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

[biker]

..............


At these prices starting to get back on the accumulate radar again

Agree blackcap.
Also latest disclosure showed director Matthew Harrison buying over 4 million shares off Geoff Ross for $1.2 million.( 27c per share.) A fairly convincing vote of confidence I would have thought.
(One could speculate that Geoff Ross needs the money for another MOA cash issue. )

Disc. Hold quite a few and bought more recently at 27c

[Jay]

They must be doing alright on the car sales.
Mate just sold a car via auction, was offered $2000 by them cash and they would then sell - their estimated auction price was $2500 -$3500.
He put up for auction, go rung up before hand as someone had offered $2500 (the reserve) - went to auction - sold for $4200 and so got about $3800 after commission and auction fee - not sure why they have both!
So if he just took the cash they would up 2 grand instead of $400

[Leftfield]

Interesting developments...

Turners Limited (NZX : TNR) today announced it has entered into an
unconditional agreement to purchase Christchurch based Southern Finance
Limited (incorporating South Island Vehicle Finance and K Finance).

Southern Finance is an established finance company in the used vehicle
finance market and has been active in the South Island for close to 20 years
with extensive client and referrer networks in Christchurch and throughout
the South Island. Loans are originated through motor vehicle dealers,
finance brokers, strategic partnerships and direct lending.

"We expect the acquired business to immediately contribute around $750,000
p.a. earnings before interest and tax with this increasing to $1 million
after the first year. Additional synergies will arise in areas such as
insurance, IT
and compliance costs although we have not factored these in to our forecast
returns".

The purchase price is $5.0 million for the net assets of approximately $3.3
million and goodwill of $1.7 million. The consideration will be paid in
cash on the settlement date, 31 July 2015, and will be funded from bank
borrowings.

[Hmm]

https://www.nzx.com/companies/TNR/announcements/267673

Turners acquires another small business on a forward looking P/E of 5. Seems strange that this wasn't considered a price sensitive announcement?

[biker]

[QUOTE

.....Seems strange that this wasn't considered a price sensitive announcement?[/QUOTE]

Typical TNR low key approach.
Another good purchase.
One day the market will wake up to the consistent positive management of this company. Until then the only thing required is patience.

Disc. Hold quite a few so I could be biased

[percy]

Although not a big acquisition it gives TNR a beach head to build on in the South Island.
A positive step.

[Snoopy]

Snoopy, Now the share price has reached 28.5c, my return on converting TUA to DPC shares at 25c has nearly surpassed the 18% return on the bonds that you will get in 2 years.

I'm happy with the DPC strategy of issuing shares if they are eps accretive.

Half year results are imminent.

How things have turned. Noodles wrote the above in November 2014. The shares went on to peak at 35c, but now they are back to 25.5c, just above the 25c issue price. No doubt noodles sold out on the high at a profit and reinvested the proceeds earning 2% in his bank account. But maybe not. If we don't hear from him in the next few days we can safely assume he is still hunkered down in the Turner's share bunker, cursing his inaction.

Next year in September 2016 I have a chance to convert by bonds in to shares at a 5% discount to market price. So at 25.5c, my Turners bonds will convert to shares at only 24.2c. Much better than the 25c noodles got his shares at. Of course in the interim my 9% bonds have given me a much better cash return as well. I am so much better off taking all but a token of my TUA converted holding as TNR bonds! Of course markets change and so by September 2016 I may be the one who looks a bit foolish.

SNOOPY

[blackcap]

Gotta love that bit at the end of the announcement Time for you to get back in Percy?

TNR
10/09/2015 13:51
ASSET
NOT PRICE SENSITIVE
REL: 1351 HRS Turners Limited

ASSET: TNR: Turners buys property for truck and machinery growth

10 September 2015

Company Announcement

TURNERS BUYS FURTHER PROPERTY FOR TRUCK AND MACHINERY GROWTH

Turners Limited (NZX : TNR) today announced its subsidiary Turners Group NZ
(formerly Turners Auctions) has purchased a property in Hillsborough,
Christchurch for $2.5 million to accommodate its growing truck and machinery
business.

The move reflects the strategy of separating trucks and machinery premises
from the traditional car business.

In the last 12 months, two new premises, a $4 million property purchased in
Roscommon Road, Auckland and a leased site in Christchurch have been
developed as part of the focus on trucks and machinery. However, with sales
tracking at over 40% up on the same period last year, both sites are already
constantly full.

Turners Limited CEO and Executive Director, Paul Byrnes commented:
"The significantly higher used trucks and heavy machinery sales activity has
more than justified the property investments; but the whole Turners Group
NZ business is performing particularly well with profit for this financial
year up over 30% on the corresponding pre-acquisition period".

