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  1. #3976
    Legend minimoke's Avatar
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    Quote Originally Posted by percy View Post
    Well with the holiday season proving to be yet another season of share madness and carnage on our roads,I expect Turners will be flat out managing the logistics and sales of vehicles written off by insurance companies.
    Another profitable "ticket" Turners clip.
    And hopefully providing an option for replacement cars.

  2. #3977
    percy
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    Quote Originally Posted by minimoke View Post
    And hopefully providing an option for replacement cars.
    You're onto it.!!!.{a lot of people miss this}
    Then option for finance,
    option for autosure insurance,
    option for service.
    And at each option Turners manage to clip the "ticket".
    "Big ticket" clippers...Turners never miss a "ticket" to clip....lol.
    Last edited by percy; 14-01-2019 at 11:50 AM.

  3. #3978
    An Awesome Cool Cat winner69's Avatar
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    Quote Originally Posted by percy View Post
    You're onto it.!!!.{a lot of people miss this}
    Then option for finance,
    option for autosure insurance,
    option for service.
    And at each option Turners manage to clip the "ticket".
    "Big ticket" clippers...Turners never miss a "ticket" to clip....lol.
    Good this ticket clipping stuff eh

    But the latest announcement suggests they are clipping fewer tickets than previously
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  4. #3979
    percy
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    Quote Originally Posted by winner69 View Post
    Good this ticket clipping stuff eh

    But the latest announcement suggests they are clipping fewer tickets than previously
    Maybe,maybe not.
    Second hand car sales will most probably be lower in the Auckland area,which will affect Turners sales,and the chance to add on all their options,however with an additional 120 originators added in the first half alone,finance,insurance and service revenue may not be affected,[could possibly increase?]while end of life logistics and sales looks as though their revenue will increase.
    Therefore to make an informed judgement we should wait for a further update from TRA.
    Last edited by percy; 15-01-2019 at 08:53 AM.

  5. #3980
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    Default Did accounting standards kneecap the HY2019 result?

    Quote Originally Posted by Snoopy View Post
    I see in the HY2019 accounts that 'Impairment provision expense' was (3,951) up from (2,276) in the previous year. However to check out the actual 'impairment expense' for the period we have to look at the what has happened to the total provision over HY2019 . And that part of the accounts has not yet been released.

    There is also something on the change of treatment of impairments in HY2019 result notes, referring to NZIFRS 9 and 15. An extra (2.160m) impairment charge seems to have arisen from that. But is this just in relation to debt collection services? Or does in apply to all loan contracts? Anyone care to offer an opinion?
    Quote Originally Posted by winner69 View Post
    Snoops ....that 2.160m you mention is part of the 1.839m adjustment to March 18 Retained Earnings (see the Changes in Equity part of the accounts)

    Effectively reduced Shareholder Equity with no impact on the Income Statement (ie profit) this financial year

    The new standards do mean they need at what’s provided for differently than in the past - probably more detail in the full half year report and then you can work out if there is a real impact or not.
    My copy of the HY2019 report has finally arrived and I am pleased to see that it was bound properly this time. The 'cheap staple in the corner' used to hold the FY2018 report together ended up being 'not so cheap' for shareholders who took the route of getting the report professionally rebound within leather covers!

    From p33 in relation to IFRS15 'Revenue from Contracts with Customers'. The core principle behind this reform is to "recognise revenue to depict the transfer of goods and services to customers in amounts that reflect the consideration (payment) to which the entity expects it to be entitled in exchange for those goods and services." The effect of this is to split what was a one off transaction into separate 'performance obligations' and only tick off the contact revenue when those obligations are met. Prior to this, the previous policy was to recognise revenue when "it is probable that economic benefits will flow to the group." After reading this, I am none the wiser as to what this change means in terms of booking day to day profits on sales.

