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

[percy]

Your client would be a lot more profitable if he also clipped the ticket with finance and insurance,which are ongoing profit drivers.
TRA recent capital raise has not been sitting idle in a Kiwi Bank cheque account.
New car/equipment dealers sites being developed,core finance and insurance bulked up.
All the time the added bolt ons has strengthened the very strong business model,which has been made easier by Turners' great brand. .
These core improvements will lead to eps growth,which will be returned to shareholders with increasing fully imputed dividends.Making an investment decision on one year's eps,without looking fully at the business's core improvements, is a very poor short term mistake.A bit like saying SUM or RYM did not build as many units in one year as you expected,so therefore you sell out.The same sort of mistake was made by a number of people who thought HBL brought a dead duck when they brought Senior's REL.
Be prepared to be surprised,as TRA directors/management have laid the solid foundations for a really great company,by making the right decisions on where to allocate capital..

[LAC]

I think this fin year will be a good result overall but next year will be the one to watch. The timing of the last capital raise wasnt the best timing as now on paper it will show a chunk of new shares issues but not all of that capital used. Very new to this stock, but after reading their business model and the "clipping the ticket" makes it a good investment for me. Trying to move away from stocks that I need to check on very often, this one show value in the years to come hence I will accumulate at the lows.

[Marilyn Munroe]

Your client would be a lot more profitable if he also clipped the ticket with finance and insurance,which are ongoing profit drivers.


Selling commercial vehicles is different. You will most likely be selling to a business which has an existing relationship with a financier or insurer, up-selling these extras is less likely. Plus they probably have taken advice from their accountant on how much to spend before they even walk on to the yard.

Boop boop de do
Marilyn

[percy]

Selling commercial vehicles is different. You will most likely be selling to a business which has an existing relationship with a financier or insurer, up-selling these extras is less likely. Plus they probably have taken advice from their accountant on how much to spend before they even walk on to the yard.

Boop boop de do
Marilyn
And they too will be surprised that TRA will usually offer them a better deal.

[Beagle]

And they too will be surprised that TRA will usually offer them a better deal.

You're incorrigible Percy..just like I was when I was long AIR :lol:

[percy]

Especially for you.
"You're neither right nor wrong because other people agree with you.You're right because your facts are right,and your reasoning is right."
Benjamin Graham.

[Beagle]

LOL you know I like him, a real legend. On his model the PE should be 8.5 for a no growth company + 2g and EPS growth seems to be going to be 4% so if as you suggest TNR is building long term growth into its business model then the PE should be 16.5 and they're presently fundamentally mispriced on a trailing PE of about 13. The only problem with his model is when you start applying it to SUM other companies you get some really outrageous valuations which suggests either his model doesn't apply today or there's better value in SUM other places.

[LAC]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11973882

Record used cars sales in NZ:)

[percy]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11973882

Record used cars sales in NZ:)

Thank you for the link LAC.
"Turners,the nation's biggest used car dealership,says there are no signs the used car market slowing down in coming years."
No surprises there.!

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11973882

Record used cars sales in NZ:)

Needs to be considered in the context of an extra 70,000 people who migrated here last year, i.e. a similar increase in the population base. While the article is technically correct I don't believe it foreshadows any change in the real level of turnover on a population adjusted basis or a trend toward second hand over new as new vehicle sales have been growing at a much higher rate, (new might go flat in 2018 with business confidence ebbing quite a bit).
What is good is that Turners seem to be keeping their market share as their sales are up by a similar percentage.

[percy]

I always trust people who know their market.
In this case I will go with Turners.

[LAC]

Needs to be considered in the context of an extra 70,000 people who migrated here last year, i.e. a similar increase in the population base. While the article is technically correct I don't believe it foreshadows any change in the real level of turnover on a population adjusted basis or a trend toward second hand over new as new vehicle sales have been growing at a much higher rate, (new might go flat in 2018 with business confidence ebbing quite a bit).
What is good is that Turners seem to be keeping their market share as their sales are up by a similar percentage.

Thanks a fair comment, but like you say, more customers into the country for Turners to sell more vehicles who will take 4 years to pay it off.

[JeremyALD]

Yikes, closed at $2.97

[winner69]

Yikes, closed at $2.97

One of the bigger casualties of the market turmoil so far

Finance / banks not doing that well ....even the mighty Heartland is down heaps.

[Beagle]

I am sure the usual suspect will remind us of all their new dealerships including truck dealerships they've built and that the company is on track for wonderful profit growth but business confidence has tanked since Labour was elected and hasn't recovered much yet despite a lot of punters claiming it would. Now we have the markets contracting and I can see a lot of business's won't have the confidence to make large capex decisions...maybe those new truck dealerships couldn't have been built at a worse time ? None of this will stop them making a fancy profit growth announcement in due course but the sly chaps never mention EPS figures in their announcements do they ! This fools some people but doesn't seem to be fooling the market does it ! Of course if we do end up in a bear market which might even cause a recession so its felt on main street as well, customers might really start to struggle with their loans... but no worries because Turners will lend customers and business's more money to get through the bottom of the cycle, it worked for Heartland with dairy so what could possibly go wrong...

[percy]

Use d vehicle sales often trail new vehicle sales.With new vehicle sales continuing to set records,Turners will see growing used vehicle sales.
Turners' vertically integrated business model,sales,finance and insurance will prove to be sound in the years to come.
I remain "well positioned" and am enjoying their quarterly dividends.

[BlackPeter]

Chart looks terrible - finding new lows while the tide seems to rise again. RSI indicating "hopelessly oversold" but no depth on the buy side.

Start to wonder whether this could be a top up opportunity - or whether there are people out there knowing things we don't but should know?

[percy]

Chart looks terrible - finding new lows while the tide seems to rise again. RSI indicating "hopelessly oversold" but no depth on the buy side.

Start to wonder whether this could be a top up opportunity - or whether there are people out there knowing things we don't but should know?

Yes always difficult to know.
What makes it harder is the next business update and guidance, may not be until the end of March,if going by last year's is an indication.
Going from TRA's previous announcements,and the fact new car sales are still setting records, I see no reason to change my analyst of their business. I do not buy or sell on no news.
I did speak to Todd Hunter a couple of weeks ago,about lack of news on new sites opened up.Thought there should have been a "news realise" on the Wiri site in particular,and an article on what attracted Turners to Whangerei.Todd did agree they were lost opportunities.
Hopefully there will not be too many more lost opportunities.

[couta1]

Chart looks terrible - finding new lows while the tide seems to rise again. RSI indicating "hopelessly oversold" but no depth on the buy side.

Start to wonder whether this could be a top up opportunity - or whether there are people out there knowing things we don't but should know? Chart looks very similar to the CNU and SPK charts, all "hopelessly oversold" but current sentiment rules. Disc-Not holding. PS-Depends if you let your long term investment decisions be ruled by charts or not.

[BlackPeter]

Yes always difficult to know.
What makes it harder is the next business update and guidance, may not be until the end of March,if going by last year's is an indication.
Going from TRA's previous announcements,and the fact new car sales are still setting records, I see no reason to change my analyst of their business. I do not buy or sell on no news.
I did speak to Todd Hunter a couple of weeks ago,about lack of news on new sites opened up.Thought there should have been a "news realise" on the Wiri site in particular,and an article on what attracted Turners to Whangerei.Todd did agree they were lost opportunities.
Hopefully there will not be too many more lost opportunities.

cheers. Agree and shall hang in.


Chart looks very similar to the CNU and SPK charts, all "hopelessly oversold" but current sentiment rules. Disc-Not holding. PS-Depends if you let your long term investment decisions be ruled by charts or not.

True - and your post helped me to find a remedy :); Changed my chart from 1 year to 4 year horizon and feel already better;

[RTM]

http://nzh.tw/11995143

I guess this will be having an effect on the cost and availability of Turner’s imports of Japanese cars.

[Joshuatree]

Yes . im a little stunned that no port in NZ has the ability to fumigate a ship. This is nuts . We will eventually end up with all the noxious plants and pests and diseases because customs, inspection, fumigation is chronically underfunded imo. Once these things are here they usually here for good at our cost.

[percy]

Scary and crazy.!

[iceman]

Yes . im a little stunned that no port in NZ has the ability to fumigate a ship. This is nuts . We will eventually end up with all the noxious plants and pests and diseases because customs, inspection, fumigation is chronically underfunded imo. Once these things are here they usually here for good at our cost.

Agree JT this is ridiculous. I imported lots of containers of good 10-15 years ago from Europe and they all got fumigated in a warehouse on the wharf in Nelson. Crazy that we are not equipped to do whole ships with bulk cargo or cars

[JayRiggs]

Just took a nibble at 2.92.
Cmon guys, this is an amazing opportunity to buy more TRA at below the SPP capital raise price of 3.02.
Anyone who missed out on getting more in the SPP have a chance to seize them at 2.92!!!

[Snoopy]

Just took a nibble at 2.92.
Cmon guys, this is an amazing opportunity to buy more TRA at below the SPP capital raise price of 3.02.
Anyone who missed out on getting more in the SPP have a chance to seize them at 2.92!!!

Or we bondholders could wait a few months and purchase some TRA shares at $2.60. An even better deal!

SNOOPY

[Beagle]

How do you figure that one Snoops ? Its a 5% discount to the 30 day VWAP or was it a 5% discount to the $3.75..I can't remember to be honest but don't care anymore. Even if the 30 day VWAP was $2.92 that would make the price about $2.75 to bondholders but to be quite frank about it I'm no longer interested in this very low growth, (on an EPS basis), company. Bondholders chances of receiving a premium on conversion were shafted with the recent deeply discounted share issues and they are really treated as little more than an inconvenient necessity by the major shareholder in my opinion. Second class stakeholders if you like.
To be frank about it share issues are too often, too much and too deeply discounted for my liking and paucity of liquidity and almost meaningless low EPS growth leaves me completely underwhelmed.

There's SUM vastly better opportunities out there on not dissimilar PE multiples. Why diversify into mediocrity just for the sake of diversification itself ? This is my new mantra for trying to beat what I believe will be a pretty flat NZX50 index this year. Some of Couta1's theories about not being too diversified are starting to rub off a bit on me. Good to have good mates isn't it :)

This company has been in a confirmed downtrend for nearly a year now. Why back losers ? "Never drink and buy shares in a downtrend you idiot" (KW). That's actually the censored version of her signature line on every post in another forum, that's how strongly she believes in that investment mantra. (She uses a swear word before idiot to emphasize her point)

Disc: Sold the last little dribble of bonds I had left over today. Motto, If you find yourself on a road to nowhere its time to start a fresh journey !

[Marilyn Munroe]

Beware, a prospective car purchaser may be tempted to buy a Peugeot or Daewoo badged as a Holden with a warranty for no deposit and 0% interest rather than a Turners Jap import with all the interest charges and fees tacked on.

Boop boop de do
Marilyn

[JeremyALD]

How do you figure that one Snoops ? Its a 5% discount to the 30 day VWAP or was it a 5% discount to the $3.75..I can't remember to be honest but don't care anymore. Even if the 30 day VWAP was $2.92 that would make the price about $2.75 to bondholders but to be quite frank about it I'm no longer interested in this very low growth, (on an EPS basis), company. Bondholders chances of receiving a premium on conversion were shafted with the recent deeply discounted share issues and they are really treated as little more than an inconvenient necessity by the major shareholder in my opinion. Second class stakeholders if you like.
To be frank about it share issues are too often, too much and too deeply discounted for my liking and paucity of liquidity and almost meaningless low EPS growth leaves me completely underwhelmed.

There's SUM vastly better opportunities out there on not dissimilar PE multiples. Why diversify into mediocrity just for the sake of diversification itself ? This is my new mantra for trying to beat what I believe will be a pretty flat NZX50 index this year. Some of Couta1's theories about not being too diversified are starting to rub off a bit on me. Good to have good mates isn't it :)

This company has been in a confirmed downtrend for nearly a year now. Why back losers ? "Never drink and buy shares in a downtrend you idiot" (KW). That's actually the censored version of her signature line on every post in another forum, that's how strongly she believes in that investment mantra. (She uses a swear word before idiot to emphasize her point)

Disc: Sold the last little dribble of bonds I had left over today. Motto, If you find yourself on a road to nowhere its time to start a fresh journey !

Yeah I've sold mine too. May be back at some point, but there are better growth opportunities elsewhere. I've put some in afterpay Australia and SML this week.

[Snoopy]

How do you figure that one Snoops ? Its a 5% discount to the 30 day VWAP or was it a 5% discount to the $3.75..I can't remember to be honest but don't care anymore. Even if the 30 day VWAP was $2.92 that would make the price about $2.75 to bondholders but to be quite frank about it I'm no longer interested in this very low growth, (on an EPS basis), company. Bondholders chances of receiving a premium on conversion were shafted with the recent deeply discounted share issues and they are really treated as little more than an inconvenient necessity by the major shareholder in my opinion. Second class stakeholders if you like.

This company has been in a confirmed downtrend for nearly a year now. Why back losers ?


I think my mental arithmetic went a bit mental Beagle. I optimistically remembered the bond conversion terms at a 10% discount to the prevailing share price. 10% discount on $2.90 was roughly $2.60. But as you so rightly pointed out, the real discount on offer was 5%. However, exact numbers aside, the point I was trying to make was that whatever share price you bought your own shares at over the last couple of years, it looks likely bondholders will have a chance to buy new shares even cheaper when the bonds mature.

It was clear from the day that the bonds were issued that if the TRA share price went up, then bonds would be a second class citizen way of investing in TRA. if the share price went down then the bonds potentially gave shareholders access to much cheaper shares at bond maturity time. Holding bonds was a hedge against the share price going down.

Potential capital growth of the shares was stymied with a subsequent share placement, mainly to Australians IIRC. But bondholders were not shafted. Owners of bonds were invited to get in on the companion share issue deal at around 3 bucks IIRC.

Of course the reason to keep holding shares in a downtrend is to continue to accumulate dividends, until the uptrend starts again. I can't take any investment plan very seriously when the result of that advice that selling at a low price is better than selling at a higher price. For a company with sound fundamentals, albeit not exactly blue chip status I believe that TRA will bounce back in share price terms at some point. And if I can pick up some more at $2.75 towards the end of the year by converting the bonds I will probably do just that AND buy into the inevitable new issue of bonds to keep my TRA position hedged.

SNOOPY

[winner69]

Snoopy — I don’t quite follow your logic, esp the bit about holding the Bonds was a hedge against the share price going down -


It was clear from the day that the bonds were issued that if the TRA share price went up, then bonds would be a second class citizen way of investing in TRA. if the share price went down then the bonds potentially gave shareholders access to much cheaper shares at bond maturity time. Holding bonds was a hedge against the share price going down.

[percy]

The bonds were/are a win win situation.
TRA sp increased, bond price increased.
TRA sp goes down,bond holders capital will buy more shares.
And in the meantime bond holders enjoyed a great yield..



ps.Daily Share chat pointed out car and parts sales are up 2.1% for the quarter.After an improvement in trading margin in October and November,after TRA's first half ended,Turners, with their extra new sites should be going gangbusters.Sales,finance and insurance,not to mention sites property development margin.

