Hasn't stopped him getting into big trouble though has it lol
Classic...……………………………...lol.
Back on topic. History shows that the bond conversion period coincides with a low period in the SP and it rebounds later. I am going to run with that and complete my bond conversion option paperwork with full share conversion election and put it in the letterbox quickly before I change my mind. (This bob each way thing has possibly got a little out of hand and we need some push back and decisiveness)
Reading the last few posts I find them funny as a play...….lol.
All the time Turners are improving their business.
Wasn't Beagle talking about Quantum Physics just then , im a bit confused:confused:
I make a point of not taking any Turners result at face value. It seems inevitable that once you delve into the results something comes out a bit smelly. And so it has proved with the FY2018 result. The key to 'cleaning out the garbage' is once again found under note 7 (the detail of the 'Profit Before Tax', and in particular the section marked 'Other Income'..
There you will find a very significant figure of $2.664m which is a 'Fair Value Gain on Contingent Consideration.'
Say what??? If there is a heading you can't understand, it often pays to look under the general heading of 'insurance' for further clarification. That took the nose of this hound to p76, and the heading 'Insurance Contracts' threw up the following detail.
Change in Discount rate 3.08% to 2.61% (Insurance Contracts) -$0.120m Difference between Actual and Assumed Experience (Insurance Contracts) $2.491m Difference between Actual and Assumed Experience (Life Investments) $0.294m Total $2.665m
Within the bounds of the third decimal place rounding error, this is in agreement with the $2.664m which is a 'Fair Value Gain on Contingent Consideration.' I don't think this is a co-incidence. While this extra profit is real, I believe it is due to the ups and downs of markets and/or settlements of insurance contracts. These kinds of gains are not sustainable year to year. So the underlying profit for TRA was significantly less than the headline figure quoted. The same can be said for the money made on the 'revaluation gains on investments', 'revaluation gain on investment property' and the 'gain on sale of property plant and equipment'. In my judgement the actual comparable net profit gain, the figure that should be used when comparing results from year to year should be adjusted from the headline figure as follows:
Operating Net Profit = $23.192m - 0.72x$2.664m - ($0.590m+$0.820m+$1.000m) = $19.085m which is 18% lower than the headline figure.
With 84.802m shares on issue at balance date this equates to 'earnings per share' of 22.5cps
At today's trading price of $2.94, this puts TRA on an historical PE of 13.0
That looks 'about right' and shows that at under $3, TRA may not be quite the bargain that some think. Maybe Mr Market knows what he is doing after all?
The other element that must be factored into the 'profit growth' is the ever increasing number of shares on issue. I have added this information into the table below via an 'earnings per share' calculation..
FY2014 FY2015 FY2016 FY2017 FY2018 NPAT (Turners Limited) (A) $3.823m $8.595m $15.332m $16.789m $19.085m Shareholder Equity (Turners Auctions :TUA) $13.378mm Shareholder Equity (Dorchester Pacific: DPC) $74.052m Shareholder Equity (Turners Limited: TNR) $121.002m $129.812m $171.716m $214.323m Total Combined Shareholder Equity (B) $92.430m $121.002m $129.812m $171.716m $214.323m Shares on Issue EOFY {C} NM 63.077m 63.431m 74.524m 84.802m eps {A}/{C} NM 13.6c 24.2c 21.8c 22.5c Return On Equity (A)/(B) 4.1% 7.1% 11.8% 9.8% 8.9%
Note: I have also now normalized the tax treatment of the FY2015 result, as this gives a better basis for comparison.
It is interesting to see that while share price has gone nowhere over the last two years neither has Operating NPAT. And that correlation might not be a co-incidence!
SNOOPY
Good you've got the time to get your snout deep in the accounts mate. I don't know how you get the time for all this but I for one am glad you do and I am also glad I have a very modest stake in these. Looks like as I suspected all along Colonial Motors is better value.