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

[percy]

If you're going to track this mate, kindly note that CMO presently trades cum a 31 cps fully imputed dividend so theoretical ex divvy price is $7.47. Goes ex very shortly.

Have done so.
I look forward to seeing which one out performs the other, over the next two or three years.
I should point out, I expect TRA's sp to double with in five years.

[winner69]

I see Milford participated in the $3.02 SPP and are now over 5%.

They were all on market purchases it says

Funny dates but average 302

[blackcap]

They were all on market purchases it says

Funny dates but average 302

That bit got me a bit confused too.. the dates, on market purchases, but averaging $3.02. Very very coincidental indeed.

[sb9]

That bit got me a bit confused too.. the dates, on market purchases, but averaging $3.02. Very very coincidental indeed.

Could be that they treat the SPP participation as on-market purchase

[LAC]

I should point out, I expect TRA's sp to double with in five years.

Bold call My spreadsheet isnt going to 5 years but I have it at $5.62 in 3 years (2021) so at current price of 3.18 I can also see similar (if there isnt anything drastic that takes place in the world)

[winner69]

That bit got me a bit confused too.. the dates, on market purchases, but averaging $3.02. Very very coincidental indeed.

..and not that volume in last few days either

[percy]

Bold call My spreadsheet isnt going to 5 years but I have it at $5.62 in 3 years (2021) so at current price of 3.18 I can also see similar (if there isnt anything drastic that takes place in the world)

Not as bold as you.
I prefer your figures to mine...
Near $8.00 in 5 years, if we extend your 3 year growth rate to 5 years.
Please keep me updated......lol.
We certainly are "well positioned."

[Beagle]

Have done so.
I look forward to seeing which one out performs the other, over the next two or three years.
I should point out, I expect TRA's sp to double with in five years.

As do I. I would be keener if they weren't issuing so many shares. Its one thing to grow profit by 26% forecast but quite another to only grow EPS by 9% and don't forget there will be a lot more shares issued in FY18 when a lot of the convertible note holders convert their $25m worth of notes to shares. I expect another convertible note issue for a further term of two years to roll on from the existing one and a further capital raise in the intervening year in FY19 similar to this one currently being done so I'm expecting ongoing capital raises annually of ~ $25m...Trust you're modelling that into your EPS growth expectations. I've noted these guys have a pretty intense hunger for new capital and I'm doubtful this pattern will change in the near future.

[percy]

As do I. I would be keener if they weren't issuing so many shares. Its one thing to grow profit by 26% forecast but quite another to only grow EPS by 9% and don't forget there will be a lot more shares issued in FY18 when a lot of the convertible note holders convert their $25m worth of notes to shares. I expect another convertible note issue for a further term of two years to roll on from the existing one and a further capital raise in the intervening year in FY19 similar to this one currently being done so I'm expecting ongoing capital raises annually of ~ $25m...Trust you're modelling that into your EPS growth expectations. I've noted these guys have a pretty intense hunger for new capital and I'm doubtful this pattern will change in the near future.

I admire the way TRA have developed the business.Each division scaled up.The model has moved from wholesaling vehicles to more higher margin retail sales.The addition of Buy Right cars gives the motor vehicle sales division scale.The ongoing arrangements with MTF give the fianance division scale.The Autosure acquisition gives the insurance division scale.The strengthened capital base gives TRA the capacity for property or vehicle sales acquisitions.So everything they have done over the past few years has greatly improved the business.This greatly improved business, now has the scale to produce eps growth,not as high as was expected this year,but in future years.And yes they will most probably need to raise further capital to fuel their huge growth in the not too distant future.This capital raise coming after the Hugh Green sell down,will focuss the directors' attention as they all have a great deal of their own skin on the line.No other business in the motor vehicle sector has the growth opportunities TRA has.And they are ready to take those opportunities.

[Beagle]

I admire the way TRA have developed the business.Each division scaled up.The model has moved from wholesaling vehicles to more higher margin retail sales.The addition of Buy Right cars gives the motor vehicle sales division scale.The ongoing arrangements with MTF give the fianance division scale.The Autosure acquisition gives the insurance division scale.The strengthened capital base gives TRA the capacity for property or vehicle sales acquisitions.So everything they have done over the past few years has greatly improved the business.This greatly improved business, now has the scale to produce eps growth,not as high as was expected this year,but in future years.And yes they will most probably need to raise further capital to fuel their huge growth in the not too distant future.This capital raise coming after the Hugh Green sell down,will focuss the directors' attention as they all have a great deal of their own skin on the line.No other business in the motor vehicle sector has the growth opportunities TRA has.And they are ready to take those opportunities.

Enjoying this good healthy debate. I don't disagree with you Percy and there's clearly cross selling opportunities between various divisions of the company and don't disagree that with increased size comes scale advantages and hopefully head office efficiencies BUT, (you knew there was a BUT coming eh mate ) I see FY18 as a year of big growth for them that may not necessarily be replicated to the same extent off a higher base for FY19. This is the first year they are fully integrating Autosure and cross selling that service to Turners and Buy Right cars customers, the first full years ownership of Buy Right cars and they are aiming for just 9% EPS growth with these two major acquisitions and the cross selling opportunities they provide. What I don't see is how they're going to generate the same EPS growth next year without the same growth synergy and cross selling opportunities presented as a brand new thing again ? Sure they can buy another dealership and gain scale and offer finance and insurance services but even if we assume they can grow EPS at 9% per annum for the next five years at the same rate as for FY18, (Clearly I have reservations they can), and if we assume they stay on the same forward PE of about 12.5 we get compounded EPS growth x 5 years at 9% totaling 53.9% which is a long way short of the SP doubling so you are appear to be expecting much, much stronger EPS growth in future years even on a materially expanded capital base than I am.
Well have to agree to disagree on that one...put me in the doubting Thomas category. They seem very proud of their projected 26% profit growth target this year but not a single mention of the real EPS profit growth of only 9%. It'll be interesting to see how this play's out. I have a pretty decent stake in this one through the bonds so am watching with quite a material pecuniary interest.