[winner69]

The bonds were/are a win win situation.
TRA sp increased, bond price increased.
TRA sp goes down,bond holders capital will buy more shares.
And in the meantime bond holders enjoyed a great yield..





I think I sort of get what Snoopy (and you) are getting re this hedging stuff

So for Snoopy's sake we really need to wish like hell that the TRA share price collapses even more ... $2 seems a nice round number and that will give him heaps of shares when he converts.

[winner69]

I see when the latest bonds were issued in October 2016 the TRA share price was $3.02

No idea what this means but seems interesting

Just curious .... need to be curious because Brian Gaynor says its a good thing to be ...and he says all the people who work for Milford are curious (radio ads)

[percy]

I think I sort of get what Snoopy (and you) are getting re this hedging stuff

So for Snoopy's sake we really need to wish like hell that the TRA share price collapses even more ... $2 seems a nice round number and that will give him heaps of shares when he converts.

Yes at $2 Snoopy would be over the moon.He would be barking louder than Beagle [if that was possible]..lol.
Also remember bond holders get first preference to any new bond offer.
The last time the bonds matured, there were some fun and games, as bond holders took advantage of arbitrage opportunities, that presented themselves.A lot of bond holders were also shareholders.
Craigs did not have any of these bonds,so I missed out on them,however The Trust I help out on received a good parcel via Macquaries.
It was always our intention to convert to shares,however I am looking forward to maturity,and the challenge of doing the right course of action.
NB.When TRA share price was over $3.90 a poster posted a brilliant graph of what the bonds [TRAHB] were worth at different TRA share prices.I think the thread was on NZDX somewhere.

[blackcap]

All hunky dory...

https://www.nzx.com/announcements/314789

[percy]

All hunky dory...

https://www.nzx.com/announcements/314789

Thank you for the link.
As always TRA remain "well positioned."

[Beagle]

Good they've stopped the stink bugs this time...something you can see... but in a quite moment once or twice over the last few years I sometimes wonder about second hand imported cars coming from certain parts of Japan and things you can't see. Probably just being over cautious but then again I've never noticed anyone offering to loan me a Geiger counter at a second hand car yard so I can check for myself. You never really know 100% do you ? https://en.wikipedia.org/wiki/Fukushima_Daiichi_nuclear_disaster
Turners being such a reputable company would run a Geiger counter over every second hand Japanese import so customers are 100% safe, surely they wouldn't take the slightest chance with customers wellbeing, or would they even think to do this ?
You can really rely on every second hand auction site in Japan to make sure their cars are 100% radiation free, or can you ? Export documents never get forged and corners never get cut, or does the ugly side of human nature and greed come into it sometimes ? Just a thought. Probably a very, very low chance you'll get radiated but it might be worth checking first ?
Disc: I have never bought a Japanese used import and probably never will.
Would you buy one from the Chernobyl district ?

[percy]

Good they've stopped the stink bugs this time...something you can see... but in a quite moment once or twice over the last few years I sometimes wonder about second hand imported cars coming from certain parts of Japan and things you can't see. Probably just being over cautious but then again I've never noticed anyone offering to loan me a Geiger counter at a second hand car yard so I can check for myself. You never really know 100% do you ? https://en.wikipedia.org/wiki/Fukushima_Daiichi_nuclear_disaster
Turners being such a reputable company would run a Geiger counter over every second hand Japanese import so customers are 100% safe, surely they wouldn't take the slightest chance with customers wellbeing, or would they even think to do this ?
You can really rely on every second hand auction site in Japan to make sure their cars are 100% radiation free, or can you ? Export documents never get forged and corners never get cut, or does the ugly side of human nature and greed come into it sometimes ? Just a thought. Probably a very, very low chance you'll get radiated but it might be worth checking first ?
Disc: I have never bought a Japanese used import and probably never will.
Would you buy one from the Chernobyl district ?

Classic...lol.
Don't know about Chernobyl !!!!!!!!!!!,but I hope you never leave home without your Geiger counter.Better check your TV.Watch out for any of your clients who drive a Japanese car.Get rid of them.Don't ever park next to a Japanese car.Best to get your groceries delivered.Make sure they are not delivered in a Japanese van. Why take the risk?


All the time hundreds of thousands of New Zealanders are enjoying driving the best value for money cars made, thanks to Japanese imports.They are also very cheap to run.

[Beagle]

You forgot to remind me to always wear my tin foil hat :D
Good to make a joke of these slight worries...as you say extremely unlikely but you never know for sure do you.

[winner69]

Auto loans and securitisation interesting topic at the moment

Quite a few concerns about Auto ABS and some commentators say could be the next subprime disaster

Don’t know much about situation this part of the world but securitisation becoming pretty popular.

But as long as punters pay the car loan before the mortgage we’ll be OK ....but can you not pay the landlord?

[Marilyn Munroe]

If you are buying a Japanese import and are worried about radioactive isotopes ask the dealer if the car was sourced from the Tokyo Bay area or Osaka and the Inland Sea. They are two geographically separated areas with cars shipped from the Osaka unlikely to have come from Fukushima or environs.

Boop boop de do
Marilyn

[BlackPeter]

Good they've stopped the stink bugs this time...something you can see... but in a quite moment once or twice over the last few years I sometimes wonder about second hand imported cars coming from certain parts of Japan and things you can't see. Probably just being over cautious but then again I've never noticed anyone offering to loan me a Geiger counter at a second hand car yard so I can check for myself. You never really know 100% do you ? https://en.wikipedia.org/wiki/Fukushima_Daiichi_nuclear_disaster
Turners being such a reputable company would run a Geiger counter over every second hand Japanese import so customers are 100% safe, surely they wouldn't take the slightest chance with customers wellbeing, or would they even think to do this ?
You can really rely on every second hand auction site in Japan to make sure their cars are 100% radiation free, or can you ? Export documents never get forged and corners never get cut, or does the ugly side of human nature and greed come into it sometimes ? Just a thought. Probably a very, very low chance you'll get radiated but it might be worth checking first ?
Disc: I have never bought a Japanese used import and probably never will.
Would you buy one from the Chernobyl district ?

I guess if radioactive angst is your thing, than better stop sourcing any food from overseas. People don't eat cars and cars didn't grow in the Fukushima region neither. People however eat fruit and vegetables - and they are grown in many of the worlds most radioactive polluted countries (like Ukraine, Russia, US (Nevada desert), Australia (mining areas), South Pacific (French Polynesia) ...

No risk at all that you can get contaminated in a properly cleaned up second hand Japanese car (unless Putin's mafia spiced it up for you with Pollonium), even if it was used in the restricted area, unless they did park it in the heavy water containers in Daiichi, but in this case you wouldn't have any joy with your car anyway.

However - next time you eat some of these cheap frozen berries from the Ukraine - or seafood which might originate from the Northern hemisphere - or worse - from near the French Pacific nuclear bomb test sites, or if you eat (dried or tinned) mushrooms from Eastern Europe or wheat from Russia, than it might be a good idea to use your Geiger counter. In all these cases the risk of contamination is very real, and obviously - taking the stuff into your body exponentially increases the health risk!

Heard as well that NZ Customs is using radioactive fumigation for certain fruit and vegetables (e.g. strawberries and tomatoes - I think flowers as well) ... obviously they claim its all safe (which means the remaining radioactivity is below a certain level) - but before you worry about radioactive cars, better stop eating anything coming from overseas - and be very aware what flowers you give your wife.

Discl: owning at current two German made cars (everybody makes mistakes ;); ... but love Toyota's and am likely to buy next time one of them again - my Camry and my Corolla have been the two best and most reliable cars we ever owned.

[percy]

Would you guys please stop this.
I am starving hungry and getting ready for my tea.
Beef sausage from Pak'nSave could contain anything.?
You are driving me to drink.My occasional glass of shiraz may not be enough tonight.!
Enjoyed a lovely bit of pig last night.Country of origin unknown.

[Brain]

Auto loans and securitisation interesting topic at the moment

Quite a few concerns about Auto ABS and some commentators say could be the next subprime disaster

Don’t know much about situation this part of the world but securitisation becoming pretty popular.

But as long as punters pay the car loan before the mortgage we’ll be OK ....but can you not pay the landlord?

The punters can sleep in the car so it should take precedence over the greedy Landlord:)

[percy]

"Where there is muck there's brass".
Guess the same goes for "end of life vehicles",better known to me as "wrecks".
Therefore, renewing Suncorp agreement for five years is positive.

[BlackPeter]

transferred from the CBL thread (as part of the competition to guess which companies might be next ...



...

That said, here goes, ranked highest to least; OHE, TRA and NZO.

Sorry, missed that initially. I would be interested to learn why you think TRA is likely to follow CBL going down the gurgler. However - given that this is the CBL thread - is it o.k. we continue the discussion on the TRA thread?

Here we go -

[Beagle]

I guess if radioactive angst is your thing, than better stop sourcing any food from overseas. People don't eat cars and cars didn't grow in the Fukushima region neither. People however eat fruit and vegetables - and they are grown in many of the worlds most radioactive polluted countries (like Ukraine, Russia, US (Nevada desert), Australia (mining areas), South Pacific (French Polynesia) ...

No risk at all that you can get contaminated in a properly cleaned up second hand Japanese car (unless Putin's mafia spiced it up for you with Pollonium), even if it was used in the restricted area, unless they did park it in the heavy water containers in Daiichi, but in this case you wouldn't have any joy with your car anyway.

However - next time you eat some of these cheap frozen berries from the Ukraine - or seafood which might originate from the Northern hemisphere - or worse - from near the French Pacific nuclear bomb test sites, or if you eat (dried or tinned) mushrooms from Eastern Europe or wheat from Russia, than it might be a good idea to use your Geiger counter. In all these cases the risk of contamination is very real, and obviously - taking the stuff into your body exponentially increases the health risk!

Heard as well that NZ Customs is using radioactive fumigation for certain fruit and vegetables (e.g. strawberries and tomatoes - I think flowers as well) ... obviously they claim its all safe (which means the remaining radioactivity is below a certain level) - but before you worry about radioactive cars, better stop eating anything coming from overseas - and be very aware what flowers you give your wife.

Discl: owning at current two German made cars (everybody makes mistakes ;); ... but love Toyota's and am likely to buy next time one of them again - my Camry and my Corolla have been the two best and most reliable cars we ever owned.

LOL There's some very strange colored cars around and I think my worry about irradiated cars out of Japan might have been a prejudice built upon some cars that simply look like they've been subjected to this because of their absolutely heinous colour, e.g. https://www.trademe.co.nz/motors/used-cars/nissan/auction-1541600379.htm?rsqid=f92f42b2d5774e96929b30fcda6d1 e55 This particular one is N.Z. New so you're probably safe with this one provided you can stand the colour !

[percy]

Very nice.
Looked even better on the F type Jaguar I saw yesterday.?

[percy]

transferred from the CBL thread (as part of the competition to guess which companies might be next ...



Sorry, missed that initially. I would be interested to learn why you think TRA is likely to follow CBL going down the gurgler. However - given that this is the CBL thread - is it o.k. we continue the discussion on the TRA thread?

Here we go -
He is certainly living up to his name.!..lol.

[winner69]

He is certainly living up to his name.!..lol.

Who ...greater fool or Black Peter

[percy]

Who ...greater fol or Black Peter

You a good at finding answers,so I will leave it to you to figure.


I will give you a glue.
The one you misspelt.

[winner69]

You a good at finding answers,so I will leave it to you to figure.


I will give you a glue.
The one you misspelt.

I better say sorry to BP then

[Beagle]

Back to Turners, did anyone notice the increase in bad debt vehicle provisioning for Heartland ? Turners have a vehicle lending division don't they ? Next shoe to drop ?

[trader_jackson]

Back to Turners, did anyone notice the increase in bad debt vehicle provisioning for Heartland ? Turners have a vehicle lending division don't they ? Next shoe to drop ?
Well what I did notice was the huge growth in lending for that division...

[Beagle]

I warned before on the HBL thread that the sort of no deposit unsecured lending they are doing through Harmoney and certain franchise dealers would come with higher delinquencies. My experience with finance companies leads me to suspect that they only provide for or write off loans when the "maggots are crawling out of the carcass" rather than when the loan starts to look really, really sick. Apologies for the graphic nature of that inferred image but that's the truth of what I've seen so I suspect we've only seen the tip of the iceberg with this problem so far.

Hopefully for Turners shareholders sake I hope they know the basics of making sure the borrower has a decent amount of skin in the game...but if delinquencies in this area are growing strongly when the economy is good, I wonder what would happen if things turned pear shaped with the economy ? I guess this explains why vehicle companies and banks always have a well below market PE, an element of cyclicality to their earnings that always needs to be born in mind. It continues to surprise me that some experienced investors who should know better than to hold these shares in a confirmed downtrend of nearly a whole years duration still cling on in there. Good luck to holders but I see no reason to reinvest have no interest in trying to pick a bottom.

P.S. God's honest truth I typed all this before realizing that they'd just hit a fresh 52 week low on Friday at $2.85...ouch, sorry, I genuinely am not trying to rub salt into the wound, last time I looked it was $2.95 but you have to wonder when does the pain end for poor beleaguered shareholders ???? How long does one keep holding a surely and steadily losing proposition... "Never own shares in a confirmed downtrend" KW..she's a wise one.

[winner69]

I warned before on the HBL thread that the sort of no deposit unsecured lending they are doing through Harmoney and certain franchise dealers would come with higher delinquencies. My experience with finance companies leads me to suspect that they only provide for or write off loans when the "maggots are crawling out of the carcass" rather than when the loan starts to look really, really sick. Apologies for the graphic nature of that inferred image but that's the truth of what I've seen so I suspect we've only seen the tip of the iceberg with this problem so far.

Hopefully for Turners shareholders sake I hope they know the basics of making sure the borrower has a decent amount of skin in the game...but if delinquencies in this area are growing strongly when the economy is good, I wonder what would happen if things turned pear shaped with the economy ? I guess this explains why vehicle companies and banks always have a well below market PE, an element of cyclicality to their earnings that always needs to be born in mind. It continues to surprise me that some experienced investors who should know better than to hold these shares in a confirmed downtrend of nearly a whole years duration still cling on in there. Good luck to holders but I see no reason to reinvest have no interest in trying to pick a bottom.

P.S. God's honest truth I typed all this before realizing that they'd just hit a fresh 52 week low on Friday at $2.85...ouch, sorry, I genuinely am not trying to rub salt into the wound, last time I looked it was $2.95 but you have to wonder when does the pain end for poor beleaguered shareholders ???? How long does one keep holding a surely and steadily losing proposition... "Never own shares in a confirmed downtrend" KW..she's a wise one.

Securitisation and subprime auto loans are often not a good mix

Wonder how far away Turners are from having that $150 facility used up ...and wonder if they have convinced BNZ to up it to $250m

[winner69]

Wonder what the Bakery boys wil be up when they have cashed up their Trilogy investment

They must be getting a bit bored with this investment by now .... manouevered themselfs from bailing out Dorchester to taking over Turners and now sitting on a tidy sum ..... time they cashed in this as well?

