $3.45 so capital gain since has been muted/nonexistent, but I find such minor holdings whilst diversifying a portfolio only in the most nominal sense do cause a focus which can influence subsequent investment decisions with regard to that entity, so have extra value for that reason.

Same same - the last few years have been doing this. Small enough that if it goes the wrong way for a period of time you it causes no bother, and when it goes well you feel positive about it. In either case, your future investment decisions will be all the better informed because you got just enough skin in the gain to get and stay interested and learn more about the company. It takes time to learn about a company and how the market perceives it...using the pea shooter first while saving the bazooka for later a strategy I reckon has merit.

[winner69]

TRA share price heading back to where it was 2 years ago


Hope it doesn't go sub 3 bucks

[Snow Leopard]

Keep an eye out for another inverse bell curve pattern developing.
The last one worked so well.

Disc: hold.

[winner69]

Keep an eye out for another inverse bell curve pattern developing.
The last one worked so well.

Disc: hold.

That's right Snowie ..... definitely check it out

Happy New Year to you ...cheers

[Balance]

Sign of the times?

Waiting list for a new Toyota hybrid was 9 months last year.

Friend just offered a new one in January.

[ronaldson]

Buy interest as good as non-existent currently. Still, at say, $3 the fully imputed yield would be 7.66% and that would have to mean something to somebody so should represent a genuine floor price.

I looked again at the half year result (to 30 Sept) announced late November. One interesting comment is that the number of registered dealers in NZ (ie the competition) are currently at the lowest level in 9 years, and the NZ used car market volume is down 7.5%. Despite (or because of) that Turners market share is increasing quite significantly, from mostly locally sourced vehicles (which I note is the emphasis of the Tina advertising!), and further expansion in Timaru, Napier and Tauranga is planned to complete during FY24.

Dividend guidance for FY23 is maintained at 23cps, the majority to be declared in relation to the second half as is normal for TRA.

I intend to remain holding (see 7631#).

[BlackPeter]

Buy interest as good as non-existent currently. Still, at say, $3 the fully imputed yield would be 7.66% and that would have to mean something to somebody so should represent a genuine floor price.

I looked again at the half year result (to 30 Sept) announced late November. One interesting comment is that the number of registered dealers in NZ (ie the competition) are currently at the lowest level in 9 years, and the NZ used car market volume is down 7.5%. Despite (or because of) that Turners market share is increasing quite significantly, from mostly locally sourced vehicles (which I note is the emphasis of the Tina advertising!), and further expansion in Timaru, Napier and Tauranga is planned to complete during FY24.

Dividend guidance for FY23 is maintained at 23cps, the majority to be declared in relation to the second half as is normal for TRA.

I intend to remain holding (see 7631#).

I guess the question is how the next year will go for them. How will markets react to the promised recession as well as to government increasing thumbscrews for polluters? Any risk that loans turn bad when people can't afford anymore the increased cost for mortgage plus the car loan?

SP was in March 2020 below $1.20. Will we see that again?

[blackie]

I think that the massive reduction of imported used vehicles must also effect TRA. colloquially my local branch has seen a reduction of 200 imports across the block per month to 10!!!

[Ricky-bobby]

These guys are my biggest hold. the general tone of the last couple of announcements have got me feeling that things are really slowing down for them. There wasn’t the usual bullish tone from Todd…. And even the chat on this forum has been so. Hoping to be proven wrong in the next announcement! I would like to buy more, but will hold for now I think.

[Ggcc]

These guys are my biggest hold. the general tone of the last couple of announcements have got me feeling that things are really slowing down for them. There wasn’t the usual bullish tone from Todd…. And even the chat on this forum has been so. Hoping to be proven wrong in the next announcement! I would like to buy more, but will hold for now I think.
It is better to be cautious in times like these. I feel Todd has always underestimated and over delivered. I must admit we are heading into some uncertain turbulent times and having some cash available is a must.

I’m not planning on selling in a hurry, but very cautious to accumulate more without some more up to date news no matter how cheap I feel they are getting.

[Perky]

These guys are my biggest hold. the general tone of the last couple of announcements have got me feeling that things are really slowing down for them. There wasn’t the usual bullish tone from Todd…. And even the chat on this forum has been so. Hoping to be proven wrong in the next announcement! I would like to buy more, but will hold for now I think.


That’s my gut feel too. Well run business and gaining market share but it’s been tailwinds and if things like interest rates, unemployment, fuel prices all go up and inflation is a bit sticky in NZ it could be tough going. I don’t own any but I wouldn’t mind buying some but I’m personally just going to wait until it clear interest rates are peaking. A lot of good dividend share are being re rated by the market as interest rates keep increasing

If your a buy and hold investor who believe in them long term I reckon you just hold and let us punters take the risk we miss the boat when the tides turns. The imputed div gives you some safety at the moment but my gut is they trade a bit lower yet.

[Rawz]

Great company, 2nd biggest holding under HLG. Not selling any for the next decade or until they have 50+ branches (same as Toyota). Keen to buy more when it’s really cheap. Let’s see how low it goes

Finance division performed not the greatest recently. I expect that to improve over the coming years.

Consistent EPS growth will re-rate TRA. Look at the multiples briscoes gets vs the other retailers due to their consistent eps growth

[Rawz]

Why would anyone invest in a 5 year term deposit when they can buy TRA? Yield is better and better get it will grow!

The banks must be laughing all the way to the bank

[Grimy]

Share price down 26% on a year ago could be one reason......
I'm happily holding (and recently added to) TRA and 3 bank stocks.
Not laughing yet, but not crying either.

[Rawz]

5 year term… no chance the bank term deposit wins vs TRA

[BlackPeter]

Why would anyone invest in a 5 year term deposit when they can buy TRA? Yield is better and better get it will grow!

The banks must be laughing all the way to the bank

There is clearly a different risk factor attached to these two options. Remember - higher risks equal higher rewards (if everything goes right), but as well higher potential for losses if it doesn't.

I could think about a lot of risk factors which, if they eventuate, might reduce TRA's dividend payments over the coming five years. Can't you?

No doubt - the market currently considers the risks differently than you do. While this is no problem, if you turn out to be right ... it might be if the markets are right :) :

[BlackPeter]

5 year term… no chance the bank term deposit wins vs TRA

Its not that long ago that the TRA share hoovered slightly above one dollar ($1.13 to be exact). If this happens again (I am not saying it will, but clearly - it might) - the 5 year term bond holders will laugh all the way to the bank.

[Balance]

5 year term… no chance the bank term deposit wins vs TRA

Actually if you are looking for yield and a safer play over a 5 year time frame, try the power companies like CEN & MEL - you will find they have easily outperformed the likes of TRA.

