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

[thereslifeafter87]

Aha

Selling off the MV loan book valued at $147m. Probably at a significant discount to book maybe 10-30% ... Look forward to seeing their response to the NZX request.

If they're making 7.3% GM [their avearage overall lending margin, MV margins are likely to be higher] on the MV loans it will hit their GM by around $10.7m. Of course this may not be as bad as the write down they take on selling the book.

Selling a few reverse mortgages will not replace this income overnight.

$32m of Equity investments current valuation may be a little lower.

Capital adequacy must be pretty tight.

This would probably explain the recent decline in the SP.

Good luck to holders....

Where does it say they are selling the MV loan book?

DPC said it is exiting the sector. It may just allow the loans to run-off over their lifetime. The company wouldn't be able to achieve $6m NPAT if it had big write-downs from a sale of the MV loans at less than book value.

See PFG's announcement this morning - this could put more downward pressure on DPC.

[POSSUM THE CAT]

p2r I am no lawyer or accountant so if you have the knowledge to unravel the mess of interlinked companies and funds I would appreciate it. Such as which owns what and who do they owe money to. Why all this smoke & mirror approach is needed please explain.

[hairdresser]

From Stuff

http://www.stuff.co.nz/4175700a13.html

"..The company is also pulling out of financing for the Auckland used car market and is already in discussion with a number of parties on a restructuring or sale of this part of the business."

[thereslifeafter87]

p2r I am no lawyer or accountant so if you have the knowledge to unravel the mess of interlinked companies and funds I would appreciate it. Such as which owns what and who do they owe money to. Why all this smoke & mirror approach is needed please explain.

Just read the notes to the annual report. It outlines it.

[thereslifeafter87]

From Stuff

http://www.stuff.co.nz/4175700a13.html

"..The company is also pulling out of financing for the Auckland used car market and is already in discussion with a number of parties on a restructuring or sale of this part of the business."

Ah, ok.

It will be interesting to see the result of this.

[whatsup]

I see that viking is down 25% on thin trade todat any prizes for guessing as to why?

[hairdresser]

VIK dumped 25% of their holding in DPC on Thursday at 1.12.

You would expect Mr King to have a pretty good handle on the DPC business.

[Nitaa]

VIK dumped 25% of their holding in DPC on Thursday at 1.12.

You would expect Mr King to have a pretty good handle on the DPC business.

I havent had a read of the year end report. One thing that does surprise me is the $6m profit. Given the turmoil with finance companies of late this result seems unusually high. this gives the company a great earnings per share but somewhere in the murky waters is the true picture imo.

an accoutant might be able to help me on this one.. im thinking on these lines especially with a lot of default payments especially in the MV finance sector. an account receivable is money owed and on face vaule may look good on the books...is this a true reflection on the company's position? especially if many of these loans have been written off as a bad debt so to speak. im not sure if i have explained it well enough but it does seem like an unexpected higher profit given the months long problem in the mv sector and other underpeforming areas.

it reminds me a couple of the lines commonly used by prostitutes and accountants. a guy ask a prostitite what her name is and her reply is ..what do you want it to be? a md ask his accountant what the profit for the financial year and his/her reply is...how much do you want it to be?

[hairdresser]

I don't see anyway they can make an operating profit for the next 12 months. They should be able to maintain solvency but there business model relies of writing new loans, not just collecting on the old ones. This applies to all finance companies.

IMO they will be looking to book a profit on sale of assets, its hard to see them returning an operating profit with the loss of $10m in interest margin on the sale of their MV business. If anyone has any ideas of where they can replace this income from without chasing risky loans there are be a lot of directors from many finance companies waiting to hear from you.

IMO this share is highly speculative even at the current SP.

[Hoop]

Nita
$6M profit sounds reasonable, (MV business not sold yet and it's 1/2 way thru the 2008 financial year) Last year it was $8m less $5M writedowns.

More interesting is BK and Viking...they don't hold a blocking stake in DPC anymore. Current % held : 8.0152793
Last % held : 10.6313

Methinks it was a reluctant sale...needed cash for BIO ????