[percy]

New car sales.Going gang busters.
Second Hand car sales .Going gang busters.
Marac [Heartland Bank] Motor vehicle lending. Going gang busters.
Motor Trade Finance,[MTF and TRA] Motor vehicle lending. Going gang busters.
Turners Auctions/Buy Right Cars.Going gang busters.
Turners Equipment Sales.Going gangbusters.
Turners End of Life Car sales,Wrecks.Going gang busters.
TRA,Finance and insurance.Going gang busters.


PS,The Business Bakery boys know this.
pps.So do I.
ppps.KW may advise you to never buy BIG in an uptrend too.!!!..

[whatsup]

So when will TRA and HBL amalgamate ?

[Baa_Baa]

@Beagle, the chart is a mess for sure, no chartists would buy now. But holders at this advanced stage might have a different view from entry investors, as percy points out. Looks to me like a risky proposition from both viewpoints. There's less risk elsewhere, even in an otherwise topped out risky market with this being exposed to overhanging debt quality issues and geopolitical sentiment, why put it here, or even hold?

[percy]

So when will TRA and HBL amalgamate ?

Thursday week.............................................. ..........................................lol.

[LAC]

I see this year will have great revenue and profit but flat EPS, however I am expecting EPS growth in the following few years. Lots of risk in TRA but they are in a good place at the right time imo. What are you guys expecting NPAT to be full year?

[Beagle]

@Beagle, the chart is a mess for sure, no chartists would buy now. But holders at this advanced stage might have a different view from entry investors, as percy points out. Looks to me like a risky proposition from both viewpoints. There's less risk elsewhere, even in an otherwise topped out risky market with this being exposed to overhanging debt quality issues and geopolitical sentiment, why put it here, or even hold?

Couldn't agree more.
Last time I noticed it second hand sales at Turners were up 1.7% which is only in line with population growth primarily driven by new immigrants, (certainly doesn't fit most people's understanding of the term gang-busters). Like some others I think EPS is going to be flat or very close to flat one way or the other.

[Joshuatree]

The car sector has been on a tear as seen by Trademe TME motors division with strong revenue growth.

TME Investor presentation 28 February 2018 (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TME/314841/275352.pdf)

[percy]

Craigs research this morning on gross dividend yields, has TRA's increasing from 6.74% [2018] to 7.4% [2019],an increase of 10.45%.
Just love companies that have the capacity to pay increasing divies.
Divies going gangbusters too.!!!..lol.

[Beagle]

The car sector has been on a tear as seen by Trademe TME motors division with strong revenue growth.

TME Investor presentation 28 February 2018 (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TME/314841/275352.pdf)

Interesting. Speaking with the GM of one of the major franchise real estate agencies this morning, the online channels like Trade Me is slightly undermining the traditional real estate sales model. I for one think the same thing is happening with used cars and have noted quite a significant difference in the growth of new cars sales which have been very strong to the modest growth TNR are experiencing through their more traditional sales channels. I do note however that TNR are partnering up to a significant extent with Trade Me for some of their auction sales and Buy Right cars have their stock listed on Trade Me as well. A case of if you can't beat them, join them ?

LOL Percy, you're incorrigible ! I think you'll find the yield might be "slightly" better over at HLG..but I think you know that already :)

[RTM]

LOL Percy, you're incorrigible ! I think you'll find the yield might be "slightly" better over at HLG..but I think you know that already :)

Stop it you two. Just own both !

[Marilyn Munroe]

I for one think the same thing is happening with used cars and have noted quite a significant difference in the growth of new cars sales which have been very strong to the modest growth TNR are experiencing through their more traditional sales channels.


Some of us who are movie stars whose charms are starting to fade will remember the impact Jap Imports had when they first arrived in New Zealand.

They offered a good quality used car at a significant discount to buying new. Does this differential still exist? I say no.

Anybody who has watched television recently will be aware of the abundance of commercials from new car brands offering sharp prices and cheap financing.

I believe the new - used car balance is tilted heavily towards new and this is not the market TNA thrives in.

Boop boop de do
Marilyn

[Beagle]

Some of us who are movie stars whose charms are starting to fade will remember the impact Jap Imports had when they first arrived in New Zealand.

They offered a good quality used car at a significant discount to buying new. Does this differential still exist? I say no.

Anybody who has watched television recently will be aware of the abundance of commercials from new car brands offering sharp prices and cheap financing.

I believe the new - used car balance is tilted heavily towards new and this is not the market TNA thrives in.

Boop boop de do
Marilyn

I couldn't agree more luv. When you can buy a brand new small car for about $20K often with no deposit and interest free finance this significantly undermines the traditional $12-15K used import market which used to be the mainstay of many a used importers car yard. In addition its fairly common to see the new vehicle franchises offering weekly payments as low as around $70-80 a week, sometimes less, to finance a brand new car and often makes more sense for customers to do this when you take into account the extra fuel efficiency, its cheaper maintenance, better reliability, new car warranty and obviously greater durability. I helped both our kids into a very late / brand new small car a few years ago because the economics made greater sense. Just don't get me started on what they spent the cost savings on...
What you suggest is precisely the reason new car sales have indeed been going gang-busters for years now.

[percy]

Interesting. Speaking with the GM of one of the major franchise real estate agencies this morning, the online channels like Trade Me is slightly undermining the traditional real estate sales model. I for one think the same thing is happening with used cars and have noted quite a significant difference in the growth of new cars sales which have been very strong to the modest growth TNR are experiencing through their more traditional sales channels. I do note however that TNR are partnering up to a significant extent with Trade Me for some of their auction sales and Buy Right cars have their stock listed on Trade Me as well. A case of if you can't beat them, join them ?

LOL Percy, you're incorrigible ! I think you'll find the yield might be "slightly" better over at HLG..but I think you know that already :)

Yes Turners have a very good online sales channel.Vehicles,finance and insurance.And with a money back guarantee.Expect it is going gangbusters.
And yes I hold HLG for yield.Have also increased our MEL holding.MEL gross yield expected to rise from 9.3% to 9.4%.
Also have been having a lot of fun selling out of a lot of my small cap Aussie specs,.
Have a growing cash holding, which will soon grow even larger with HBL,MEL,TRA and MEL divies.
The cash pile gives me the "fire power", to act quickly should TRA's update be as good as I expect.
You could say I am "well postioned" and you would be right.

[Beagle]

Pssssss...don't tell anyone so keep it quiet but there's a rumour going around that the Business bakery group have appointed Percy to be the one writing the headlines and content of the next few annual reports going forward. It was apparently decided that Jascinda's relentless positivity has nothing on Percy's skills and even the finest Public relations consultants who are experts in the field at making silk purses out of sow's ear's have nothing on Percy's skills.
Expect frequent use of the term "gang busters" and the absolute minimum disclosure of real EPS only as legally required, (and then in the smallest fine print possible tucked as far back in the annual report as legally allowed). HUGE GROWTH will feature prominently with never a mention of lack of EPS because that doesn't matter anymore...:D

[percy]

When you prepare a vegetable garden you start with the soil and good compost.Time building solid foundations whether it is vegie garden or business are the same.Same in anything we do.Researching stocks it pays to understand the business.Do the foundations of research well, and you will invest successfully.
A few of the businesses which have solid foundations in NZ are EBO,FRE,FPH,HBL,MFT, and RYM.
TRA are the leading second hand car dealer business in NZ.Scale of business is growing in not only vehicle sales,but finance and insurance as well.
A simple business,with strong growing revenue streams. Good cash flow,low impairments.The "core" divisions of the business have been bulked up,vechicle sales,finance and insurance.
Should we look back 2,3,4 or 5 years we can see just how much the business of TRA has been improved.
Rock solid foundations, to keep paying Percy fully imputed quarterly dividends.
A NZ business improving the lifestyle of NZders.
Today's PE ratio is 11.16.

[Beagle]

Here's the problem Percy. 3-4 years ago the shares were 28 cents and you were a huge supporter back than and continually have been. They have since had a 10:1 share consolidation and overall the shares have gone nowhere. Company profits are growing but they issue so many new shares to achieve that growth it effectively renders the growth useless and the lack of any capital growth in the shares when the market overall has performed splendidly in that time reinforces my viewpoint. In case you think previous years share issues were an aberration they won't be. Expect many more shares to be issued in Sept 2018 when the convertible notes mature. Perhaps you have a point, (who can claim to know the future with absolute certainty, certainly not me), and at some stage in the future the company can achieve meaningful EPS growth of some substance or other but I would counter with a rhetorical question of why bother hoeing this ground endlessly when there's SUM other far more obviously fertile places to look for a future harvest ? Anyway good luck with it mate, I think we've debated it enough.

[percy]

Yes certainly getting like flogging a dead horse.
The next update/result maybe the key to TRA's future.
I know it will mean a great deal to me.
I am ready to either buy more or sell down/out.

[Beagle]

https://www.nbr.co.nz/article/stink-bug-disrupts-vehicle-sales-da-p-213306

Stink bug problems more serious than earlier thought. Prolonged shipping delay's expected. Several ships now turned away and no quick resolution in sight. Stock shortages starting to bite across the industry. New vehicle stock also affected as they're shipped on the same ships as used cars.

[percy]

Read TRA's announcement,27/02/2018.
Opportunities for them.

No I did not write the announcement.

[couta1]

I reckon the TRA thread is the new PEB, let's hope the stock ends up doing a little better.

[percy]

I reckon the TRA thread is the new PEB, let's hope the stock ends up doing a little better.

This thread requires your clarity of vision.
A Couta1 model such as you "world famous" [on sharetrader] RYM,SUM,OCA variable real time price model.
This standard has stopped pages of discussion on each of these companies.
Savvy investors only need to know the price of one,to know what the price of the other two should be.
Maybe TRA,HBL,and CMO.??
NB.
All day everyday TRA are earning profits for shareholders,via,vehicle sales,finance and insurance,while everyday PEB are earning profits solely for directors/staff.

[couta1]

This thread requires your clarity of vision.
A Couta1 model such as you "world famous" [on sharetrader] RYM,SUM,OCA variable real time price model.
This standard has stopped pages of discussion on each of these companies.
Savvy investors only need to know the price of one,to know what the price of the other two should be.
Maybe TRA,HBL,and CMO.??
NB.
All day everyday TRA are earning profits for shareholders,via,vehicle sales,finance and insurance,while everyday PEB are earning profits solely for directors/staff. I'm working on it Percy, my preliminary calculations are showing a ratio of 4:2:1 with CMO being worth double TRA and four times HBL. It's getting late and I need my beauty sleep, so watch this space for further info on Couta's Reversion to the Mean Model, Mark 2.

[couta1]

So anyway, here is the hot oil on the the respective values of the above 3 companies according to the Couta Theorum. TRA should be roughly $3.83 and HBL $1.91 relative to CMO, so as you can see it's currently significantly undervalued or CMO is overvalued, but I say it's not as HBL looks about right. Plenty of upside here aye Percy.

[couta1]

I think the Couta1 theory needs some tweaks for this sector mate. You need to shift your focus to the Total Return Analysis. :) Your barking at the wrong car here mate, the Couta Theorum doesn't concern itself with such trivialities, its worked out using percentages and standard deviations and has proven it's salt over many years, watch this space over the next year.

[percy]

So anyway, here is the hot oil on the the respective values of the above 3 companies according to the Couta Theorum. TRA should be roughly $3.83 and HBL $1.91 relative to CMO, so as you can see it's currently significantly undervalued or CMO is overvalued, but I say it's not as HBL looks about right. Plenty of upside here aye Percy.

Yes.yes yes.
Great analysis.
I agree.
And certainly does show very easily the overvalued/undervalued stocks.

ps.Great pity I have to spread it around,before I can add to your reputation.Easier said than done.?..lol.

[winner69]

The market ‘rerating’ of Turners has been pretty savage

It’s market cap is now less than what it was back in August - in spite of the $30m cap raise and they continuing to make ‘solid’ profits

[percy]

The market ‘rerating’ of Turners has been pretty savage

It’s market cap is now less than what it was back in August - in spite of the $30m cap raise and they continuing to make ‘solid’ profits

'Growing solid" profits.
TRA's next update is eagerly awaited.
They they should be 'rerated' accordingly.
I am holding myself at the ready.!!

[winner69]

'Growing solid" profits.
TRA's next update is eagerly awaited.
They they should be 'rerated' accordingly.
I am holding myself at the ready.!!

Didn’t Newton, or was it Alan Parsons, have something to say about things going down and up

[percy]

Didn’t Newton, or was it Alan Parsons, have something to say about things going down and up

They are not alone.
A great number of posters on this site have plenty to say about it too.
Some even draw pretty pictures of it................lol.i

[sb9]

Sold out the remainder of my holding today after slowly selling down since the arrival of 'stick bug' issue. I think its going to hurt the second hand car market in the short to medium term.
Better use of funds elsewhere imo.

[Beagle]

Sold out the remainder of my holding today after slowly selling down since the arrival of 'stick bug' issue. I think its going to hurt the second hand car market in the short to medium term.
Better use of funds elsewhere imo.

Good move mate. Despite what Turners claim it's readily apparent that even good companies in this sector that really do have their sales and earnings growing at a solid rate like CMO are going to be affected by this.

[percy]

It always pays to read company's announcements.
I do.
Leaves me "well positioned."

[JayRiggs]

This stink bug is good news for Turners!
https://stockhead.com.au/tech/bug-causes-stink-nz-boon-local-car-dealer/

I bought more TRA last week. Looking forward to positive update at end of the month.

[JayRiggs]

Good to see Milford increasing their TRA by a further 1 million shares since September last year.
https://www.nzx.com/announcements/315409

[percy]

Good to see Milford increasing their TRA by a further 1 million shares since September last year.
https://www.nzx.com/announcements/315409

Yes very positive.

[trader_jackson]

Good to see Milford increasing their TRA by a further 1 million shares since September last year.
https://www.nzx.com/announcements/315409

Far to cheap to not buy another million really...

[winner69]

Far to cheap to not buy another million really...

Wonder what their average price is now?

They bought heaps at 335 when Hugh green investments sold out

[blackcap]

Some good looking bidding coming in. Does someone know something I do not? Or just the market being the market.
Should be announcing their quarterly dividend sometime soon. Will be telling how much it is and if there is any commentary surrounding it.

[percy]

Some good looking bidding coming in. Does someone know something I do not? Or just the market being the market.
Should be announcing their quarterly dividend sometime soon. Will be telling how much it is and if there is any commentary surrounding it.

Maybe Milford's buying has brought TRA to savvy investors attention.
As you point out the quarterly dividend announcement should be within a fortnight,and market update should not be too far away after that.

[freddagg]

Maybe Milford's buying has brought TRA to savvy investors attention.
As you point out the quarterly dividend announcement should be within a fortnight,and market update should not be too far away after that.

TRA has been on my shopping list for a long time and when I saw the Milford announcement I bought immediately as I figured that it would cause some buying pressure and might be the the cheapest they would get.

