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

[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/103...ove-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 Price	Sept 30th 2015	Sept 30th 2016	Sept 30th 2017
Turners Automotive Group	$2.65	$3.08	$3.24

Note

September 2015 price adjusted for 10:1 share consolidation

Income Received	Sale of Rights	CY Q3	CY Q4	CY Q1	CY Q2
FY2016			0.72x 6.0cps
FY2017		0.72x7.0cps + 3.0cps	3.0cps		3.5cps
FY2018	2.26cps	4.5cps+3.0cps	3.0cps		4.5cps

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.