[alokdhir]

Actually if you are looking for yield and a safer play over a 5 year time frame, try the power companies like CEN & MEL - you will find they have easily outperformed the likes of TRA.

And much less risky too ....

[Rawz]

Its not that long ago that the TRA share hoovered slightly above one dollar ($1.13 to be exact). If this happens again (I am not saying it will, but clearly - it might) - the 5 year term bond holders will laugh all the way to the bank.

No point in throwing out the covid low as a 'what if' when looking at the end result of 5 year TRA investment vs term deposit.. statistically whats the odds of a black swan event happening at the end of 5 years?

The reality is TRA brand recognition is growing within households (thank you Tina)
Market share is growing
Finance book is growing
Insurance is growing.

They have a long runway of growth ahead of them with branch expansion throughout NZ.

Basically in my eyes if you think NZ GDP is going to be higher in 5 years time vs today.. its a buy for TRA! Collect the gross dividend of 9.5% which absolutely smokes the term deposit in itself and then take whatever capital gain there is to be had. Im expecting close to 100% after 5 years from today.

Insiders recently buying is the cherry on the cake

[Muse]

And much less risky too ....

yes defo less risky, but with oslow hanging over the markets head are the prospective yields of 3.5% (MEL) and 4.5% (CEN) appropriate in light of something that could have a marked impact on the market structure, especially in light of where interest rates are? Dont get me wrong I'm a long time contact and genesis shareholder, and not convinced onslow will happen, but in terms of deploying new capital there are interest rate products that are looking increasingly attractive and I'm not sure I feel compensated for the onslow risk at current SP's (except for potentially genesis)

[alokdhir]

yes defo less risky, but with oslow hanging over the markets head are the prospective yields of 3.5% (MEL) and 4.5% (CEN) appropriate in light of something that could have a marked impact on the market structure, especially in light of where interest rates are? Dont get me wrong I'm a long time contact and genesis shareholder, and not convinced onslow will happen, but in terms of deploying new capital there are interest rate products that are looking increasingly attractive and I'm not sure I feel compensated for the onslow risk at current SP's (except for potentially genesis)

I fully agree with your thoughts ...did not mention GNE as its different beast then CEN / MEL ...but I was comparing risk profiles of TRA with electric companies . Somehow I feel TRA is a much riskier business for reasons beyond me ...just my perception of used car market and its moat value etc ...just like covid helped FPH /MFT etc ...it helped TRA also ...making its stock rise in value ....opposite can happen if the stock goes obsolete with IC engine cars get closer to being banned for new sales and freight etc gets back to fully normal levels for imports etc ...Car insurance commissions / Car finance commissions are dependent on main business of used car sales doing well ....depending or having enormous faith in long term expansion of used car business / trading is risky ...imo

[BlackPeter]

No point in throwing out the covid low as a 'what if' when looking at the end result of 5 year TRA investment vs term deposit.. statistically whats the odds of a black swan event happening at the end of 5 years?

The reality is TRA brand recognition is growing within households (thank you Tina)
Market share is growing
Finance book is growing
Insurance is growing.

They have a long runway of growth ahead of them with branch expansion throughout NZ.

Basically in my eyes if you think NZ GDP is going to be higher in 5 years time vs today.. its a buy for TRA! Collect the gross dividend of 9.5% which absolutely smokes the term deposit in itself and then take whatever capital gain there is to be had. Im expecting close to 100% after 5 years from today.

Insiders recently buying is the cherry on the cake

Look, I feel your excitement for TRA - and good on you.

I agree as well that TRA is a well managed company, I hold high regards for the CEO and the CFO ... not quite as high on some board members, but this is a different story.

Having said that - TRA is (as we all know) basically a finance company with a used vehicle dealership and some insurance company attached.

Now - NOBODY (and I mean NOBODY) is able to predict how the business for finance companies will develop over the next five years, but - if the past is an indicator, there will be ups and downs ... and it is unlikely the coming recession will help.

I think this is the reason that the market sees the current risks higher than you seem to do.

Will TRA survive the next recession? Likely. They survived a handful of difficult phases before, though sometimes (if you still remember the DPC phase) only "just".

Obviously - I don't know how difficult this year will become, but some retailers clearly will notice that there is less money flushing around in consumers pockets, and I suppose some finance companies will realize that as well.

Anyway - I guess we can argue until the cows come home, but I don't see them currently as cheap. Might be a classical dividend trap, time will tell.

[bull....]

used car prices fell 9% in the latest US CPI report ..... TNR on a 52 week low starting to price in NZ car price falls ?

[Rawz]

used car prices fell 9% in the latest US CPI report ..... TNR on a 52 week low starting to price in NZ car price falls ?

What’s the car prices in Finland doing?

[clearasmud]

What’s the car prices in Finland doing?
Lol, NZ car prices are already low.

[bull....]

What’s the car prices in Finland doing?

we know it will be the same everywhere as covid juiced returns on used car prices now that more normality is with us the temporary covid profits these companies enjoyed will revert back to mean. its inevitable.

[alokdhir]

we know it will be the same everywhere as covid juiced returns on used car prices now that more normality is with us the temporary covid profits these companies enjoyed will revert back to mean. its inevitable.

In a bear markets eventually all stocks go thru deep corrections as markets find some reason or another to correct all stocks ...eg MFT is doing well and still have decent growth ahead but P/E compression and fear of recession hitting it has brought at similar p/e as TRA

Apple in US has also correcting ...when strong stocks correct ...its almost end of corrections cycle

Very soon our dear BULL will actually become bullish ....:p

Already 2 days S&P 500 closed above elusive 200DSMA ...Bull what does it mean ? More rally ahead or time to fade the rally ??

[BlackPeter]

...

Very soon our dear BULL will actually become bullish ....:p

...


This must be the same day pigs learn to fly .... :) ;

Seriously - I can't remember a lot of bullish posts from this bear ... and this despite him posting throughout one of the longest bull runs in history (since the GFC).

Anyway, its always good to get as well somebody pointing out the risks. While he is not always right (none of us is), during bull runs do his posts help as well to get some balance into the picture.

balance? Did I say this :scared:

[bull....]

This must be the same day pigs learn to fly .... :) ;

Seriously - I can't remember a lot of bullish posts from this bear ... and this despite him posting throughout one of the longest bull runs in history (since the GFC).

Anyway, its always good to get as well somebody pointing out the risks. While he is not always right (none of us is), during bull runs do his posts help as well to get some balance into the picture.

balance? Did I say this :scared:

plenty of bullish posts by me over the yr's.
you are obviously only focused on my bearish posts on the nzx.
it is not my fault the nzx has no stocks that represent my bullishness on energy stocks and lately gold stocks

anyway the fact is most stocks who got a bump during covid due to unusal demand will revert to the mean as can be seen by many stocks on nzx

[BlackPeter]

plenty of bullish posts by me over the yr's.
you are obviously only focused on my bearish posts on the nzx.
it is not my fault the nzx has no stocks that represent my bullishness on energy stocks and lately gold stocks

anyway the fact is most stocks who got a bump during covid due to unusal demand will revert to the mean as can be seen by many stocks on nzx

Fair enough ... I must admit that I rarely follow gold stocks ... and I assume that with energy you are mainly referring to the old carbon based energy (like oil, gas, coal)?