[trader_jackson]

Some good looking bidding coming in. Does someone know something I do not? Or just the market being the market.
Should be announcing their quarterly dividend sometime soon. Will be telling how much it is and if there is any commentary surrounding it.

Likely some commentary about end of year results around end of March (as per last year) I am thinking

[iceman]

Likely some commentary about end of year results around end of March (as per last year) I am thinking

Percy's determined faith and optimism :-)

[Joshuatree]

Just been watching a 33 lot auction on turners tauranga, most were passed in many without even low low bids. How does TRA make most of its money as i watched the auction last week with similar results!.

[BlackPeter]

Just been watching a 33 lot auction on turners tauranga, most were passed in many without even low low bids. How does TRA make most of its money as i watched the auction last week with similar results!.

They used to make their money through auctions and left most of the margin to the retailers who bought in auctions. They found that this is not smart and changed their strategy.

These days they make most of their money in retailing the cars themselves (not selling them cheaply in auctions). They sell on top of that finance and insurance for these cars - you find them in "BuyRight" courts (http://www.buyrightcars.co.nz/) and on their own website (https://www.turners.co.nz/). They start as well to add value in servicing and repairing cars. One stop shop for all car needs - not a focus on auctions anymore.

Obviously - don't forget trucks and machinery - and last not least - their debt management unit makes a profit as well ;);

http://www.turnersautogroup.co.nz/site/turnerslimited/files/News2017/Turners%20HY18%20Interim%20Results.pdf

[Joshuatree]

Thanks BP, for bringing me up to date , makes more sense now, cheers JT

[percy]

Well with the buy side loading up, I thought we would see an announcement today.
Going by the buyers it must be not far away.?
We live in interesting times.

[BlackPeter]

Well with the buy side loading up, I thought we would see an announcement today.
Going by the buyers it must be not far away.?
We live in interesting times.

Yeah, interesting uptrend, though on very small volumes. Looks like their are hardly any sellers around ...

[percy]

Yeah, interesting uptrend, though on very small volumes. Looks like their are hardly any sellers around ...

Yes the excitement builds.
Have we moved from "well positioned" to "poised".?..................lol.
I am holding myself at the ready .
Still no buyers or sellers in Aussie.
Looks to me as though the shares placed in Aussie have been dumped in NZ.
I don't mind doing my community service and helping the Aussies out.

[LAC]

Its the only one that I accumulated on the NZX during the market scare a few months ago, so hoping for a decent announcement soon.

[percy]

=LAC;708865]Its the only one that I accumulated on the NZX during the market scare a few months ago, so hoping for a decent announcement soon.[/QUOTE]

WHOOPEE DEE.
Quarterly dividend increased from 3 cents per share to 4.5 cents per share.
Up a massive 50%.
Does not appear we will get a trading update,as per last year,guidance remains the same,however a "newsletter" is on its way.
I think the massive increase in divie says it all.
Record date for the divie is16th April and it is payable on the 20th April.

[LAC]

Yup just read that!!
Happy holder;) What's your famous words again.....

[percy]

Yup just read that!!
Happy holder;) What's your famous words again.....

"Follow LAC" .....lol.


PS.TRA divies are fully imputed.

[LAC]

"Follow LAC" .....lol.


PS.TRA divies are fully imputed.

Haha, don't ever say that unless you want to end up a very poor man;)

[percy]

I must not buy more TRA.I must not buy more TRA.I must not buy more TRA.
I must not follow LAC.I must not follow LAC.I must not follow LAC.

Disc.I brought more TRA this morning.!

[blackcap]

Yeah that is one huge increase in dividend isn't it. I was hoping for an increase from 3 to 3.5 cents but to read 4.5 just wow!.

[trader_jackson]

Yeah that is one huge increase in dividend isn't it. I was hoping for an increase from 3 to 3.5 cents but to read 4.5 just wow!.

Must be good news on the way
Or they can't lend out the cash money so just giving it back to us

[percy]

Yeah that is one huge increase in dividend isn't it. I was hoping for an increase from 3 to 3.5 cents but to read 4.5 just wow!.

Yes WOW.!
They have a record of steadily paying increasing divies,so it is very likely they will now keep paying 4.5cents per quarter.
18 cents per year going forward.WOW.!

[percy]

Correction.
Last year they paid 4 cents this quarterly payment,and 4.5 cents for the final quarterly payment.
Therefore this year, this divie is actually up from 4 cps to 4.5 cps.
The first two quarters this year the divie has been 3 cps per quarter..

[blackcap]

Correction.
Last year they paid 4 cents this quarterly payment,and 4.5 cents for the final quarterly payment.
Therefore this year, this divie is actually up from 4 cps to 4.5 cps.
The first two quarters this year the divie has been 3 cps per quarter..

Ahha that does make more sense. somehow a 50% jump seemed a bit excessive. However 4.5 is still great going forward. :)

[percy]

Ahha that does make more sense. somehow a 50% jump seemed a bit excessive. However 4.5 is still great going forward. :)
Yes.Yet the 12.5% increase is very welcome.
The Dealer Loyalty Scheme looks as though it will be worthwhile.

[kiora]

For the 6 months
$9,000,000 in insurance policies sold or $45,000/000 in loans sold by dealers
Mix & match ,how much of each?
https://stocknessmonster.com/announcements/tra.nzx-316200/

[blackcap]

For those interested, the TRA semi-annual newsletter:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/316321/277178.pdf

[percy]

For those interested, the TRA semi-annual newsletter:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/316321/277178.pdf

I found the newsletter an interesting read.
I continue to be impressed with TRA's business model.

[jimmybuffett]

I agree, they look pretty good, and like the idea of the new partnership they are announcing with repairers (in the newsletter), all good opportunities to leverage more revenue out if existing relationships with their customers.

[Beagle]

I agree in isolation the newsletter made for a good read and on the face of it they're following some good logical strategies with their brand development and product offer.
I even started to get a little excited myself but then when you run the ruler over it on a comparative basis to CMO it gets far less compelling.
I see eps more or less static for FY18 for TNR and have them on a forward PE of 11.7
On the other hand CMO by my estimate is on a forward PE of just 10.0 and at the half year they grew EPS by a whopping 19.5%. Further, they have a very good track record of growing EPS over the years whereas TNR have a shorter track record of growing profit with very minimal if any growth in EPS.

Summing up. In isolation TNR looks okay and one would hope that after the long decline in the SP it found a bottom at ~ $2.80 recently and is on its way back up but I note it still trades below the ~ $3.10 level of the 100 day MA so more conservative investors might like to hold fire until we see more confirmation the company has bottomed out.

CMO makes a more compelling long term hold and I note business confidence started to show some sign of recovery in March and consumer confidence was stable.
CMO's 100th year anniversary this year...not many companies you can point a stick at that have been around that long....something definitely to be proud of !
On that lower forward PE with their history I think CMO makes a much better case for itself.

[percy]

Great knowing we both retain our preference in this sector.

[Beagle]

I like companies that have been around longer than I have as I figure they must be doing something right lol That said I think you might do okay out of TNR in the year ahead. Possibly worthy of a top nomination in the what dog might bark this year thread...

[percy]

The code is TRA.

[couta1]

The code is TRA. And the target is $3.83.

[percy]

And the target is $3.83.

I have waiting for some one to pick that up.."recent analyst's valuation of well over $3.70".
Think the Beagle was too busy sniffing his CMO, and missed it....................lol.

[Beagle]

Often getting the right staff is the key. The new guy that came on board with high level experience at Armstrong's and BMW N.Z. possibly has more clues than the last one.
Maybe they shake off a few fleas this year after a shocker with the SP last year. I just don't like they way they really make a huge meal of talking up the growth in their announcements and very conveniently skip over the fact that EPS is flat and more than once or twice I might add. It seems more than a little disingenuous and deliberately so I would say. I guess once a second hand car dealer always a second hand car dealer even when it comes to the text of NZX announcements lol

[peat]

I guess once a second hand car dealer always a second hand car dealer even when it comes to the text of NZX announcements lol
Haha hilarious,


I like companies that have been around longer than I have
Benjamin Graham reckons 20 years is sufficient ;+)

[percy]

From Turners newsletter.
"More than 50 years of providing New Zealanders with great second hand cars."
Number one for brand awareness.
Most trusted.

[percy]

Lovely big fat fully imputated divie in my bank.
Even better they are paid quarterly.

[Beagle]

https://www.youtube.com/watch?v=2b3ttqYDwF0&feature=youtu.be

A very long video that I was initially very reluctant to invest an hour watching but now I have there are some important possible future considerations for the vehicle and energy industries.
For those that are prepared to invest the time they will gain an interesting insight into how things might develop for these two industries.
I think the widespread ownership of cars will change only very slowly but I liken this industry to being the opposite of the retirement industry which has long term tailwinds.
I'd rather invest in an industry with long term tailwinds than long term headwinds.
Craigs analyst just returned from an overseas visit to the U.S. to look at trends in EV's and its impact on Z, behind the paywall article on NBR had this to say in terms of his expectations for EV uptake in N.Z....(he didn't comment on reducing numbers of EV's due to possible widespread utilization of driverless EV's) but reckons
By 2025 25% of sales of new cars will be EV's, by 2030 60% will be EV's.
Long term I think if we get self driving car approval for N.Z. roads by the mid-late 2030's the cost to hire driverless EV's which will be abundantly available as taxi's will mean many people simply won't own a car, they'll hail a driverless taxi because its cheaper than the total cost of ownership.
Already there are survey's out that show young people are more attached to their mobile phone than their car...
This is an industry in long term systemic decline in my opinion.
For those that think electric cars with proper range are some far distant future prospect, perhaps it might be time to think again...
https://www.hyundai.co.nz/hyundai-kona-electric 450 km's range and here in July 2018.

[JeremyALD]

I went shopping for a car in the weekend. Overall was very disappointed with Turners. The cars were all quite old and over priced and I was in their Penrose store for almost an hour and not one representative said hi to me, which is surprising given how many staff were working. Ended up buying a second hand car directly from Honda which was in very good condition and a better price. The service was also excellent and I felt very important even though I wasn't buying new.

[Beagle]

Bit of a different experience at Honda Newmarket isn't it ! They even have a concierge at the front desk so as to direct you to the appropriate department / person upon arrival. I bought a demonstrator Honda for Mrs Beagle last year from the Newmarket branch. Enjoyed a very good haggle over the price even though they say you can't haggle on a new one I took a dogged approach on one of their demo's. First class service once the haggling was over.
Was back there in February getting the first service done and the Managing Director of Honda N.Z. introduced himself to me as I was waiting in the customer lounge. Really good bloke, we had a good chat about changes in the motoring industry. Upmarket shopping experience at a very fair price would be my summation of Honda Newmarket. I'd even go so far as to say that Honda's sales / service experience goes close to rivalling the service across the road at Auckland Mercedes-Benz branch except they charge you an arm and a leg for their cars and their after sales service over there :eek2:
To be honest I wouldn't even consider going to Turners Penrose. I know its a bit of a dowdy place and they don't sell the sort of cars that I'm in the market for from time to time.

[winner69]

Bunnings stores have a conceirge of sorts at the entrance as well

Just thought you would be interested

[peat]

Bunnings stores have a conceirge of sorts at the entrance as well


Hahahahahah

[Beagle]

Bunnings stores have a conceirge of sorts at the entrance as well

Just thught you would be interested

LOL and I've found them quite good at directing you to the correct aisle...saves a LOT of time in their gargantuan sized stores.

[BlackPeter]

https://www.youtube.com/watch?v=2b3ttqYDwF0&feature=youtu.be

A very long video that I was initially very reluctant to invest an hour watching but now I have there are some important possible future considerations for the vehicle and energy industries.
For those that are prepared to invest the time they will gain an interesting insight into how things might develop for these two industries.
I think the widespread ownership of cars will change only very slowly but I liken this industry to being the opposite of the retirement industry which has long term tailwinds.
I'd rather invest in an industry with long term tailwinds than long term headwinds.
Craigs analyst just returned from an overseas visit to the U.S. to look at trends in EV's and its impact on Z, behind the paywall article on NBR had this to say in terms of his expectations for EV uptake in N.Z....(he didn't comment on reducing numbers of EV's due to possible widespread utilization of driverless EV's) but reckons
By 2025 25% of sales of new cars will be EV's, by 2030 60% will be EV's.
Long term I think if we get self driving car approval for N.Z. roads by the mid-late 2030's the cost to hire driverless EV's which will be abundantly available as taxi's will mean many people simply won't own a car, they'll hail a driverless taxi because its cheaper than the total cost of ownership.
Already there are survey's out that show young people are more attached to their mobile phone than their car...
This is an industry in long term systemic decline in my opinion.
For those that think electric cars with proper range are some far distant future prospect, perhaps it might be time to think again...
https://www.hyundai.co.nz/hyundai-kona-electric 450 km's range and here in July 2018.

Outstanding presentation, very worthwhile to watch. Cheers for posting.

Not sure though, this is only relevant for TRA shareholders. What Tony Seba describes is a major disruption for the car industry (production, sales, maintenance - i.e. highly relevant for anybody who have an interest in any of them), for the energy industry (gentailers, but as well for oil exploration and distribution - ZEL). Sounds like he solved as well (not just the) Auckland traffic gridlock as well as the housing crisis in NZ. Unlimited space to build new houses into all these parking lots. Just turn them into social housing.

Food for thought - and yes, this might not be the time to buy a new car given that he predicts the change over for 2021 (give or take a couple of years), with everything being over for the ICE by 2030 - Jeez, this is only 12 years from now.

Obviously - if your old car gives up before the self driving revolution reaches your home town, better buy a good second hand car from TRA :p

I seriously think he has a point - and no point arguing over a year or two. Short term however I think this might even boost their (TRA & Co) business (last man standing strategy), but yes - long term they better think about adapting their business model - as should anybody else connected to or living off the car industry, infrastructure or power industry.

What Tony didn't mention though is - what are we going to do with the avalanche of unemployed professional drivers, mechanics and last not least car salesmen moving within the next 5 years or so onto the dole?

Interesting times, indeed ...

[Beagle]

Just want to credit Forest for sending me that link.
As you say there are implications for other listed companies.
Not sure I agree with his timing on ICE extinction for N.Z., he is talking U.S. prices and out national fleet is 14 years old on average.
Craigs analyst just got back from a U.S. trip and he's predicting 60% new EV sales by 2030, I think he is a bit low on that and the real number is somewhere between 60% and 100%.
The other thing is he's talking lithium ion batteries and their cost curve downwards. New technology batteries such as solid state batteries with 3 times the energy density could be here by the mid 2020's and be a game changer in terms of range, cost and performance so maybe new sales of ICE vehicles will be all done and dusted by 2030 ?
No question we are on the cusp of a MAJOR change in the vehicle industry.

[Joshuatree]

Thanks Forest and Roger. Im going to spread this (below)around a bit more as i think its great listening from Orr ,our Reserve bank Guv, talks about all sorts of things including change re Global warming and thinking longterm, planning earlier.