Turners Limited Annual Meeting will be held at the Aotea Centre, Auckland on
Wednesday, 16 September 2015 at 11.00 am.

ENDS

For further information please contact:

Paul Byrnes
CEO/Deputy Chairman
Turners Limited
DDI: (09) 308 4988
Mobile: 021 644 441

Grant Baker
Chairman
Turners Limited
Mobile: 021 729 800
End CA:00269934 For:TNR Type:ASSET Time:2015-09-10 13:51:18

[Snoopy]

On 9th September 2014, Dorchester announced they had secured a bank debt facility of up to $39.55m to fund the acquisition.

In the same press release the projected debt required to be taken on in repect of 100% acquisition of Turners (which is what happened) was declared as:

(iii) Acquisition of 100% Shareholding
(Purchase of 80% in addition to the current 20% shareholding)
Share issue at $0.25 $30.0m
Bonds $18.0m
Bank Debt $18.0m
$66.0m

So this means the bank debt facility projected to be available to the rest of DPC was:

$39.55m - $18m = $21.55m

Looks like Dorchester's actual three way funding mechanism for acquiring TUA was a little different to what management expected. From p4 of the interim HY2015 report.

Share issue at $0.25: 125.8m at 25c = $31.4m (4.8% higher than projected)
Bonds: $23.2m@ $1.00 =$23.2m (28.9% higher than projected)
New Bank Debt: $10.0m (45% lower than projected)

The closing comment in the interim report says:

"The final consideration mix and successful capital raise to fund the Turners acquisition has resulted in a balance sheet with headroom for further merger and acquisition activity." ($29.55m of borrowing headroom by my calculation)

The subsequent acquisition of "Greenwich Life" announced on 10-04-2015, and "Southern Finance" on 30-07-2015 certainly made sure the 'new' TNR made those acquisitive ambitions a reality!

I should note that although this information is in the HY2015 interim report with accounts dated 30th September 2014, the new shares, bonds and new debt were allotted after balance date. So the interim account figures do not represent the post Turners Auctions acquisition position.

Unfortunately the detail in the HY2015 press release, outlining the match or mismatch of maturing customer loans to the underlying bank debt was non existent. So until more detail is published in the half yearly annual report, this is as far as my analysis can go.

TNR has transformed remarkably since HY2015 (30-10-2014) balance date. So the following figures from HY2015 are rather historical.

Finance Segment Assets: $94,909m
Finance Segment Liabilities: $72,763m

Nevertheless it is comforting to know that the finance sector assets were on the books at a 30% premium to the finance sector liabilities at the time.

SNOOPY

[percy]

Gotta love that bit at the end of the announcement Time for you to get back in Percy?

TNR
10/09/2015 13:51
ASSET
NOT PRICE SENSITIVE
REL: 1351 HRS Turners Limited

ASSET: TNR: Turners buys property for truck and machinery growth

10 September 2015

Company Announcement

TURNERS BUYS FURTHER PROPERTY FOR TRUCK AND MACHINERY GROWTH

Turners Limited (NZX : TNR) today announced its subsidiary Turners Group NZ
(formerly Turners Auctions) has purchased a property in Hillsborough,
Christchurch for $2.5 million to accommodate its growing truck and machinery
business.

The move reflects the strategy of separating trucks and machinery premises
from the traditional car business.

In the last 12 months, two new premises, a $4 million property purchased in
Roscommon Road, Auckland and a leased site in Christchurch have been
developed as part of the focus on trucks and machinery. However, with sales
tracking at over 40% up on the same period last year, both sites are already
constantly full.

Turners Limited CEO and Executive Director, Paul Byrnes commented:
"The significantly higher used trucks and heavy machinery sales activity has
more than justified the property investments; but the whole Turners Group
NZ business is performing particularly well with profit for this financial
year up over 30% on the corresponding pre-acquisition period".

Turners Limited Annual Meeting will be held at the Aotea Centre, Auckland on
Wednesday, 16 September 2015 at 11.00 am.

ENDS

For further information please contact:

Paul Byrnes
CEO/Deputy Chairman
Turners Limited
DDI: (09) 308 4988
Mobile: 021 644 441

Grant Baker
Chairman
Turners Limited
Mobile: 021 729 800
End CA:00269934 For:TNR Type:ASSET Time:2015-09-10 13:51:18

On the face of it "profit up over 30% on the corresponding pre-acquisition period" reads well.
But didn't we expect that.?