So, I take it - you are more of a gold - and / or carbon bull ;) ?

Agree with your reversion comment ... some stocks will revert up to the mean and others clearly revert down to the mean.

[bull....]

Fair enough ... I must admit that I rarely follow gold stocks ... and I assume that with energy you are mainly referring to the old carbon based energy (like oil, gas, coal)?

So, I take it - you are more of a gold - and / or carbon bull ;) ?

Agree with your reversion comment ... some stocks will revert up to the mean and others clearly revert down to the mean.

and which stocks will revert up to the mean ? a2 has i guess what others?

[alokdhir]

and which stocks will revert up to the mean ? a2 has i guess what others?

U not watching FPH mate ....up almost 35% from recent bottom ....

I am really surprised how many posts we had while it was going down ...numbers like $ 10 or so were targets but not a single one when it reversed its trajectory

Some people or most people here like sensational posts only and all have favourites ...HGH/OCA down 38%/50% from top but people still love it while FPH / MFT only negative posts ....

MFT p/e is almost same as TRA p/e ...its so compelling argument but no one notices or let others know

Not complaining but jotting down my observations how it works here

[bull....]

U not watching FPH mate ....up almost 35% from recent bottom ....

I am really surprised how many posts we had while it was going down ...numbers like $ 10 or so were targets but not a single one when it reversed its trajectory

Some people or most people here like sensational posts only and all have favourites ...HGH/OCA down 38%/50% from top but people still love it while FPH / MFT only negative posts ....

MFT p/e is almost same as TRA p/e ...its so compelling argument but no one notices or let others know

Not complaining but jotting down my observations how it works here

think i mentioned under 20 fph was not bad value , i didnt buy any though ( my bad ) so probably why i didnt comment. i could have commented how good my pick was for a buy though i guess lol

[alokdhir]

think i mentioned under 20 fph was not bad value , i didnt buy any though ( my bad ) so probably why i didnt comment. i could have commented how good my pick was for a buy though i guess lol

Was not complaining buddy ...just observing and learning how to use the knowledge and opinions being dished out here ...:p

[BlackPeter]

and which stocks will revert up to the mean ? a2 has i guess what others?



We are deviating from the thread - and it depends as well on your time horizon.

But yes, I agree with the by alokhir suggested FPH. I see as well transport (particularly MFT) and I am holding / accumulating as well REITS (property syndicates as well as retirement villages) ... but latter might take still a bit of time (give or take a year) until they reached the property bottom. Overseas - plenty of companies building great stuff (like cars :) ) or useful chemicals are incredibly cheap and on an uptrend.

Maybe the car uptrend I talked about will help TRA as well (here we are back on track) ... but personally I assume that they first will need to get through the bottom of the promised recession (i.e. it will get worse before it gets better).

No view on A2 - any prediction on that is in my view pure speculation.

[blackie]

smaller (30-40 cars) car yards are closing up shop in increasing numbers now. very noticeable

[Jonette]

smaller (30-40 cars) car yards are closing up shop in increasing numbers now. very noticeable
Turners actually comment on this using a Monthly Reoprt datasheet they send out. The number of dealers was a specific topic a few months ago, it dropped below 3000 for the first time for many years, its now further down to 2,940.

There are of course a very large number of "home-dealers" selling directly on trademe from a private home - I came across one in rural Otaki with about 15 cars in the long grass, mostly less than 10 years old. These must be finding it tougher as the market is changing in response to cash availability.

Fewer registered dealers opens opportunities for Turners as the smaller dealerships are less able to compete in the typical lead up to Xmas when sales increase.

[winner69]

Turners actually comment on this using a Monthly Reoprt datasheet they send out. The number of dealers was a specific topic a few months ago, it dropped below 3000 for the first time for many years, its now further down to 2,940.

There are of course a very large number of "home-dealers" selling directly on trademe from a private home - I came across one in rural Otaki with about 15 cars in the long grass, mostly less than 10 years old. These must be finding it tougher as the market is changing in response to cash availability.

Fewer registered dealers opens opportunities for Turners as the smaller dealerships are less able to compete in the typical lead up to Xmas when sales increase.

How do one get this Monthly Report Sheet …..or is it secret squirrel stuff?

[Jonette]

How do one get this Monthly Report Sheet …..or is it secret squirrel stuff?
No, its shared, you have to subscribe to be told its updated, but it's here

https://www.turners.co.nz/globalassets/terms-and-conditions/market-report-cars---december-2022.pdf

[Jonette]

14434

This chart (data from Waka Kotahi) is a comparison of second hand cars re-registered by traders vs the rest of the market. ie simply registered traders market share

its clear that traders do better as the year progresses., this year a little bit worse but caught up previous years in Dec. Note the scale, its done to exaggerate the differences which are quite small

[winner69]

No, its shared, you have to subscribe to be told its updated, but it's here

https://www.turners.co.nz/globalassets/terms-and-conditions/market-report-cars---december-2022.pdf

Thanks Jonette

[blackie]

thank you Jonette. heaps of interesting data and graphs in those links

[Jonette]

If you find the Waka Kotahi data interesting, then try this. But it's a brain teaser, I'm not yet convinced of its value, but it may have enabled me to estimate TRA sales reasonably well over the last 4 quarters. Turners seem to manage stock very tightly to sales rates, achieving good returns when the market is tight or loose.
NB: This is simply a measure of supply, comparing NZ Market supply with Turners supply. Recall that Turners makes hay from buying stock of rental cars from various companies, that means they have lumpy stock increases, with a flow-on impact.

https://datawrapper.dwcdn.net/GeaXh/27/

If I add the sales data from Waka Kotahi, it gets a bit overloaded, but makes no sense to me yet, partly because their data is quarterly and delayed. However I expect the relationship between sales rates and stock turnover is more complicated than "it takes about a month to sell a car"

[ronaldson]

Judging by some of the video/photos there could be an increase in used car sales between now and end February, especially in Auckland, as folk replace flood damaged write offs. Most people who had a vehicle in that circumstance will feel they need to continue to own one, and any insurance payout will be reinvested in a replacement fairly promptly.

But Auckland private market buyers in particular will need to be vigilant for a year or two to be sure they are not getting a lemon resulting from this event.