Listenduration 35′ :04″ (https://www.radionz.co.nz/national/programmes/ninetonoon/audio/2018641349/reserve-bank-governor-adrian-orr)

[Baa_Baa]

I can't see ICE or older car sales evaporating any time soon, or even near soon, Kiwi's are addicted to cheap cars and they're almost all ICE. Buy em' drive em' till they break, dump em' buy em' again etc, rinse and repeat.

Google reckons in 2015 there were about 3.8 million cars in NZ, up on previous years. That will take a while to cycle through to destruction, meanwhile there's a massive market for cheap and not so cheap used ICE vehicles and increasingly used EV's, which Turners will process a large percentage of sales.

Just chill there's no need for alarmist futuristic prognostications, total vehicle numbers are growing year on year, it's no matter whether they're ICE or EV. When the sharing economy takes hold, or if it does, then maybe there'll be a decline in total sales, perhaps after that autonomous vehicles and a further decline in total numbers, but hey get real, even if it does happen the runway for that is umpteen years away and plenty of time to make informed investment decisions.

TRA will do very well for a very long time and when/if it's not, it will be obvious. That's when we make our decisions. Not before.

[Hectorplains]

I went shopping for a car in the weekend. Overall was very disappointed with Turners. The cars were all quite old and over priced and I was in their Penrose store for almost an hour and not one representative said hi to me, which is surprising given how many staff were working. Ended up buying a second hand car directly from Honda which was in very good condition and a better price. The service was also excellent and I felt very important even though I wasn't buying new.

SNAP! Went to the Chch 'yard' today - what a mess. The cars in tonight's auction are dotted all over the show (and it's a BIG lot). The staff person was apologetic (I had to approach her and ask for help, as none was forthcoming ) about the ridiculous 'treasure hunt' approach to finding vehicles.

And the prices were loopy - they have seemingly purchased an endless supply of aging bangers with 2 -300k on the clock and priced them at $3.49k. Daft.

[LAC]

I have to somewhat agree here, I went to the Penrose one a couple weeks ago n wasn’t too impressed by the mix mash of vehicles, really hope they bring in more quality vehicles. The numbers n business model looks solid but the product on offer wasn’t too flattering to be honest. Very clean and tidy yard but no service reps approached us

[JeremyALD]

I have to somewhat agree here, I went to the Penrose one a couple weeks ago n wasn’t too impressed by the mix mash of vehicles, really hope they bring in more quality vehicles. The numbers n business model looks solid but the product on offer wasn’t too flattering to be honest. Very clean and tidy yard but no service reps approached us

I must say though, the chips at the cafe at Penrose were fantastic :p

[BlackPeter]

I can't see ICE or older car sales evaporating any time soon, or even near soon, Kiwi's are addicted to cheap cars and they're almost all ICE. Buy em' drive em' till they break, dump em' buy em' again etc, rinse and repeat.

Google reckons in 2015 there were about 3.8 million cars in NZ, up on previous years. That will take a while to cycle through to destruction, meanwhile there's a massive market for cheap and not so cheap used ICE vehicles and increasingly used EV's, which Turners will process a large percentage of sales.

Just chill there's no need for alarmist futuristic prognostications, total vehicle numbers are growing year on year, it's no matter whether they're ICE or EV. When the sharing economy takes hold, or if it does, then maybe there'll be a decline in total sales, perhaps after that autonomous vehicles and a further decline in total numbers, but hey get real, even if it does happen the runway for that is umpteen years away and plenty of time to make informed investment decisions.

TRA will do very well for a very long time and when/if it's not, it will be obvious. That's when we make our decisions. Not before.

Look - nobody is panicking (i.e. no need to chill), and obviously - everybody will make their own decisions.

However - I found two data points from the presentation quite interesting:

In 1900 the streets of New York have been full of horse and carts. In 1913 the roads have been clogged with cars - no horse around anymore. The change from all horse to all car took a bit longer than a decade.

Digital Photography: 2000 was the heydays of film photography. Most pics developed ever. Kodak was a great and successful company. I myself bought in the early phases of digital still a film camera, because digital photos just didn't had the resolution I wanted. Bad decision - 2 years later there was no point anymore in using the film camera, paying a dollar for each photo and waiting a week for the pics to be developed. Ah yes, and Kodak filed in 2012 for bankruptcy.

If using a self driving car is (as Tony claims) in some years 4 to 10 times cheaper per km than using the old oil or petrol com-buster (and his data look sensible), than who will still buy a car with ICE? Sure - nobody can foresee the future, but I think it makes sense to start pondering what such a step change might mean for all of us.

And yes - there well might be a role for TRA in this new world. Nokia started as a manufacturer of pulp mills - and look where they are these days ;);. However - TRA better make sure they don't end up like most of the cart dealers and manufacturers after 1900, or like Kodak this century.

If you see the wave of change coming it can be fun to surf ... but better be prepared. Putting the head into the sand is typically a bad strategy.

Have a look at the presentation - it will be worth your while ...

[Beagle]

Quite apart from the long term future concerns the fact that we now have multiple anecdotal reports on here of people visiting Turners car lots and experiencing unhelpful sales "assistants" if you can call them that ? and an unhelpful display arrangements of vehicles tells me there's a systemic cultural problem in the company with its sales staff. You don't fix that sort of problem overnight...

I'm with BP on this horse and cart thing. EV's for under $100K that do 450 km's on a charge are here in July 2018 and probably somewhere around $70-80K. Full EV's that can do 200 km's on a charge brand new are already here for $55K. (Hyundai INIOQ). With the speed of price decline in the lithium-ion battery manufacturing when these sorts of vehicles halve in price, I reckon 4-5 years away in N.Z., BINGO, very few people will but a new ICE vehicle. Sure there will still be plenty of older ICE engines for the dealers to sell...for a while but the headwinds in the long term should be obvious at least as much as the tailwinds are for the retirement sector !

Food for thought...The question becomes do you want to invest in an industry with long term headwinds or long term tailwinds ?

[James108]

I don't see much of a difference between selling second hand EVs or second hand ICE vehicles. As suggested autonomous driving will be the real disruption to TRA's business (as well as other auto retailers, CMO etc.), the timing of this seems less certain than EVs which are imminent.

So I guess there are headwinds on the horizon but they will not start to blow for another 10 years at least imo.

[Jay]

Perhaps most people who go to buy at Turners are not fazed by these "issues" of cars all over the place, no sales people etc.
I have sold a couple of cars thru them as it is 1> easier than having to deal with a private sale scenario and all that entails and 2. will get more for it than a trade in.
However, I would not buy from there myself, easier to search online then go to the yard have a look in person, test drive etc and have the backing of some kind of warranty (if applicable) from a reputable yard
In general I would tend to agree with Mr 108 as well, yes headwinds, but will not have a major impact until driverless cars gather momentum, of course they still own Buy Right cars don't they as an alternative to the "mess" at Penrose etc
But also agree Mr Beagle no tail winds in this industry as opposed to sum others

Discl: None held

[Beagle]

Point to ponder then...how many years away are we in N.Z. from hailing a cheap uber / taxi ride with a driverless E.V. ? I think its less than some others are thinking. My guess, and obviously its just that, is 10 years.

[Jaa]

In Tauranga they are pretty well organised. Ask to test drive a car at the friendly front desk and they will bring it out the front for you or make an appointment online and it will be waiting for you.

Lots of cars for sale in the 7-15k range.

The sales rep suggested very little happens at the auctions and after watching a few online he's right. He was keen to negotiate and discount the car on the spot and of course sign you up for credit and insurance.

They were much less keen to buy a car off me a few months later, offering a low ball offer. They flat out refused to put it to auction as I was heading overseas for a while. I thought that was what auctions were for! Sold it via Trademe classified, 2 weeks later for 50% more than their low ball offer.

Seemed pretty obvious Turners are much more of a car yard with great online technology and finance and insurance arms than an auction house.

[percy]

Maybe Turners are well positioned for a new EV franchise.?
Certainly have no trouble moving trade ins.!
That would put a few volts into the share price.!!..lol.

[Beagle]

Reported today that business confidence has fallen even further and plumbing new lows (against what some on here predicted would be a recovery after the initial shock of the election result).
Consumer confidence also plumbing new lows announced last week. Key decision makers have had about 6 months to have a look at the new experiment that passes as an excuse for a left wing government and quite clearly they are very worried by some of the free radical thinking going on.
Auckland city council approved its latest revenue raising mechanism today, (which is just a tax increase by another name)..anyone remember no new taxes in our first term?...oh yes all is forgiven because this fixes transport woes...yeah right and this is a transport levy not a tax...time for a Tui anyone ? and will proceed to waste this money on infrastructure that will make no meaningful difference and be completely redundant in 20 years time when most people will be hailing driverless cabs.

I continue to think brand new or near new (of the type that are really fuel efficient, think hybrid, electric, plug in electric and very small cars) vehicles will outsell old clunkers for anyone that is with the confidence left to change vehicles in the first place. I'd imagine the high priced Euro dealers will be doing a real starve as business's put their capex plan's on review.
Most worrisome is that business's surveyed most recently are really pessimistic about their own expectations in the year ahead. I expect business pessimism to remain very sticky and possibly deteriorate even further.
http://www.sharechat.co.nz/article/4693d080/nz-business-confidence-dims-in-april-firms-dial-back-own-trading-expectations.html?utm_medium=email&utm_campaign=NZ%20business%20confidence%20dims%20i n%20April%20firms%20dial%20back%20own%20trading%20 expectations&utm_content=NZ%20business%20confidence%20dims%20in %20April%20firms%20dial%20back%20own%20trading%20e xpectations+CID_faf222c3ad26b0f98ce911e3da2eb9d9&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle4693d080nz-business-confidence-dims-in-april-firms-dial-back-own-trading-expectationshtml

[winner69]

Recession for sure in 2019 ......Turners do well during recessions

[percy]

Recession for sure in 2019 ......Turners do well during recessions



Turners have done well for 50 years,selling cars to New Zealanders.
Today they clip the ticket with finance and insurance too.

ps.Do you think the recessions will last more than two days.Maybe a one day recession on Monday 27th May 2019, and another on Monday the 15th of July.?

[toddhunter]

Hi Jeremy ALD sorry to hear about your experience about not being approached on one of our sites. I can assure you this is not the standard we expect to be delivering customers. Very happy to talk further on this please call me 021722818.

We are a still a business and culture that is in transition from Auction (wholesale focused and hands off) to Retail (helping customers) and this is something we are constantly having to work on. As part of this strategy we are actively trying to sell less vehicles through the auction channel as every car we sell to an end user customer creates the opportunity to add insurance and finance to the sale, as well as generating a better margin on the vehicle sale. Someone also mentioned that the auction cars were dotted around the yard...that doesn't make sense to me but we are certainly committing our prime real estate inside our big sheds to our retail (BuyNow) cars. Auction cars stored outside because we generate much better margins from the BuyNow cars than the auction vehicles. It also sounds like HectorPlains you might have hit the budget car auction night because they have 223 cars at Christchurch Branch over $10k. See link below to their selection of $10k + cars.

https://www.turners.co.nz/Cars/Used-Cars-for-Sale/?pricefrom=10000&locations=christchurch&pageno=1&sortorder=1,ASC&pagesize=120

A couple of other comments about EVs, our mix of stock etc.

No doubt EVs are coming and we are certainly watching the space closely. There are around 3.7M light vehicles in NZ and even if every single new car coming into the country from tomorrow was an EV it would still take over 25 years for the change out to occur. We are currently very focused on the 20% of the 3.7M vehicles that are effectively at the end of their economic life. That is over 700,000 vehicles that are 20+years old and our immediate opportunity for selling a replacement.

We have also recently undertaken some research which tells us that over 60% of car buyers in NZ are looking fro a vehicle less than $10k. 80% of buyers are less than $20k. I think someone referred to the mishmash of vehicles at Penrose....I would prefer to call it a wide variety of range and prices! As some of you may know around 50% the cars we sell through Turners Cars are on consignment and the other half will be vehicles we own. The consignment cars in particular don't tend to have much if any spent on refurbishment which can make presentation challenging. The cars we own we make a judgement call in regard to refurbishment and what will give us the best return. However the mix of consignment and owned cars works well from an efficient use of capital perspective.

If anyone would like to discuss any of these points directly feel free to email me todd.hunter@turners.co.nz. (CEO for Turners Automotive Group)

[percy]

Hi Jeremy ALD sorry to hear about your experience and very happy to talk further on this please call me 021722818. I can assure you this is not the standard we expect to be delivering customers. We are a still a business and culture that is in transition from Auction (wholesale focused and hands off) to Retail (helping customers). We are constantly reminding our team about this. Kind regards Todd Hunter CEO Turners Automotive Group.

Big welcome to you Todd.

[Beagle]

Thanks for sharing Todd and for opening the lines of communication.
I think its truly sad that we're a nation as a whole that on average drives such old vehicles around...and some people wonder why the road toll is so high...go figure !
That said I would be the last one advocating for even more socialist policies creating an even more Government dependent society.
EV's are coming faster than many on here think, I reckon.

[horus1]

EV 's have real limitations,charging time and range. The change over will be slow. Watch fuel cells they will be backed by oil cos and will take some of the market .

[JeremyALD]

Thanks Todd, very impressed you have taken the time to apologise and write on here. Something not many CEOs would lead by example and do!

To be honest I don't have a lot more to say, except there were a lot of sales representatives that day which is what made it disappointing. I would say I saw at least 5 representatives who didnt appear that busy yet did not approach me, let alone say hi as I walked passed. The lady at the cafe made more of an effort to engage. She was very nice actually!

Insofar as cars maybe just not what I was looking for but I found it hard to know where to look for cars that I was interested in and had to walk through every row in the Branch. Had someone of talked to me this could of been avoided and who knows I might of bought then and there.

Personally I'm not a big fan of auctions. I'd rather have a set price and negotiate from there which is what I did at Honda. Good strategy to move more towards selling stuff at Retail. Look forward to going into Penrose in the future and giving it another try. Cheers Jeremy

[couta1]

Thanks for sharing Todd and for opening the lines of communication.
I think its truly sad that we're a nation as a whole that on average drives such old vehicles around...and some people wonder why the road toll is so high...go figure !
That said I would be the last one advocating for even more socialist policies creating an even more Government dependent society.
EV's are coming faster than many on here think, I reckon. What's wrong with my 1994 Suzuki Vitara with 320000k on the clock, had it 18years and never had or caused an accident, closest was a few years back when an AA battery vehicle run a red light and miraculously missed hitting me side on.PS-When your times up, it's up ,no matter what.PPS-EV's, yeah nah.

[Beagle]

What's wrong with my 1994 Suzuki Vitara with 320000k on the clock, had it 18years and never had or caused an accident, closest was a few years back when an AA battery vehicle run a red light and miraculously missed hitting me side on.PS-When your times up, it's up ,no matter what.PPS-EV's, yeah nah.

