There is a perspective that you can look at it from both sides.
In good times people update their cars.
And in bad times they repair them.
Guess you can make money on both sides. Do Turners do repairs...didn't think they did.
Don't think they do, either.
But then - how much money would you invest into repairing a 20+ year old car (excluding vintage cars ;)?
Repairs on a very old car quite easily get more expensive than buying a newer car. Now - if its not economical to repair it, and you still need a car to get to work, what would you do next?
You've also got to consider the downtime and inconvenience of vehicle breakdowns especially for those people who are relying on their vehicles to get to / from work or for business meetings or who need to pick up kids / grandkids from school at defined points in time. Owning vehicles older than 15 years has significant downsides in my opinion, (albeit a given that depreciation has run its course). Autosure breakdown insurance is fine but there's no insurance for all the inconvenience and downtime just the cost of the repair less the excess of course.
Wish you could convince my parents of the downsides of owning older cars! Can't for the life of me get them to get rid of their two old clunkers and replace them with something newer!
Still, need to have the retirement village chat to them as well.....that's a whole another level of "discussion":confused:
Your parents are not alone.;From Turners Investor Presentation 27th July 2017,page 9.
Average age of a car in NZ is 14 years.
20% of cars [aprox 700,000] are more than 20 years old.
23% of NZ drivers say they are very likely or extremely likely to buy a car in the next 12 months.
It is also extremely likely I will be adding to our TRA holding this afternoon or tomorrow morning at $3.44.
The SP cannot get traction if major shareholders keep flooding the market with shares.
The very large sell down by Hugh Green family was always going to take time for the shares to find loving,caring homes.
I would think this parcel is just some one taking quick profits,from that sell down.
I have seen John Ryder sell out of Ryman very early on,Mark Stewart sell out of Ebos before they took off,so although I watch who is buying/selling I pay more attention to the actual company's fundamentals.
Milford again.?...lol.
Just received the contract note.Very please to get the number I asked for.
Yes very nice , as I have been watching the TRA sp, and was thinking of adding to our holding at over $3.50.
Funny thing the market,all the latest results for shares I hold have been great,and the bonus takeover for OIC a total surprise.
Just getting myself ready for the market to give me a good kick up the backside, and say you are still a dummy.!!!! lol.
Since the first year of the 'modern' incarnation of Turners in 2015, the breakdown between divisions in EBIT terms I have modelled as below.
EBIT FY2015 EBIT FY2016 EBIT FY2017 Automotive Retail $2.268m $9.392m $13.105m Collection Services NZ $4.907m $6.119m $5.932m Collection Services Aus $0.128m $0.005m -$0.038m Finance $9.504m $14.854m $13.984m Insurance $1.739m $2.617m $2.998m Total $18.547m $32.987m $35.981m
I have always like the balance the 'debt collection' arm(s) of Turners gives to the overall business. Put simply, if the loan market goes down, then we can expect a corresponding increase in debt collection activity. Since 2015, Turners have built up the automotive retail, finance and insurance sides of the business with acquisitions. However, the debt collection side of the business has not been built up. In FY2015 the Australian and NZ loan collection business made up 27.2% of the EBIT of the whole business. In FY2016 that reduced to just 18.6%, and in FY2017 the figure was down to 16.4%.
This means that Turners as a group has become less resilient to possible changes in the automotive market. A downturn in the automotive market will affect 83.6% of the business as 'automotive' 'finance' and 'insurance' are now very much linked.
I find it very curious that Turners have now a secondary listing in Australia when earnings from that market are minuscule (negative if you apportion costs the way I have). Are the Aussies really going to be keen to come in and help fund future expansion? Or is the Oz listing all part of some grandiose plan that is getting very far away from the core business here in NZ?
The growth of Turners is good. But the reduction in resilience needs to be watched.
SNOOPY
Come on Snoopy put your thinking cap on.
The Australian listing is not so Paul Byrnes can claim family holidays to Aussie as business fact finding trips.
Think little ChCh business Ebos, who do 80% of their $7 billion turnover, in Australia.
Do you think TRA will be doing 80% of their business in Australia in 10 years time,or would you guess 20 years?.No Australian business is going to accept NZ only, listed scrip as part payment.
Resilient? Downturns in the motor trade happen,but the trade recovers very quickly.The huge increase in vehicles over the past few years has grown the opportunites for TRA.
Vertical integration of vehicle imports,vehicle/equipment sales,finance and insurance,means TRA are a totally focussed business,which is further scalable in Australasia.
I would also point out EC Credit Control does not rely on TRA as a customer.The Australian listing will benefit their dealing with their Australian clients straight away.
ps.Most probably take Paul Byrnes less time to get to Brisbane or Sydney than Dunedin.Few more people there too.
If you have a great business model why not roll it out.!
After I added to my TRA holding yesterday, I looked at the trust I help out with's portfolio.The trust only had TRAHB [bonds].
We therefore added some TRA shares to the portfolio today buying at $3.51.