[percy]

Judging by some of the video/photos there could be an increase in used car sales between now and end February, especially in Auckland, as folk replace flood damaged write offs. Most people who had a vehicle in that circumstance will feel they need to continue to own one, and any insurance payout will be reinvested in a replacement fairly promptly.

But Auckland private market buyers in particular will need to be vigilant for a year or two to be sure they are not getting a lemon resulting from this event.

I expect a lot of the water damaged cars will turn up through out the country.
Turners staff should be able to spot them.
Damp [carpet ] smell in car or boot usually gives them away.

[winner69]

Apparently most cars that get half or more submerged are writeoffs …..water and air bag mechanisms don’t mix ,,,,,,and then issues with brakes/gear boxes.

Lots on replacement cars need methinks

Disc. I know v were little about the mechanics of cars.

[percy]

Apparently most cars that get half or more submerged are writeoffs …..water and air bag mechanisms don’t mix ,,,,,,and then issues with brakes/gear boxes.

Lots on replacement cars need methinks

Disc. I know v were little about the mechanics of cars.
For you winner69
https://www.youtube.com/watch?v=F0KMlSxURJk

[Sideshow Bob]

Apparently most cars that get half or more submerged are writeoffs …..water and air bag mechanisms don’t mix ,,,,,,and then issues with brakes/gear boxes.

Lots on replacement cars need methinks

Disc. I know v were little about the mechanics of cars.

I think the big problems will be all the electronics/electrics, especially on the newer cars.

Cars aren't really designed to swim.....;)

Will be a number of punters with a cheque from their insurance company looking for a replacement car.

[Azza]

I think the big problems will be all the electronics/electrics, especially on the newer cars.

Cars aren't really designed to swim.....;)

Will be a number of punters with a cheque from their insurance company looking for a replacement car.

Yes definitely issues with electronics, car manufacturers love using wasted space under seats and in the bottom of the boot for things like the srs (airbag/ safety restraint system) computers or the body control modules, as soon as these have water inside for a few days they will chose to let the smoke out which is hard to place back. This will create a surge in the used market around the north island as it did with the Napier floods a couple of years ago.

[ronaldson]

The market announcement by NZA (2 Cheap Cars) today is worth a read, and some reflection in context given the similarities with TRA.

My interpretation is that the used car market in NZ is now gradually consolidating away from the numerous small ad hoc dealerships that have thrived in the past as a result of ease of entry to the industry, and that the future will see continued incremental gains for the larger mature cross-country and more diversified businesses that TRA and NZA represent. This will take time but current evidence is that transition is underway and the NZX listing of these two entities will only serve to make this more transparent via their reporting obligations.

[BlackPeter]

The market announcement by NZA (2 Cheap Cars) today is worth a read, and some reflection in context given the similarities with TRA.

My interpretation is that the used car market in NZ is now gradually consolidating away from the numerous small ad hoc dealerships that have thrived in the past as a result of ease of entry to the industry, and that the future will see continued incremental gains for the larger mature cross-country and more diversified businesses that TRA and NZA represent. This will take time but current evidence is that transition is underway and the NZX listing of these two entities will only serve to make this more transparent via their reporting obligations.

Well possible. However - just looking at the share price trend ... it still might be a bit early to bank on the benefits of this development.

Discl: watching;

[percy]

Well possible. However - just looking at the share price trend ... it still might be a bit early to bank on the benefits of this development.

Discl: watching;

Still a couple of red flags that need to be sorted at NZA.
v Seeking to secure replacement finance facilities for retail trade, post 30 April 2023 and NZ Motor
Finance, after 1 October 2023
 Finalising the appointment of new auditors

[Sideshow Bob]

Still a couple of red flags that need to be sorted at NZA.
v Seeking to secure replacement finance facilities for retail trade, post 30 April 2023 and NZ Motor
Finance, after 1 October 2023
 Finalising the appointment of new auditors

interesting they say "replacement" rather than "renewal" of finance facilities....

Isn't finance one of the more profitable areas for TRA??

[percy]

interesting they say "replacement" rather than "renewal" of finance facilities....

Isn't finance one of the more profitable areas for TRA??

Correct and correct.

[Muse]

interesting to watch NZA as a look through for TRA (ta for posting ronaldson).

these two companies couldn't be more different both in terms of market positioning and quality of business

[Muse]

re the flooding in auckland - does anyone have any insight into how wrecked vehicles insured by turners could impact their insurance division? ie do they themselves have reinsurance after claims hit some excess? I know very little about the insurance side of the business

at first glance would expect this to drive demand for turner cars (assuming they themselves weren't damaged during the flooding and are available to sell) but wasn't clear if the other shoe to drop is a big dent in their insurance profits.

[Ggcc]

re the flooding in auckland - does anyone have any insight into how wrecked vehicles insured by turners could impact their insurance division? ie do they themselves have reinsurance after claims hit some excess? I know very little about the insurance side of the business

at first glance would expect this to drive demand for turner cars (assuming they themselves weren't damaged during the flooding and are available to sell) but wasn't clear if the other shoe to drop is a big dent in their insurance profits.
Ask Todd he maybe able to help

[winner69]

re the flooding in auckland - does anyone have any insight into how wrecked vehicles insured by turners could impact their insurance division? ie do they themselves have reinsurance after claims hit some excess? I know very little about the insurance side of the business

at first glance would expect this to drive demand for turner cars (assuming they themselves weren't damaged during the flooding and are available to sell) but wasn't clear if the other shoe to drop is a big dent in their insurance profits.

Good point but no disclosures so probably little impact

[BlackPeter]

re the flooding in auckland - does anyone have any insight into how wrecked vehicles insured by turners could impact their insurance division? ie do they themselves have reinsurance after claims hit some excess? I know very little about the insurance side of the business

at first glance would expect this to drive demand for turner cars (assuming they themselves weren't damaged during the flooding and are available to sell) but wasn't clear if the other shoe to drop is a big dent in their insurance profits.

Interesting point.

I guess not relevant for their motor insurance (which is basically a purchased warranty), but relevant for their comprehensive vehicle insurance. I see latter is underwritten by Vero ... i.e. I assume it is Vero who has to carry (most or all of) the losses.

Just noticed as well Vero is busy. If you look at their website it appears they are flooded by claims (probably not just from Turner customers).

[sb9]

Good set of results from Carsales (ASX:CAR) across the ditch.

[Rawz]

Is the bottom in. gee that was a fun ride downhill lol.

10% up from the 52 week low. SP above 50d and 100d moving averages

[winner69]

Just as well we are not a rich country

Throughout the rich world the young are falling out of love with cars
https://www.economist.com/international/2023/02/16/throughout-the-rich-world-the-young-are-falling-out-of-love-with-cars

[Louloubell]

Stuff news today:
More than 10,000 flood-damaged cars will be written off by insurers.