Okay vehicle in its day but take some sage advice mate, a man of your means and intelligence should know when to quit while you're ahead.
Its not your driving I'm worried about, its the tens of thousands of people coming into the country on counterfeit international driving licenses or the tens of thousands driving without a license at all. If someone hits you hard in that vehicle you'll be going to see the good Lord a lot earlier than you otherwise would be ! There's plenty of really late model good quality vehicles around with good performance and 5 star safety ratings in the $20 -$30K range these days or you could even ask our resident expert car dealer on here for some advice in the $10K range if you're feeling too "Scottish" to buy something better ?

Food for thought. How would you feel if you had a bad accident in that and your grandkids in the back were killed when a far better quality of vehicle would have saved them ? This is the exact reason I ensure my wife has a current model five star rated vehicle...apart from the fact that on the odd occasion, once in the blue moon, I don't mind if she herself hangs around herself a bit longer too lol

The weird thing is you're not alone. I have some other good friends in Auckland who have significant means and should know better but drive really, really old cars that wouldn't pass muster on any of the latest crash tests or latest safety equipment. I talk to them about it too from time to time and they don't listen either...go figure ?

Its an interesting study in human psychology isn't it. Maybe Todd Hunter you could shed some light on this question ?
Why do some people who are very comfortably well off deliberately choose not to update 20+ year old vehicles when they can very easily afford too ?
Do they simply not recognize the risk of older vehicles with far less technology and safety equipment than modern 5 star rated vehicles with all the latest safety aids, crash intrusion beams and so on or are they simply choosing to live a really frugal lifestyle because they've simply got into that habit and can't get out of it ?

[couta1]

I knew I should have added one of these :cool: to my last post, anyway was a good days fishing.

[Beagle]

I knew I should have added one of these :cool: to my last post, anyway was a good days fishing.

Cheeky bugger...just as well we're good mates :) Still an interesting study in human psychology though !

[hogie]

Had an accident in my old 1986 Toyota Starlet a few years back ... wrote off a late model VW Passat and got away with $2k worth of repairs to the Starlet ... they don't make em like they used to :)

[percy]

Okay vehicle in its day but take some sage advice mate, a man of your means and intelligence should know when to quit while you're ahead.
Its not your driving I'm worried about, its the tens of thousands of people coming into the country on counterfeit international driving licenses or the tens of thousands driving without a license at all. If someone hits you hard in that vehicle you'll be going to see the good Lord a lot earlier than you otherwise would be ! There's plenty of really late model good quality vehicles around with good performance and 5 star safety ratings in the $20 -$30K range these days or you could even ask our resident expert car dealer on here for some advice in the $10K range if you're feeling too "Scottish" to buy something better ?

Food for thought. How would you feel if you had a bad accident in that and your grandkids in the back were killed when a far better quality of vehicle would have saved them ? This is the exact reason I ensure my wife has a current model five star rated vehicle...apart from the fact that on the odd occasion, once in the blue moon, I don't mind if she herself hangs around herself a bit longer too lol

The weird thing is you're not alone. I have some other good friends in Auckland who have significant means and should know better but drive really, really old cars that wouldn't pass muster on any of the latest crash tests or latest safety equipment. I talk to them about it too from time to time and they don't listen either...go figure ?

Its an interesting study in human psychology isn't it. Maybe Todd Hunter you could shed some light on this question ?
Why do some people who are very comfortably well off deliberately choose not to update 20+ year old vehicles when they can very easily afford too ?
Do they simply not recognize the risk of older vehicles with far less technology and safety equipment than modern 5 star rated vehicles with all the latest safety aids, crash intrusion beams and so on or are they simply choosing to live a really frugal lifestyle because they've simply got into that habit and can't get out of it ?

Oh dear another one of your great moral crusades.!
Last one was KFC.Then within a week you brought some KFC shares.
I guess next week you will be raving about the 1951 Classic Jaguar XK 120 you are looking to buy?
May be time for your own off market rave thread.?..."The Howling Beagle"....lol.

[Beagle]

LOL...speaking of Jaguar's...you know you want a decent Jaguar with that new home of your's Percy...go on, let the moths out of that wallet.

[couta1]

My old Suzuki flew through it's 6 monthly warrant today as it's always does. PS-Already have an old 1970 Jag.

[Beagle]

Had an accident in my old 1986 Toyota Starlet a few years back ... wrote off a late model VW Passat and got away with $2k worth of repairs to the Starlet ... they don't make em like they used to :)


My old Suzuki flew through it's 6 monthly warrant today as it's always does. PS-Already have an old 1970 Jag.
Allan Hubbard with his widely known frugal ways would definitely approve...oh hang on a minute...what was his cause of death ?
https://en.wikipedia.org/wiki/Allan_Hubbard_(businessman)

Anyway...back to Turners where the average poor punter is looking to buy a used car for around $10K and probably financing most of that too.
What an "interesting" world we live in...

[couta1]

Alan Hubbard was 83 when he died, he lived a full life, his time was up, RIP Allan.PS-Cool car that VW he owned.

[percy]

LOL...speaking of Jaguar's...you know you want a decent Jaguar with that new home of your's Percy...go on, let the moths out of that wallet.

The 2004 "Lovisca" Nissan Bluebird Slyphy did every thing perfectly on our recent trip to Pohara Beach.
In fact the 7 hour drive back through The Lewis Pass with plenty of snow,and a huge amount of traffic, it ran like a dream.Does not use a great deal of gas.
Most impressive was the fact my back survived the trip well.Got out of the car, and had no trouble walking,and no stiff back.
Still under 25,000 on the clock.
A truly great car,which should do me for the next 10 to 15 years..

[winner69]

Back on topic please

Is Turners good for a punt ...or just a crap investment ...at current share price.

[percy]

Back on topic please

Is Turners good for a punt ...or just a crap investment ...at current share price.

The answer will be known late this month when they announce their result.

[Beagle]

Back on topic please

Is Turners good for a punt ...or just a crap investment ...at current share price.

It would be good if senior management made it crystal clear what the earnings per share growth is, (if any), rather than making it all about headline profit growth. Heck I don't even mind if they use the fancy weighted average number of shares on issue to try and make it look better !
No question the company is growing but if they keep issuing so many shares year after year after year its makes the growth almost meaningless for shareholders, (probably really good for management bonus's though). This lack of projected EPS growth is quite clearly the reason the SP is underperforming. No doubt more shares to be issued this year when the convertible bonds mature. That should give them ample funds for a good team building retreat at say the Wairaki conference centre at Taupo to try and make some meaningful inroads on improving company culture. (You don't turn that sort of thing around overnight)

[winner69]

It would be good if senior management made it crystal clear what the earnings per share growth is, (if any), rather than making it all about headline profit growth. Heck I don't even mind if they use the fancy weighted average number of shares on issue to try and make it look better !
No question the company is growing but if they keep issuing so many shares year after year after year its makes the growth almost meaningless for shareholders, (probably really good for management bonus's though). This lack of projected EPS growth is quite clearly the reason the SP is underperforming. No doubt more shares to be issued this year when the convertible bonds mature. That should give them ample funds for a good team building retreat at say the Wairaki conference centre at Taupo to try and make some meaningful inroads on improving company culture. (You don't turn that sort of thing around overnight)

Jeez beagle - you expect car salesmen to tell you bad stuff like EPS not growing much ....even if the wheels are falling off the car it’ll still be all shiny and revved up and a great buy eh

They’re wheeler dealers mate (maybe a bit harsh but ....) ... do everything to make a buck even if they have to be given a buck to make that buck.

Wairakei ....going there you may as well go to Huka Lodge

[percy]

Turners achieve what they say they will do.

[Beagle]

Turners achieve what they say they will do.

Agree they have a good track record of doing that by issuing new shares such that EPS growth has been about 4% and might be this year too.
Meanwhile over at Colonial Motors now in their 100th year of operations and trading on a lower PE and without issuing any new shares in their most recent half year result net profit after tax was up 22%. I think if TH was being perfectly honest he would suggest that its tough to compete with brand new fuel efficient vehicles when manufactures support sales with no deposit interest free deals and in many cases low priced or free multi year service plans.

The economics of a small brand new small car for $20K with its very fuel efficient engine, very low maintenance and interest free finance is better than an old clunker for $10K - $12K with the significant extra fuel consumption, substantial extra maintenance and of course paying normal finance company interest rates. That is a fact and I've run the ruler over this for several clients over the years and that fact isn't going to change anytime soon with fuel prices headed north and new car and engine technology getting even more efficient as time goes by. Then there's the extra safety as well with most modern small cars being five star safety rated, something that some on here ignore but I would suggest is also a compelling motivating factor for many families.

I don't see the statistics of new car growth far exceeding used car growth changing going forward.

[percy]

Agree they have a good track record of doing that by issuing new shares such that EPS growth has been about 4% and might be this year too.
Meanwhile over at Colonial Motors now in their 100th year of operations and trading on a lower PE and without issuing any new shares in their most recent half year result net profit after tax was up 22%. I think if TH was being perfectly honest he would suggest that its tough to compete with brand new fuel efficient vehicles when manufactures support sales with no deposit interest free deals.

As far as I know CML do not have their own insurance company,or their own finance company.
TRA by bulking up their sales chanels,both Truck and Equipment with more sites,their car sales with BuyRight cars and more Turners sites ,gives them the added momentum to add finance [again bulked up] and insurance [yes that too bulked up].
Bulking up their core business has added strength to Turners ongoing earnings.It is a lot better,stronger business,and well focussed for future,with the capacity to add further strength to each sector they are in,ie vehicle sales,insurance,and finance.The possible entry into vehicle servicing will add another ticket for Turners to clip.
Not being part of a franchise group means they can react to market forces very quickly,and nothing stopping them opening sites where ever they want to.
Moving salesmen's approach from auctions to selling, is best done via pay incentives.
The best salesmen in any business are the top earners,books to real estate.
It really works...lol.

[couta1]

I wouldn't buy a brand new car unless I was certain it was the last one I was ever going to own,too much loss as soon as you drive it out of the showroom.

[Beagle]

The shares were 28 cents about 4 years ago Percy before the 10:1 share consolidation. Around $2.80 about four years ago to $3 now is a very dismal performance against a booming market over the last few years so I would say the market is telling you that Turners have a heck of a lot to prove going forward. If things are going so well why has the SP been in such a downtrend for the last year or so ?

Couta1. Not everyone is highly mechanically minded and capable like you. Most people face ever increasingly and potentially very serious repair costs as their cars get really old. Eg, a good mate phoned me last evening and said he's got a serious whine in the diff of his Ford Falcon. Its done 280,000 km's but is only 10 years old, what to do ? Does he keep tipping money down a hole on that car, (quoted $1,500 plus GST to fix) knowing there's probably a range of other problems coming shortly ? (Known issues with that model are water pumps, alternators and he admitted his gearbox is already very tired and could d fail at any time in the near future).
What would be your advice to him ?

On the other hand by way of example last year I bough a 2017 demo Honda Civic sedan done just 5,000 km's for $26,500 for Mrs Beagle (5 star rated for safety of course :p) You would struggle to find a 2017 Honda Civic on Trade me for that price now. If you buy a good brand at a good price I would argue the initial year's loss is not as great as what many people think. We have a 3 year service contract on that car for $900 and its covered by a 5 year unlimited mileage factory warranty. These sort of long warranties are another reason people buy new or near new cars. What price complete peace of mind ?

In terms of depreciation on used cars especially used Japanese imports try buying a 10 year old second hand Japanese import for say $12K, drive it around the block and try trading it in at another dealership, you might get about half back if you are lucky.

I maintain that the new vehicle manufactures are making a compelling case for people to update their vehicles with some great new technology like blind spot monitoring, adaptive cruise control e.t.c., increased fuel efficiency, greater safety, low or no interest finance terms, long warranties and free or cheap service plans.
For many people with good credit who are eligible for these no interest deals the package as a whole is quite compelling compared to the alternatives and this is why the growth in new vehicle sales, about 9% last time I checked is substantially greater than used vehicle sales.

We can all have opinions but the sales statistics (new vehicle growth v used), speak for themselves and have done for quite some time and I for one don't see that changing going forward.

[winner69]

From Mr Hunter's post - We have also recently undertaken some research which tells us that over 60% of car buyers in NZ are looking fro a vehicle less than $10k. 80% of buyers are less than $20k.

Says something about the state of the country more than anything else I reckon

Beagle - you are in a minority .... one of the 20% left......just saying so LOL

[percy]

From Mr Hunter's post - We have also recently undertaken some research which tells us that over 60% of car buyers in NZ are looking fro a vehicle less than $10k. 80% of buyers are less than $20k.

Says something about the state of the country more than anything else I reckon

Beagle - you are in a minority .... one of the 20% left......just saying so LOL

A lot of competition for that 20% too.

[horus1]

I buy a new Honda every 2 years . They do not lose value and dont break down. They are reasonably priced . Love them.

[couta1]

Beagle, tell your mate to check the fluid level and quality of his diff oil before he does anything else.

[Schrodinger]

"a good mate phoned me last evening and said he's got a serious whine in the diff of his Ford Falcon. Its done 280,000 km's but is only 10 years old, what to do ? Does he keep tipping money down a hole on that car, (quoted $1,500 plus GST to fix) knowing there's probably a range of other problems coming shortly ? "

1. Log on to Trademe
2. Select Nissan Sunny/Sentra/2010-2014/80-90k
3. Find one for $3k ish (bonus points if its an old lady etc)
4. Kick tires + Buy

This would need a mind set change from friend as the Sunny is not as "cool" but the bonus is they go forever, dont cost $300 to fill and require minimal mechanical stuff. A bit like investing, would you rather look cool (PEB) or make money (Xero)?

Ford Falcons are rubbish vehicles - thats why Australia stopped making em. NZ was the only country that bought em.

[percy]

[QUOTE=Beagle;713117]The shares were 28 cents about 4 years ago Percy before the 10:1 share consolidation. Around $2.80 about four years ago to $3 now is a very dismal performance against a booming market over the last few years so I would say the market is telling you that Turners have a heck of a lot to prove going forward. If things are going so well why has the SP been in such a downtrend for the last year or so ?

Correct.
In the meantime the core business has been greatly improved.SP down, quality of the business up.
The market has been spooked by The Estate of Hugh Greene selling their large holding,and the poorly advised placement ,SPP.and listing in Australia.
I am expecting a solid result at the end of the month,with a strong outlook.
I am also expecting Turners to be rerated strongly by the market in the coming months.

[Beagle]

"a good mate phoned me last evening and said he's got a serious whine in the diff of his Ford Falcon. Its done 280,000 km's but is only 10 years old, what to do ? Does he keep tipping money down a hole on that car, (quoted $1,500 plus GST to fix) knowing there's probably a range of other problems coming shortly ? "

1. Log on to Trademe
2. Select Nissan Sunny/Sentra/2010-2014/80-90k
3. Find one for $3k ish (bonus points if its an old lady etc)
4. Kick tires + Buy

This would need a mind set change from friend as the Sunny is not as "cool" but the bonus is they go forever, dont cost $300 to fill and require minimal mechanical stuff. A bit like investing, would you rather look cool (PEB) or make money (Xero)?

Ford Falcons are rubbish vehicles - thats why Australia stopped making em. NZ was the only country that bought em.

On the other hand you could make the case quite easily that 280,000 km's on a vehicle with nothing other than regular servicing and the normal tyre and brake replacement and nothing major going wrong is a very good run. I've driven Ford Falcon's for many years and found them by and large quite good. What people now do who want a proper sized large sedan with strong performance at a reasonable price I don't know as even Chrysler have stopped importing their 300 sedan. (New Opel masquerading as a Commodore is just a mid sized vehicle).

Outlook maybe not as good as you hope, we will see Percy. I think the already pretty serious degree of business pessimism is a headwind for Truck sales going forward, (which will also affect Colonial motors of course as they noted in their half year report outlook). If Labour keep performing like a bunch of rank amateur communists masquerading as socialists and greenies we could easily see business pessimism plumb lows not seen since the depth's of the GFC...we live in "interesting" times. What I think is now clear is that the dramatic increases in fuel prices in Auckland in particular because of new Government initiatives will change car buying behavior.

[Snow Leopard]

9653

Seems like a reasonable value proposition. Even moderate growth & the regular dividend equals good returns over an investment timeframe.

However my enthusiasm for this company is tempered by the lack of a dividend supplement for overseas residents.

[percy]

9653

Seems like a reasonable value proposition. Even moderate growth & the regular dividend equals good returns over an investment timeframe.

However my enthusiasm for this company is tempered by the lack of a dividend supplement for overseas residents.

With TRA being also listed in Australia,it may pay to bring this to TRA's attention.
TRA's ceo Todd Hunter's email address is todd.hunter@turners.co.nz

[Beagle]

https://www.suzuki.co.nz/no-deposit-finance
Illustrating the point I made yesterday. No deposit 5 year finance at only 3.9%. Five year manufactures warranty, five years roadside assist.
N.Z. largest selling small car Suzuki Swift brand new from just $19,995 and only 4.6 L/100 km's fuel consumption.
Part of their website marketing is why buy used ? which I think is a fair question to ask. I think these sort of manufacturer supported deals are a headwind for used car sales.

[RTM]

https://www.suzuki.co.nz/no-deposit-finance
Illustrating the point I made yesterday. No deposit 5 year finance at only 3.9%. Five year manufactures warranty, five years roadside assist.
N.Z. largest selling small car Suzuki Swift brand new from just $19,995 and only 4.6 L/100 km's fuel consumption.
Part of their website marketing is why buy used ? which I think is a fair question to ask. I think these sort of manufacturer supported deals are a headwind for used car sales.

You need to get out and about a bit more Beagle. NZ is far different than the people I suspect live in your street and visit you in your office.

[winner69]

You need to get out and about a bit more Beagle. NZ is far different than the people I suspect live in your street and visit you in your office.

Probably right (to some extent)

Went to a funeral the othe day and the family didn't know he had so many youngish friends .....ha ha probably the less rich of us turning up for a few nice snadwiches and a hot coffee ....I'm told Kelburn / Khandallah / Karori funerals have the best grub.

[Beagle]

You need to get out and about a bit more Beagle. NZ is far different than the people I suspect live in your street and visit you in your office.

The local mall car park where hundreds are parked is always a good reality check. Its sad that the national average age of our fleet is now about 14 years old. It wasn't always that old. Latest new cars stat's out today are a sign that Jascinda's coalition's and its resulting significant effect on consumer and business confidence is starting to make itself felt in the vehicle sector. If we do go into a recession that could be a slight tailwind for Turners and their older vehicles.

[toddhunter]

There is no doubt the new car market has been buoyant off the back of aggressive market share growth and a strong NZD has meant the sort of great pricing mentioned in posts above. These all flow directly into the used car prices...the biggest influence on the used car pricing is what they new version of the same vehicle sells for.

Also important to bring some market sizing to the discussion as well...in the year to Dec 17 there were 1.142M used vehicle "change of ownerships". This was across dealer channels, and private to private channels. Over the same period there were 151k new passenger and light commercial vehicle registrations...reinforces the market research numbers I published earlier. A lot of the new car registrations will be rental fleets and corporate fleets so the true number of retail customers buying new cars is a lot less than the 151k.

What we like about the used car market is the following...
- Used cars is a less discretionary market than the new car market. In 2009 used car change of ownerships for the 12 months ending Dec 2009 were 886k, new car registrations were 70k.
- We control our go to market strategy. We don't have an OEM setting rules for how to execute in the market, lifting our rebate targets each year, telling us to invest huge amounts of capex in new buildings.
- check out our latest shareholder newsletter for the "container office" look we are implementing in our new Cambridge Terrace site in Wellington.

We have a great brand, great distribution, and great sources of supply of used vehicles...however as has been pointed out in previous posts we have work to do on the sales experience.

In FY13 Turners Auctions (pre Dorchester full acquisition) we made $5.8m NPBT...in FY17 this division made $12.3M, we have more than doubled the return in 4/5 years from focusing on this wholesale to retail transition. We are challenging ourselves from a growth perspective on other parts of the wider business. We are a business that delivers on what we say we will and I can assure everyone that the board and management are focused on EPS growth.

As an aside Beagle had asked earlier for my opinion on why some wealthy people drove old bangers and chose not to upgrade their cars. I think answer is "people". Some people choose this as part of their brand....they like being understated and under the radar. For others it will simply be the cost and hassle of change.

But what is undeniable is that most kiwis need a car to get to work and get their kids to school. Over 80% of household trips are taken in a car and this number has only been rising. Of course it doesn't mean to say it will be like this forever (perhaps we should be branching out into e-bikes!), but the vast majority of car buyers are looking to purchase a good reliable vehicle from someone they trust for under $15k. The used car market and the services like finance and insurance that support them are large and highly fragmented markets with plenty of opportunity in them.

[BlackPeter]

Thanks for that Todd. It is great to get your perspective - saves a lot of guess work.

[percy]

Thanks for that Todd. It is great to get your perspective - saves a lot of guess work.

It certainly does.........
So thanks from me too Todd.

ps.Tried to add to Todd's reputation,but I must spread it around.Not so easy to do...lol.

[Beagle]

Thanks from me as well to Todd and I appreciate you sharing your thoughts on some wealthy people's desire to fly under the radar as much as possible with consumerism including choice of vehicle. I wonder if it ever occurs to them that they and their children / grandchildren would be a lot safer in a newer car. (One of my wealthy clients swears his Audi S8 with its construction and crash protection systems saved his life from a drunk who hit him head on and will never buy anything different now).
Giltrap loves him as every few years he helps pay for their palace on Great North road in Grey Lynn.

Yes I think this Governments obsession with all things environmental including allocation of vast amounts of resource to cycle ways means e-bikes are a growth industry but sticking with motoring what about e-scooters ?...lots of them made in China now...now there's a little niche nobody seems to be currently exploiting !

[winner69]

Everybody needs a car

One of the 60%

https://www.stuff.co.nz/national/103658742/refund-ordered-for-the-perfect-car-that-only-drove-in-reverse

[Snoopy]

I have just done an exercise checking out returns over the '30th September to 30th September' year. Why those dates? Because it gives time for the March 31st end of year result to be declared and digested by the market. And it aligns with that other great motor vehicle financier: Heartland.



Share PriceSept 30th 2015Sept 30th 2016Sept 30th 2017


Turners Automotive Group$2.65$3.08$3.24
[/TR]
[/TR]


Note

September 2015 price adjusted for 10:1 share consolidation



Income ReceivedSale of RightsCY Q3 CY Q4CY Q1CY Q2


FY20160.72x 6.0cps


FY20170.72x7.0cps + 3.0cps3.0cps3.5cps


FY20182.26cps4.5cps+3.0cps3.0cps4.5cps
26c26c


Notes:

1/ Income in italics not earned in period following the 30th September date under consideration.
2/ 15th September 2017 was when a 1:10 rights offer (estimated see post 2203) at $3.02 issue closed. Shares were trading on the market at $3.19 on the issue dfate, creating a profit for each right held by the the rights holders of: 17/10 = 1.7c

Overall Share Growth 30/09/2015 to 30/09/201626c26c26c

$2.65 (1+g) = ($3.08 + 0.72x($0.06+$0.07) + $0.03) ) => g = 21%

Overall Share Growth 30/09/2016 to 30/09/2017

$3.08 (1+g) = ($3.24 + $0.017 + ($0.03 + $0.035 +$0.045 +$0.03) ) => g = 10.2%

Those are good growth figures for year one, but closer to index growth figures for year two.

SNOOPY

[winner69]

Snoops .....truely amazing ...especially when nearly everyone but percy calls it a dog (and that is being polite.)

Maybe he is the only smart one here ...unless you hold as well and then you are smart as well.

[Fox]

Saw the convertible notes (TRAHB) selling at a discount last week; $0.99 to be exact. With 2 more coupon payments and a face value return of $1.00 at Sept month end, that gives a guaranteed (touch wood) PV return of ~4.2% over the coming 4.5 months (~11% annualised :scared:). And thats without taking into account the 5% discount to 90-day VWAP if you're a betting man.

Unfortunately by the time I transferred some funds around some other punters took the feed and gobbled up the opportunity.

Still value to be found in this company, just have to look in the right places.

[Snoopy]

Saw the convertible notes (TRAHB) selling at a discount last week; $0.99 to be exact. With 2 more coupon payments and a face value return of $1.00 at Sept month end, that gives a guaranteed (touch wood) PV return of ~4.2% over the coming 4.5 months (~11% annualised :scared:). And thats without taking into account the 5% discount to 90-day VWAP if you're a betting man.

Unfortunately by the time I transferred some funds around some other punters took the feed and gobbled up the opportunity.

Still value to be found in this company, just have to look in the right places.

Fox, I agree that you cannot look to buy TRA shares without also looking at the TRA bonds (TNR bonds before that). That's because the TRA bonds also act as a 'right to buy' TRA shares at a future date. So the change in the TRA share price does influence the TRA bond price. So what was the historic return rate if you had bought bonds on 1st October 2015?



Bond PriceSept 30th 2015Sept 30th 2016Sept 30th 2017


TNRHA/TNRHB/TRAHB bonds$1.05$1.00$1.03
[/TR]
[/TR]


Notes

1/ TNRHA bonds (9.0% coupon) expired on 30th September 2016. Existing bond holders got a preferential entitlement to apply for the new TNRHB bonds (6.5% coupon) from that date.
2/ Ticker change from TNRHB to TRAHB on 23rd May 2017,









Income ReceivedSale of RightsCY Q3 CY Q4CY Q1CY Q2


FY20160.72x 2.375cps0.72x 2.375cps0.72x 2.375cps0.72x 2.375cps


FY20170.72x 2.375cps0.72x 1.625cps0.72x 1.625cps0.72x 1.625cps


FY20180.45cps0.72x 1.625cps0.72x 1.625cps



Notes

1/ Annual bond interest has been distributed quarterly and taxed at 28%,

2/ TRAHB Bondholders had a right to apply for new TRA shares in the share purchase plan of 15th September 2017. Each $1 of bonds held had an implied right to purchase 1/3.75 = 0.2666 shares. The application price for these new shares was set at $3.02. At SPP date there were $25,561m worth of TRAHB bonds on issue. For SPP purposes, these were the equivalent of:

$25.561m x 0.26666 = 6.816m extra shares

Confirmation of shares allocated (after scaling) only happened on October 2011.

3/ The number of TRA shares on issue after a separate share placement of $25m of shares to selected large holders and a nominal $5m for all holders was 84,685,506. We can use this figure and the actual number of shares placed to work out the actual number of shares issued in accordance with the September 2017 share purchase plan.



No. Shares after Placement and SPP84,685,506


less No. Shares before Placement and SPP74,523,527


less No. Shares in Placement8,278,146


equals Actual No. Shares issued in SPP1,883,833



For SPP issuing purposes the equivalent number of shares on issue were:



No. Shares before Placement and SPP74,523,527


plus Equivalent No. Shares before Placement and SPP represented by bonds6,816,266



equals Representative No. Shares before Placement and SPP represented by bonds81,339,793



We can now work out the pro-forma entitlement for representative shares to be:

81,339,793 / 1,883,833 = 1 new share for every 43 held (!)

However, the allocation isn't 'pro-forma' because even the big boys could only apply for $15,000 worth of shares ($15,000/3.02= 4966 new shares) as a maximum, and that would have been subject to scaling. There is a good chance that the larger shareholders would have been approached as part of the placement plan, and so wouldn't have bothered about an extra small top up through the SPP. If we define a larger shareholder as having 100,000 share or more, then 61,340,917 shares were held by larger shareholders. Take that number away from the pro-forma entitlement number and there were:

81,339,793 - 61,340,917 = 19,998,876

share equivalents owned by smaller holders to participate in the share plan.

19,998,876 / 1,883,833 = 1 new share for every 10 held (approximately).

This is the kind of allocation an applicant to the share price plan, without the benefit of hindsight might expect.



O.K.


What did this all mean for bondholders at the time, without the benefit of hindsight?



1/ We know that each dollar in a bond was regarded as the equivalent of 0.2666 of one share. SO
2/ The expected new share entitlement in the SPP at 1 for 10 was 0.02666 shares
3/ The new shares had a market price on the day of issue of $3.19 verses and application price of $3.02. That equates to a capital gain of 17cps.
4/ So each dollar in a bond could have collected) a projected capital gain of 0.02666 x 17c = 0.45c

0.45c per dollar effectively became my estimate of the 'option value' of the bond, over and above the interest payments.


--------



Overall Bond Growth 30/09/2015 to 30/09/2016

$1.05 (1+g) = ($1.00 + 0.72x($0.02375+$0.02375 + $0.02375 +$0.02375) ) => g = 1.75%

Overall Bond Growth 30/09/2016 to 30/09/2017

$1.00 (1+g) = ($1.03 + $0.0045 +0.72x($0.01625 + $0.01625 +$0.01625 +$0.01625) ) => g = 8.13%

At a casual glance this is an odd result. The coupon rate of the bond went down in the later period, yet the return went up! Certainly the option value of the bond realised by holding in the second period was not enough to offset the lower interest earned. The problem was the capital reduction in bond value between September 2015 and September 2016. This was caused by an concomitant fall in the TRA share price on the expectation that many shares would soon be available at $2.95 (less than the prevailing share price in the six months before September 2016). So the capital value of the bond went down as its option value evaporated.

SNOOPY

[percy]

Snoops .....truely amazing ...especially when nearly everyone but percy calls it a dog (and that is being polite.)

Maybe he is the only smart one here ...unless you hold as well and then you are smart as well.

The market says I am wrong.
The charts confirm I am wrong.
TRA's, CEO,Todd Hunter, posts on this thread; post #2157 page 144, and post #2196 page 147, confirm to me I am right.
Judgement day is not far away,infact next Tuesday the 29th May.
Either right or wrong.Simple as that.Buy/sell.Easy.

[Beagle]

Hope for your sake its not like Judgement day in Terminator 3 :eek2: in which case it might not be so easy to sell due to the worse than usual, (already very poor) liquidity.