Am a long term holder and see a long and bright future for Turners.

[winner69]

Só 1,000 or more ‘extra’ sales for Turners as they get replaced

But if Turners market share grows could be 2000 more sales

Cool

[Rawz]

The Napier branch will be busy for the remainder of the year. Not only for used vehicle sales but also the insurance write off auctions

[Ggcc]

http://research.iress.com.au/IDS/old/20230227/02636623.pdf?uid=68C4E95A38BDA1081E88FA20E763137AC 51F00000BB6600B35F7E540093D250091850000&ppv=

Good to see that’s heading in the right direction

[Onemootpoint]

At least the media appear to be putting the word out to consumers on the issue:


https://www.stuff.co.nz/motoring/131351676/toyota-issues-warning-be-extra-careful-with-used-cars-after-floods

[Rawz]

FY23 Profit Guidance
Following consistent trading results over the summer months, including
ongoing strength in Auto Retail, Turners Automotive Group (NZX: TRA)
reiterates the guidance given at the HY23 results announcement. In November
we expected profits to be at or slightly above the FY22 record result. The
company is now on track for FY23 profit before tax to be at least $44.0m
(FY22: $43.1m).

Trading in Q423 has seen no significant change to the market dynamics we were
experiencing in Q3:

o Auto retail: Car sales in our business continue to hold up well, market
share continues to grow across new and existing sites, margins are stable.
Site expansion strategy working well and developing a pipeline of further
opportunities.
o Finance: The impact of a higher interest rate environment is increasing,
the expected deterioration in arrears occurred over December and January,
however the loan book is stable and arrears improved in February.
o Insurance: Claims continue to track below expectations and investment
returns improving.
o Credit: Debt load recovering, but more slowly than expected.

Our Damaged and End of Life Vehicle Division operational teams in Auckland
and the Hawke's Bay are busy supporting our insurance vendors to de-register
and sell these insurance write-offs for parts and recycling. Replacement
demand for damaged cars, combined with the supply restrictions caused by the
Clean Car Standard is expected to be inflationary for used vehicle pricing
and margins.

[Rawz]

Looks good. Its a buy!

[Louloubell]

It is good news all around for the business and my only surprise is that the share price hasn't shot up more. I topped up yesterday, more good luck than management.

[Onemootpoint]

Was there any doubt? :p Looks very positive.

[jg8512]

strong, positive announcement.

Bit surprising tbh with the housing market in the doldrums (https://www.interest.co.nz/property/120167/asb-economist-doesnt-expect-housing-market-improve-any-time-soon) 430,000 NZers behind in their debt repayments (https://www.interest.co.nz/personal-finance/120105/credit-bureau-centrix-says-current-economic-climate-putting-pressure), and interest rates at their highest level for years. For how long, can Turners keep defying the macro-economic trends?

[Ricky-bobby]

strong, positive announcement.

Bit surprising tbh with the housing market in the doldrums (https://www.interest.co.nz/property/120167/asb-economist-doesnt-expect-housing-market-improve-any-time-soon) 430,000 NZers behind in their debt repayments (https://www.interest.co.nz/personal-finance/120105/credit-bureau-centrix-says-current-economic-climate-putting-pressure), and interest rates at their highest level for years. For how long, can Turners keep defying the macro-economic trends?

It’s prob the last couple months dramas have given them enough comfort to make the announcement…

[Jonette]

Bit surprising tbh with the housing market in the doldrums (https://www.interest.co.nz/property/120167/asb-economist-doesnt-expect-housing-market-improve-any-time-soon) 430,000 NZers behind in their debt repayments (https://www.interest.co.nz/personal-finance/120105/credit-bureau-centrix-says-current-economic-climate-putting-pressure), and interest rates at their highest level for years. For how long, can Turners keep defying the macro-economic trends?[/QUOTE]

430,000 is close to 10% of the entire population, yet the article has "Consumer arrears rose to 11.9% of the active credit population". I suspect these numbers, they don't gel. Note the article chart shows the seasonal nature of debt and that at the same time in 2019, we had 12.2% in arrears, it is now only 11.9%.

Yes the property market is down, but not in the doldrums, the vast majority of owners bought before the bubble, so only interest rates impact them and rates are well below 2007 interest rates during a previous boom. My truckometer shows we are still spending flat out, so does the latest card data, so maybe we are not really in the doldrums as the RBNZ would like us to think. HH Income is growing at record rates, in some regions well above inflation, so maybe we just have the spending power.

Replacing a second hand car is not like buying a house, it is often done due to a necessity, eg the old car is bust. The rate of car deregistrations in increasing, suggesting that Turners is on a roll simply because too many people have held on to their dunger for too long.
Turners also benefited from rental company replacements a few months ago and will do from both the floods and the increase in debts - recall they have a business for credit control where they do the work for the Telco's. The linked article shows an increase in Telco debt, having that work return could be significant - recall the Telco's delayed credit controls during Covid.

[Louloubell]

Dividend of 23 cents expected this year. 5 cents received in the first quarter and 5 in the second. That leaves 6 cents upcoming in the third and 7 in the last quarter. And that is fully imputed. Yippie

[Sideshow Bob]

https://www.nzx.com/announcements/409428

Turners Automotive Group (NZX/ASX: TRA) are pleased to announce that directors have declared a Q3 FY23 dividend of 6 cents per share (fully imputed) to be paid on 27 April 2023. The record date is 17 April 2023.

[bull....]

wonder how tra doing

One segment that is now really struggling is used imports. Although they sold 9681 vehicles in March, that was -60% lower than the record high level from March a year ago (which was boosted by a rush to beat new regulations). The annualised rate of sales for used imports has dropped to just 90,300, and this is its lowest since July 2013. It was at an annual rate of 137,000 in March 2022, but that is well lower than the all-time highest annual rate of 166,000 in 2017. It is a sector that has faded markedly over the past year.

https://www.interest.co.nz/business/120625/strong-car-sales-continued-march-bolstered-government-incentives-electric-car-sales

[Louloubell]

I think Turners are doing very well indeed. There is a clear trend in a decreasing number of second hand car dealers and Turners does not rely on importing vehicles. 90% of their vehicles are locally sourced. My thinking is that these two factors compensate for the recession we are in. So, no new record revenues or profits, but steady as last year for 2023 and 2024. These are my thoughts. And, I better not be wrong, as I have Turner shares galore
😃

[Sideshow Bob]

Went ex-divvy Friday and up 5c this morning. Nice!

[Louloubell]

I managed to get a few more @ $3.33 late yesterday and today. When is enough enough?

[BlackPeter]

I managed to get a few more @ $3.33 late yesterday and today. When is enough enough?

There is no enough in the tension between greed and fear. There is only "too much" or "not enough". Only the future will provide an answer as which it was.

Personally I would consider the risk that the second hand car market and more so the car finance business might first get worse before it gets better :) - and if you look into the trend - they are in a well established downtrend (not that I am always following TA ... :) ;

[Sideshow Bob]

NZX Virtual Investor event 10th May, including Todd Hunter.

https://nzx.us19.list-manage.com/track/click?u=27bf52ec60d794bae202792e4&id=4e66f7ee37&e=baeeaaa251

[Sideshow Bob]

FY announcement 23rd of May....

https://www.nzx.com/announcements/410776

[Louloubell]

Investor presentation out today shows the ship is continuing to sail well. Matching last year's record profit, nice and reliable divvies, low pe, and a rising market share. Turners is not a cyclical business and largely recession proof. Close to 20% of my portfolio and a happy holder.

[Rawz]

Investor presentation out today shows the ship is continuing to sail well. Matching last year's record profit, nice and reliable divvies, low pe, and a rising market share. Turners is not a cyclical business and largely recession proof. Close to 20% of my portfolio and a happy holder.
SAme, my top holding and happy with it as top in these times.

here is the link https://www.nzx.com/announcements/411163

Interesting on page 5 under the 'Overview of Turners Group' they note in a box that they are the 54th largest company on the NZX by free float... must be targeting top 50 at some stage aye. Its a question of when not if in my mind

[Rawz]

Key Messages (from the preso):

1.Continue to produce robust and reliable earnings, despite macro challenges Following a number of strategic initiatives, and focus on de-risking, Turners continues to produce reliable and consistent earnings and a sustainable dividend yield. Auto and Insurance are growing strongly offsetting the impact of the interest rate environment on Finance.

2.Continue to grow market share in key auto retail segment With more branches in the pipeline, customers turning to “trusted” brands in times of uncertainty and a diversified sourcing model Turners is well positioned to widen its competitive moat in the used vehicle segment.

3.Used car market is mostly needs based…lots of market resilience in this segment 20% of NZ vehicle fleet is 20 years or older…this is over 830,000 cars that are at the end of their life.

4.We are very conscious of NZ and global economic challenges over the next 12-24 months We are aware of the challenges and still have clear plans to mitigate these. We still see opportunities in the markets we operate in, and are well positioned to take advantage of these. The strong will get stronger.

[Muse]

Said it before and I'll say it again - TRA is a blue chip business and a high quality stock.

[BlackPeter]

Said it before and I'll say it again - TRA is a blue chip business and a high quality stock.

From investopedia:


What Is a Blue Chip?
A blue chip is a nationally or internationally recognized, well-established, and financially sound company that is publicly traded. Blue chips generally sell high-quality, widely accepted products and services.

Blue chip companies have reputable brands that have been built and maintained over many years. That and the fact that they have weathered multiple downturns in the economy make them stable companies to have in a portfolio.

Blue chip companies operate profitably despite adverse economic conditions, which helps to contribute to their long records of stable and reliable growth.

Actually - I realise many people in this thread love TRA, and I, while not in love with them, do respect their management. Their board is a different point of discussion, though.

Anyway - "blue chip" appears a bit over the top, isn't it? - I guess after all - they are a used car dealer with their own finance company, and they nearly did bite the dust in the last big downturn (at that stage still called "Dorchester Pacific" and destroying hundreds of millions of shareholder value - though, yes, they survived by running a hotel. Flexible they clearly are ...).

But Blue Chip? - Is this like "World Famous in New Zealand"?

[Muse]

Yes I appreciate the irony of it being centred around used car sales and my view of it. Blue chip might be a smidge generous in that respect (IE not in the same externally viewed esteem as the likes of EBO, SKL, FPH etc) but I do believe its got a fit for purpose business model (integrated across dealership, finance, insurance, debt collection, with the best sourcing model in NZ, leading marketing, and property portfolio and site development programme) and a growing footprint allowing it to take share, management alignment with shareholders, focus on profitability and dividend distribution evidenced by being one of the few companies to make quarterly distributions, etc. So I retain my view that its a high quality stock and a high quality business, and am happily able to look through the 'used car veneer' into the underlying business and financial characteristics of the business.

But re your investopedia definition:
1) TRA have a dominant national position and brand within the used car segment
2) It has high customer satisfaction and sells widely accepted products and services
3) It does have a good and reputable brand that has been built and maintained over many years - has made great strides in developing the Turners Automotive brand over the last 5 years
4) It is operating very well despite adverse economic conditions (record year profits in FY23)

Seems like a tick against most of them?

[Jonette]

Yes I appreciate the irony of it being centred around used car sales and my view of it. Blue chip might be a smidge generous in that respect (IE not in the same externally viewed esteem as the likes of EBO, SKL, FPH etc) but I do believe its got a fit for purpose business model (integrated across dealership, finance, insurance, debt collection, with the best sourcing model in NZ, leading marketing, and property portfolio and site development programme) and a growing footprint allowing it to take share, management alignment with shareholders, focus on profitability and dividend distribution evidenced by being one of the few companies to make quarterly distributions, etc. So I retain my view that its a high quality stock and a high quality business, and am happily able to look through the 'used car veneer' into the underlying business and financial characteristics of the business.

But re your investopedia definition:
1) TRA have a dominant national position and brand within the used car segment
2) It has high customer satisfaction and sells widely accepted products and services
3) It does have a good and reputable brand that has been built and maintained over many years - has made great strides in developing the Turners Automotive brand over the last 5 years
4) It is operating very well despite adverse economic conditions (record year profits in FY23)

Seems like a tick against most of them?

Agree.

However I would put it differently in "fit for purpose" Yes they are, but it is more than that, each business supports the other businesses in their portfolio. ie it is an excellent example of running an "Ecosystem" of selling and supporting car ownership, including their new subscription business.

Note the release is clearly to allow Todd Hunter to comment more freely in his presentation/involvement in the NZX Virtual Investor event he is scheduled for in 10 minutes

[Rawz]

NZX Virtual Investor event he is scheduled for in 10 minutes

can someone please share the link for this?

[Muse]

can someone please share the link for this?

https://register.gotowebinar.com/register/7364748116393408861

[BlackPeter]

Yes I appreciate the irony of it being centred around used car sales and my view of it. Blue chip might be a smidge generous in that respect (IE not in the same externally viewed esteem as the likes of EBO, SKL, FPH etc) but I do believe its got a fit for purpose business model (integrated across dealership, finance, insurance, debt collection, with the best sourcing model in NZ, leading marketing, and property portfolio and site development programme) and a growing footprint allowing it to take share, management alignment with shareholders, focus on profitability and dividend distribution evidenced by being one of the few companies to make quarterly distributions, etc. So I retain my view that its a high quality stock and a high quality business, and am happily able to look through the 'used car veneer' into the underlying business and financial characteristics of the business.