[percy]

So do I..!!!!!.....
I am looking for an old fashioned Judgement Day.
And Todd did cometh forward with an outstanding result.
The non believers saw the errors of their ways,saw the light,and became true believers..
And I lived happily ever after,with the increased fully imputed dives....lol.

[LAC]

She'll be orite....

[Beagle]

Will they be brave enough to disclose in the headline profit announcement what the EPS growth is, if any ?...or does one need to actually lift the hood and do an engine diagnostic (so too speak) to work it out taking into account the weighted average number of shares on issue ? It would be a refreshing change if they made it crystal clear what the percentage change in EPS is.
Might get them a brownie point from me if they were a little more transparent about this rather than the usual trumpeting of growth without nary a mention of EPS.

[percy]

There is no doubt the new car market has been buoyant off the back of aggressive market share growth and a strong NZD has meant the sort of great pricing mentioned in posts above. These all flow directly into the used car prices...the biggest influence on the used car pricing is what they new version of the same vehicle sells for.

Also important to bring some market sizing to the discussion as well...in the year to Dec 17 there were 1.142M used vehicle "change of ownerships". This was across dealer channels, and private to private channels. Over the same period there were 151k new passenger and light commercial vehicle registrations...reinforces the market research numbers I published earlier. A lot of the new car registrations will be rental fleets and corporate fleets so the true number of retail customers buying new cars is a lot less than the 151k.

What we like about the used car market is the following...
- Used cars is a less discretionary market than the new car market. In 2009 used car change of ownerships for the 12 months ending Dec 2009 were 886k, new car registrations were 70k.
- We control our go to market strategy. We don't have an OEM setting rules for how to execute in the market, lifting our rebate targets each year, telling us to invest huge amounts of capex in new buildings.
- check out our latest shareholder newsletter for the "container office" look we are implementing in our new Cambridge Terrace site in Wellington.

We have a great brand, great distribution, and great sources of supply of used vehicles...however as has been pointed out in previous posts we have work to do on the sales experience.

In FY13 Turners Auctions (pre Dorchester full acquisition) we made $5.8m NPBT...in FY17 this division made $12.3M, we have more than doubled the return in 4/5 years from focusing on this wholesale to retail transition. We are challenging ourselves from a growth perspective on other parts of the wider business. We are a business that delivers on what we say we will and I can assure everyone that the board and management are focused on EPS growth.

As an aside Beagle had asked earlier for my opinion on why some wealthy people drove old bangers and chose not to upgrade their cars. I think answer is "people". Some people choose this as part of their brand....they like being understated and under the radar. For others it will simply be the cost and hassle of change.

But what is undeniable is that most kiwis need a car to get to work and get their kids to school. Over 80% of household trips are taken in a car and this number has only been rising. Of course it doesn't mean to say it will be like this forever (perhaps we should be branching out into e-bikes!), but the vast majority of car buyers are looking to purchase a good reliable vehicle from someone they trust for under $15k. The used car market and the services like finance and insurance that support them are large and highly fragmented markets with plenty of opportunity in them.

Beagle.
I think you missed;
"I can assure everyone that the board and management are focused on EPS growth."

[Beagle]

No I didn't miss that Percy. Lets see how they go.

[LAC]

https://www.nzx.com/announcements/318617

Its out

[winner69]

A 15% increase in eps ....that’s all that matters

Stunning


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/318617/280090.pdf

[LAC]

A 15% increase in eps ....that’s all that matters

Stunning


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/318617/280090.pdf

And 5c divie.... I am good with that.

[percy]

Bingo..!!!!............
Turners delivers.They do what they say they will do.
Well done .
Thank you Todd,directors, and all the hard working staff.
And the outlook looks great too.!
I could not ask for more.!

[JayRiggs]

I'm relieved. I've been averaging down on this and been in the red for nearly a year. Hopefully we'll see a re-rating upwards.
Well done Turners!

[McGinty]

Bingo..!!!!............
Turners delivers.They do what they say they will do.
Well done .
Thank you Todd,directors, and all the hard working staff.
And the outlook looks great too.!
I could not ask for more.!

Congrat's Percy, you've been a loyal supporter of TRA through a very turbulent year with the SP dropping up to 27% at the lows.

I cut TRA back in Oct at $3.18 after the SPP fiasco and the lack of EPS growth (due to the dilution).

Now that the TRA story remains in tact, I will keep an eye on for a possible entry. There are still some physiological barriers in the SP as most holders will still be underwater so we might see some price consolidation before the up-trend is re-established.

[RTM]

Bingo..!!!!............
Turners delivers.They do what they say they will do.
Well done .
Thank you Todd,directors, and all the hard working staff.
And the outlook looks great too.!
I could not ask for more.!

Yahooo...with all the negative chit chat from some here I’ve been holding my breath to see how this would work out. Seems to be a great result, increased dividend, increased dividend % of profit in future, increased earnings per share.

Good news.

[Beagle]

Very solid result and outlook. Can't argue with EPS growth of 15%.
Outlook also looks good. Depending upon how the convertible note conversion works out in terms of how many new shares issued we could be looking at around 10% EPS growth for FY19 to about 32 cps. At $3 that puts TNR's on a FY19 PE of just 9.4.
Dividend lift to 50 - 60% of EPS at 55% would suggest dividends will be circa 32 cps x 0.55 = 17.6 cps fully imputed or 24.5 cps gross.
At $3 that gives a gross yield of 24.5 / 300 = 8.2%. Ability to grow this dividend over time should also be noted as they're holding back circa 45% of earnings for future growth. Fits Percy's model of wanting increased income in retirement and attractive for a lot of other investors as well I would think.

Those numbers make a pretty good case for investing in TNR. Maybe we have finally seen the end of the SP correction ? Maybe used vehicles will do better than new now Jascinda and her team have "so successfully" tanked business confidence ?
Very good effort from Turners and thanks again to Todd Hunter for coming on here and sharing.

[LAC]

Those numbers make a pretty good case for investing in TNR.

TRA:) In with the new

[BlackPeter]

Bingo..!!!!............
Turners delivers.They do what they say they will do.
Well done .
Thank you Todd,directors, and all the hard working staff.
And the outlook looks great too.!
I could not ask for more.!

Kudos to you, percy for holding the faith in this company all the time when many others started to doubt!

Great result ... and while the future is always uncertain - it clearly looks like they are doing at this stage a quite good job in growing the business.

Just listened to the analyst briefing - and it sounds like we don't need to expect another deeply discounted CR this year (which is a blessing).

Obviously - we will need to see what the convertible bonds do this year to the EPS ... but it still feels that the share is at the current SP somewhat undervalued.

Discl: much happier holder now - and averaged down this morning by buying some more at the discounted rate of $3 ;) (not to forget - including a 5 cents fully imputed dividend);

[sb9]

Kudos to you, percy for holding the faith in this company all the time when many others started to doubt!

Great result ... and while the future is always uncertain - it clearly looks like they are doing at this stage a quite good job in growing the business.

Just listened to the analyst briefing - and it sounds like we don't need to expect another deeply discounted CR this year (which is a blessing).

Obviously - we will need to see what the convertible bonds do this year to the EPS ... but it still feels that the share is at the current SP somewhat undervalued.

Discl: much happier holder now - and averaged down this morning by buying some more at the discounted rate of $3 ;) (not to forget - including a 5 cents fully imputed dividend);

Yes indeed, outstanding effort from Turners. Bought few at the open too....

[Beagle]

Always good to have a good robust debate. I for one have been happy to have not held while the SP has been in fairly steep decline over the last year !
Agree with BP's assessment about it being slightly undervalued at the current SP. Deserves to be rerated to a PE of at least 10, possibly 11-12 over the year ahead if they continue to deliver as promised. Difficult to find stocks growing EPS and dividends at a forward PE of 9.4.
Acquisition of Autosure was a game changer and the business model is scale able. Right cars hasn't been quite 100% right though, seems they have under-performed a little ?

[Joshuatree]

Bingo..!!!!............
Turners delivers.They do what they say they will do.
Well done .
Thank you Todd,directors, and all the hard working staff.
And the outlook looks great too.!
I could not ask for more.!

What a rrrrrRRRRRipper, thanks percy:t_up:

[couta1]

That must be Beagle wanting 80000 at $2.99.

[BlackPeter]

...
Right cars hasn't been quite 100% right though, seems they have under-performed a little ?

I think I heard in the conference call something about inventory written off. Maybe they paid a bit too much for the stock when they purchased the company - the risks of trusting a used car dealer ;)?

Hopefully just a one off they will be able to learn from ...

[percy]

I think I heard in the conference call something about inventory written off. Maybe they paid a bit too much for the stock when they purchased the company - the risks of trusting a used car dealer ;)?

Hopefully just a one off they will be able to learn from ...

The legacy issue of "old stock" at Buyright should be sorted with the buy out.
Too early to make judgement on the "bonds" which mature later this year.Depending on what interest rate TRA offer,will govern the roll over/redemption.I would guess they will replace them with a larger issue.Existing bond holders should get first right to any new issue.

[LAC]

I like the mention of electric vehicles in the report.
I hope Todd is looking at clipping the ticket on Auto mechanics as that bit will really complement the Autosure business. Having the cars be fixed and serviced at "Turners own auto mechanics" will be great and lots of added value when up selling services.

[percy]

I brought more today for the wife at $2.99.We now have the same amount each.

[couta1]

That must be Beagle wanting 80000 at $2.99. I see you got your parcel Beagle, good on ya mate. PS-Have found myself back in the fold also, mind you with my target price of $3.83, I have to be aye.

[steveb]

just looked at the ASX and the SP is sitting at AU$3.00 is there something wrong with ASB,can someone check ANZ bank?

[blackcap]

just looked at the ASX and the SP is sitting at AU$3.00 is there something wrong with ASB,can someone check ANZ bank?

$2.98 at ANZ....

[couta1]

I brought more today for the wife at $2.99.We now have the same amount each. So it was you who bought that 80000 and not Beagle after all.

[percy]

So it was you who bought that 80000 and not Beagle after all.

No.I only brought the wife 10,000, to add to the 40,000 she already owned.

[couta1]

No.I only brought the wife 10,000, to add to the 40,000 she already owned. Lol, nice one Percy, looks like I may have to buy 40000 to add to the 10000 I bought today, nothing wrong with doing things in reverse order.

[percy]

Lol, nice one Percy, looks like I may have to buy 40000 to add to the 10000 I bought today, nothing wrong with doing things in reverse order.

Anyway that works for you.!!.???..lol.

ps.50,000 for the wife,50,000 for me..?.

[percy]

just looked at the ASX and the SP is sitting at AU$3.00 is there something wrong with ASB,can someone check ANZ bank?

I have never seen any TRA trade in Australia.
It would appear as those placements shares, that were taken up by Australians came straight back onto the NZ market.
Those plus the Hugh Green Family Trust sell out, caused in my opinion the weakness in TRA's share price.
It would appear there are still some TRA shares in weak hands.Maybe when Craigs and FNZC capital issue research on this result we may see more buying support.In the end the fundamentals together with TRA's ability to pay increasing dividends will see TRA rerated.The low share price does leave TRA open to be taken over.

[Snow Leopard]

I have never seen any TRA trade in Australia....

total ASX Trades: 1 (ONE)

1 (of 1): 2,000 at $3.00 on 7-Feb-2018.

[blackcap]

I have never seen any TRA trade in Australia.
It would appear as those placements shares, that were taken up by Australians came straight back onto the NZ market.
Those plus the Hugh Green Family Trust sell out, caused in my opinion the weakness in TRA's share price.
It would appear there are still some TRA shares in weak hands.Maybe when Craigs and FNZC capital issue research on this result we may see more buying support.In the end the fundamentals together with TRA's ability to pay increasing dividends will see TRA rerated.The low share price does leave TRA open to be taken over.

Well said Percy, there may be short term weakness in SP. That does not worry me, in fact I will use it to top up. The dividend going up to 5 was hoped for and what ppl need to realise (some may not) is that its a quarterly dividend. Note that the register is very open with Hugh Green Trust selling out.
Welcome back to the fold Beagle, we missed you :)
This could be re-rated quickly once investors see the potential for increasing EPS and increasing dividends (fully imputed).

[steveb]

thanks for that percy was wondering why there was no depth

[Beagle]

I see you got your parcel Beagle, good on ya mate. PS-Have found myself back in the fold also, mind you with my target price of $3.83, I have to be aye.


Yeap, I got some today mate. http://www.scoop.co.nz/stories/BU1805/S00892/turners-posts-33-gain-in-fy-profit.htm

[RupertBear]

So do I..!!!!!.....
I am looking for an old fashioned Judgement Day.
And Todd did cometh forward with an outstanding result.
The non believers saw the errors of their ways,saw the light,and became true believers..
And I lived happily ever after,with the increased fully imputed dives....lol.

Kudos to you Percy for DYOR and believing in it! :cool: I have been watching this one for a while but havnt been brave enough to enter until today when I nibbled a wee few at $2.99 :)

[percy]

Beagle.
I don't know whether it is better having you outside the tent peeing in,or inside the tent peeing everywhere.?
Time will tell.........................lol.

[horus1]

Bought some to add. Should have bought last week. They are a long term hold.Well run and made a mistake on the issue but CEO is repairing it with his attitude.

[percy]

Kudos to you Percy for DYOR and believing in it! :cool: I have been watching this one for a while but havnt been brave enough to enter until today when I nibbled a wee few at $2.99 :)

Hi RupertBear.I sold my SLI today at .3054 to help fund the wife's TRA purchase.

[RupertBear]

Hi RupertBear.I sold my SLI today at .3054 to help fund the wife's TRA purchase.

:scared: OH NO! Looks like I will be swimming naked and alone then :( unless Couta bought your shares! :D

[couta1]

:scared: OH NO! Looks like I will be swimming naked and alone then :( unless Couta bought your shares! :D HaHa, time for you to follow Percy's example and ditch that Slow Leaching Investment and buy some more Terrific Returns Awaiting.

[couta1]

Beagle.
I don't know whether it is better having you outside the tent peeing in,or inside the tent peeing everywhere.?
Time will tell.........................lol. Always preferable to have your tent peed on than your person.

[Beagle]

Beagle.
I don't know whether it is better having you outside the tent peeing in,or inside the tent peeing everywhere.?
Time will tell.........................lol.

LOL Well trained Beagle's don't pee inside when they know where the door is. Better I'm inside the tent so too speak and then the yapping is in tune with the companies music :)

[Joshuatree]

Really think dog owners should bagcatch their dogs pee just like they double bag doggie doopoo:t_up:.

[percy]

LOL Well trained Beagle's don't pee inside when they know where the door is. Better I'm inside the tent so too speak and then the yapping is in tune with the companies music :)

Glad my post was taking taken in good grace.
Much more fun than just a "welcome onboard".!!..lol.
Years of great feeds coming up for us all..!

[janner]

Glad my post was taking taken in good grace.
Much more fun than just a "welcome onboard".!!..lol.
Years of great feeds coming up for us all..!

I beg to differ ..