But re your investopedia definition:
1) TRA have a dominant national position and brand within the used car segment
2) It has high customer satisfaction and sells widely accepted products and services
3) It does have a good and reputable brand that has been built and maintained over many years - has made great strides in developing the Turners Automotive brand over the last 5 years
4) It is operating very well despite adverse economic conditions (record year profits in FY23)

Seems like a tick against most of them?

Are you really sure about your ticks?



1) TRA have a dominant national position and brand within the used car segment


Last time I checked they had less than 10% of the market. They might be one of the bigger used car dealers - but dominant is something different.



2) It has high customer satisfaction and sells widely accepted products and services


Is this really true? Re customer satisfaction ... If you check their google reviews - they are at best a mixed bag. Not sure what widely accepted products and services means - yes, NZ is a country where its widely accepted to buy used cars (instead of new ones), but this has nothing to do with TRA.



3) It does have a good and reputable brand that has been built and maintained over many years - has made great strides in developing the Turners Automotive brand over the last 5 years


Not quite sure, how you measure that. Do you just go based on the company presentations? I can't remember that they feature as top dealer in the consumer magazine and I can't remember any of my acquaintances recommending to buy there.

If I am on the market - their cars never made it even on my shortlist, and the couple of times I went there just to see what people on this thread are raving about, I was disappointed and again - they never made it so far that I even wanted to test drive any of the cars I've seen there.


4) It is operating very well despite adverse economic conditions (record year profits in FY23)


True - last year (or couple of years) have been good for them economically (as for many other car dealers - have a look at CMO) -- but this was the Covid boom. In my view a bit thin a criterium to call them a "blue chip" ...

But anyway - no worries - I wish you luck.

[Daytr]

I went to school with Todd a long time ago and played quite a bit of cricket with him. He was a year behind me but was mature for his age and was smart & always level headed. Not surprised he has done well for himself. Nice dividend returning stock and also not a bad P.E. either.
As the economy contracts and more money is sucked out to service mortgages, I wouldn't be surprised to see the 2nd hand car market do better than the new car market. Could be quite a good recessionary investment

[winner69]

BP ….suppose some see / hear only what they want to see / hear eh

Must be a scientific term for this (something better than rose tinted glasses)

[Rawz]

BP never been a believer in TRA. Maybe one day

[ronaldson]

Rawz (#7722) has appreciated perhaps the most significant comment in the presentation - that TRA is presently the 54th largest company on the NZX by free float market cap.

When you look at the effect of being admitted to/removed from the NZX 50 Index (eg HLG/ERD recently) then the potential for an upward realignment of the share price in this instance is quite high given TRA's ongoing expansion and underpinned by a regular dividend regime.

[BlackPeter]

BP never been a believer in TRA. Maybe one day

I just hope nobody here is investing based on "believe". I am certainly not - in any stock.

I invest based on facts and based on working assumptions. Working assumptions can be wrong or right, but you don't have to believe in them. To believe belongs (if anywhere) into church.

And hey, I didn't even say that I think TRA will turn out to be a bad investment (though I am not invested in them at this point in time), but your statement sounded like a declaration of love. I just tried to inject a bit of reality into the discussion. Please accept my apologies ...

While falling in love undoubtedly can be fun ... it means that the opportunities every stock has look flasher for the person in love, but it means as well, that they oversee the risks every stock has as well. Just do a statistical analysis of love stories. Some end up well, but most unfortunately turn to custard.

Love just makes it more difficult to come to a balanced (no, not that balance!) assessment, resulting later on often in unexpected (while overseen) surprises ... and these are rarely of the good sort..

But in a nutshell - while I was never a "believer"- there have been times I used to hold both Dorchester and later TRA (probably under one of their previous tickers). And yes, they always looked shiny and people did fall in love with them ... and yes, this opportunity to hold them did cost me a lot of money - so maybe I just learned my lesson and am ahead of you?

But then, maybe I learned the wrong lesson, so - who knows?

[Rawz]

I just hope nobody here is investing based on "believe". I am certainly not - in any stock.

I invest based on facts and based on working assumptions. Working assumptions can be wrong or right, but you don't have to believe in them. To believe belongs (if anywhere) into church.

And hey, I didn't even say that I think TRA will turn out to be a bad investment (though I am not invested in them at this point in time), but your statement sounded like a declaration of love. I just tried to inject a bit of reality into the discussion. Please accept my apologies ...

While falling in love undoubtedly can be fun ... it means that the opportunities every stock has look flasher for the person in love, but it means as well, that they oversee the risks every stock has as well. Just do a statistical analysis of love stories. Some end up well, but most unfortunately turn to custard.

Love just makes it more difficult to come to a balanced (no, not that balance!) assessment, resulting later on often in unexpected (while overseen) surprises ... and these are rarely of the good sort..

But in a nutshell - while I was never a "believer"- there have been times I used to hold both Dorchester and later TRA (probably under one of their previous tickers). And yes, they always looked shiny and people did fall in love with them ... and yes, this opportunity to hold them did cost me a lot of money - so maybe I just learned my lesson and am ahead of you?

But then, maybe I learned the wrong lesson, so - who knows?

I do love them for reasons said many moons ago, for a nice summary see FM post on the previous page.

No point looking too much in the past on this one. The business is just so different. So forget old lessons and certainly dont use a 10 year backward p/e ratio thingy. that will send you crook

[percy]

Todd Hunter presented well [as always] on this morning's NZX Webinar.

[BlackPeter]

No point looking too much in the past on this one. The business is just so different. So forget old lessons and certainly dont use a 10 year backward p/e ratio thingy. that will send you crook

Actually - the 10 year backwards PE is not even that bad (14.2) ;) - and I might be even able to disclose that they are at the moment on my list of potential buying opportunities. Having said that - I don't know, whether (and when / if) I am going to promote them ... there are just so many other good candidates around.

I do agree that things have changed a lot for TRA, but maybe this is as well a thing making me a bit nervous .. if things can turn within 10 (well, 15 years) from near catastrophe as finance company and just surviving hospitality business over long grinder over hope and actually a great looking plan which however never worked over depression to currently something which currently brings money, I am wondering how suitable it might be as a reliable long term investment?

You see, things don't always get better when they change, and at the end of the day its still just a currently ok-ish going used car dealer with a finance company and a somewhat funny insurance attached.

No doubt, there will be ups and downs.

[Jonette]

Are you really sure about your ticks?



Last time I checked they had less than 10% of the market. They might be one of the bigger used car dealers - but dominant is something different.



Is this really true? Re customer satisfaction ... If you check their google reviews - they are at best a mixed bag. Not sure what widely accepted products and services means - yes, NZ is a country where its widely accepted to buy used cars (instead of new ones), but this has nothing to do with TRA.



Not quite sure, how you measure that. Do you just go based on the company presentations? I can't remember that they feature as top dealer in the consumer magazine and I can't remember any of my acquaintances recommending to buy there.

If I am on the market - their cars never made it even on my shortlist, and the couple of times I went there just to see what people on this thread are raving about, I was disappointed and again - they never made it so far that I even wanted to test drive any of the cars I've seen there.



True - last year (or couple of years) have been good for them economically (as for many other car dealers - have a look at CMO) -- but this was the Covid boom. In my view a bit thin a criterium to call them a "blue chip" ...

But anyway - no worries - I wish you luck.

I think you are doing yourself a disservice. Research is important:
1) Yes they have less than 1% of the market, only about 3000 cars for sale at any point in time, but a growing turnover rate. Quicker than anyone else in the market from my research
2)Customer satisfaction is measured pretty well by simply looking at Google Search history, they even publish their interpretation in their latest update (with a lot of license). From my research, Turners Cars searches 12 month MA is on a rise from about 80 to 140/month, Used cars is not a relevant search term with Trademe, but "2 Cheap Cars" ie NZAI is, falling from 240 to 150/month over the same period. I was surprised at this, but the name Turners is not as old as 2 Cheap Cars, showing the value of branding and change happens fast. A 6 month MA has both companies with the same 130 queries/month. Try the same search history for CMO, not enough data. BTW, Turners operate in the used Car market and this is a widely accepted product, even if I never buy used cars most people in NZ do.
3)Top Dealer? Well just to summarise; The dealer you selected, CMO currently have about 300 used cars for sale, they are of course primarily a new car business and Used cars is a side hustle for them. NZAI is a bigger listed car sales yard, this time a direct competitor with only used cars and operating under their own name, "2 Cheap Cars" unlike CMO - NZAI have 500-600 in stock usually, with bursts above 700, but currently at only 350, 10% of Turners.
4)You are a sample of 1 in your visit to the dealership. My guess is that you are not statistically minded to use your own limited experience as an indicator of the market. An interesting number for you, Turners sell 38,000 cars pa, they have a stock of about 3000 cars, so turnover is about 12.7 of monthly stock, ie they sell a bit more than their stock levels each month. I recall last year is was closer to 36,000pa, yet stock remains much the same.
5) The latest market update shows that Turners have performed well for at least the last 6 years - refer to the two charts on page 6, where it shows Turners growth in 3 year columns, both in profit and dividends. (note they say they pay dividends equal to 60% of profits)

[toddhunter]

That is very kind of you to say Daytr!

[Daytr]

That is very kind of you to say Daytr!

Haha now you will have to figure out who I am. 🤣

[Louloubell]

Interesting day on the share market today for Turners, as there are virtually no sellers. Result out next week. No surprises in profit and dividend. Is the market finally starting to re-rate this company?

[winner69]

Interesting day on the share market today for Turners, as there are virtually no sellers. Result out next week. No surprises in profit and dividend. Is the market finally starting to re-rate this company?

Definitely starting to be rerated I reckon

Another record year in F24 and a $5 share price ……..just as Turners said a while ago (didn’t say ‘predict’ did I)

[alokdhir]

Definitely starting to be rerated I reckon

Another record year in F24 and a $5 share price ……..just as Turners said a while ago (didn’t say ‘predict’ did I)

Real Guru talking ...lol :p

[Jonette]

Others may find this useful.

I like to invest in companies I can follow using independent data. So I create my own data from public sources. Turners are in my words "an ecosystem company" ie they have a product - providing private transport with associated services (car sales, finance to buy, insurance and subscription rentals). Ecosystem companies tend to have better than average returns over the long term - if their management is also premium performers. I think we are not well served with understanding the last point, while Todd is excellent, who is his number 2 if he meets a bus the wrong way? who else is driving strategies and performance and how good are they?

I successfully invest in Apple and Mainfreight for the same reasons, but have a better view of management.

Here is my data (https://www.datawrapper.de/_/GeaXh/) for your use, I update the chart regularly, just sharing it because I can:

https://www.datawrapper.de/_/GeaXh/

[winner69]

Real Guru talking ...lol :p

I’m not a Real Guru or a Legend …just plain ol Speedy Az

Turners slide from 2 years ago …Roadmap to $5

They are one year ahead of achieving NPBT of $45m in F24 …will do it this year and F24 will be close to $50m

Currently on a PE of just over 9 ……..so even at $5 in a years time it will be on a PE of about 11 ….hardly demanding when you look at the profit numbers on the chart. After all Turners themselves are doing what they said they would be doing …..and the market is about to wake up from its slumber and do it’s bit.

As Loulou thinks rerating coming ..it sure looks like it is.

Hope Todd updates his chart for next week ….might even hint at a Roadmap to $6

[BlackPeter]

Others may find this useful.

I like to invest in companies I can follow using independent data. So I create my own data from public sources. Turners are in my words "an ecosystem company" ie they have a product - providing private transport with associated services (car sales, finance to buy, insurance and subscription rentals). Ecosystem companies tend to have better than average returns over the long term - if their management is also premium performers. I think we are not well served with understanding the last point, while Todd is excellent, who is his number 2 if he meets a bus the wrong way? who else is driving strategies and performance and how good are they?

I successfully invest in Apple and Mainfreight for the same reasons, but have a better view of management.

Here is my data (https://www.datawrapper.de/_/GeaXh/) for your use, I update the chart regularly, just sharing it because I can:

https://www.datawrapper.de/_/GeaXh/

Good question.

As indicated - my confidence in the board is somewhat limited.

Todd though might have a succession plan (all really great leaders do :) - not sure, though whether it would be appropriate to ask him to share that here.

Might be a good question though, for the next AGM :)

[alokdhir]

I’m not a Real Guru or a Legend …just plain ol Speedy Az

Turners slide from 2 years ago …Roadmap to $5

They are one year ahead of achieving NPBT of $45m in F24 …will do it this year and F24 will be close to $50m

Currently on a PE of just over 9 ……..so even at $5 in a years time it will be on a PE of about 11 ….hardly demanding when you look at the profit numbers on the chart. After all Turners themselves are doing what they said they would be doing …..and the market is about to wake up from its slumber and do it’s bit.

As Loulou thinks rerating coming ..it sure looks like it is.

Hope Todd updates his chart for next week ….might even hint at a Roadmap to $6

Well explained ....Real Guru stuff in my eyes ....:t_up:

[Rawz]

Well explained ....Real Guru stuff in my eyes ....:t_up:

Gurus KFL will be in here soon :cool:

[alokdhir]

Gurus KFL will be in here soon :cool:

Why not if they start thinking like u ...lol :D