    Could the difference in a finance contract be a simple as waiting until the money is in the 'Oxford Finance' bank rather than just relying on a customer having signed a contract? Looking at the actual numbers on p34, the ' balance sheet effect' of the changes mean an historic reduction of just $284,000 in net assets. The main changes making up this number come under the headers "Change in collection income" and "Change in collection expense." Does this mean that the changes in IFRS15 only apply to the 'EC Credit' division of Turners? If the answer to this question is 'yes' and EC Credit revenue was $18.667m over FY2018 and 'operating profit' was $6.069m then for FY2018:

    $0.284m/$6.069m = 5% of operating profits for this one division: Nothing of great consequence for the whole group.

    I see:

    "The group elected to apply the cumulative effect method with no restatement of comparative period amounts."

    This does make it difficult for shareholders seeking transparency. Do the adjustments relate to just the prior period or is there a cascading effect across many past years? If the latter, then the IFRS15 adjustments are even less significant than I think!

    Now moving on to IFRS9, on Impairment of Financial Instruments. The significant changes here relate to impairment of the 'finance receivables' loan book. Interestingly the change is in the opposite direction to IFRS15. The new requirement is to make a forecast on impairments that might happen on the balance of probability at the time a basket of loans is taken out (based on historical default rates), rather than waiting for a loan to actually become impaired before declaring it impaired. The impairment adjustment is taken off the balance sheet assets from the end of the previous full year accounting period. This is a real loss which must be taken to comply with accounting standards. But it is a loss that has never been part of any Turners profit and loss statement. Once again transparency is limited, because Turners have chosen not to restate comparative period amounts.

    The extra loss incurred (change in impairment provision) at EOFY2018 was $2.160m, offset by the associated deferred tax gain of $0.605m ( $2.160m x 0.28 = $0.605m ). This gives a net loss of $1.555m.
    How significant is an extra impairment provision of $2.160m? At EOFY2018 the total loan impairment provision, before adjustment, was $11.294m.

    $2.160m / $11.294 = 19%

    A 19% increase in provisioning is very significant. This extra provisioning is not in relation to any particular time period of loans. So IMO this extra provisioning increment must apply not only to the balance, but also the annual loan impairment expense. In the case of FY2018 the 'impairment provision expense' was $6.380m. The adjusted figure becomes $7.592m. And that change ($7.592m-$6.380m = $1.212m) would have made a significant difference to NPAT over the FY2018 financial year. And there would be a similarly significant effect, this time accounted for, in FY2019 half year result.

    So to answer the question I posed:

    "Did accounting standards kneecap the HY2019 result?"

    For NZIFRS 15 the answer is 'no'. But for NZIFRS 9 the answer is 'yes'.

    SNOOPY
    Last edited by Snoopy; 17-01-2019 at 06:01 PM.
    To be free or not to be free. That is the cash-flow question....

  6. #3981
    ShareTrader Legend Beagle's Avatar
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    You have the other Beagle to thank for that because I barked about the poor binding at the annual meeting. I can't be bothered opining on the change in accounting standard...on holiday and holidays and thinking about accounting standards don't mix as far as I am concerned. If other bean counters enjoy thinking about the effect of accounting standard changes during their holidays then I recommend they seek professional psychological help, urgently lol.

    I can't help noticing however the very soft overall tone to retail sales stat's, (its been all over the media this summer) and second hand vehicle stat's and I remain of the view that people are likely to be disappointed with retail and consumer durables stocks in 2019. I am sure the resident company spokesman still holds the opposite view and that's fine.
    Last edited by Beagle; 17-01-2019 at 09:28 AM.
    No butts, hold no mutts, (unless they're the furry variety).

  7. #3982
    percy
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    Quote Originally Posted by Beagle View Post
    You have the other Beagle to thank for that because I barked about the poor binding at the annual meeting. I can't be bothered opining on the change in accounting standard...on holiday and holidays and thinking about accounting standards don't mix as far as I am concerned. If other bean counters enjoy thinking about the effect of accounting standard changes during their holidays then I recommend they seek professional psychological help, urgently lol.

    I can't help noticing however the very soft overall tone to retail sales stat's, (its been all over the media this summer) and second hand vehicle stat's and I remain of the view that people are likely to be disappointed with retail and consumer durables stocks in 2019. I am sure the resident company spokesman still holds the opposite view and that's fine.
    Refer to my post # 3980.

  8. #3983
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    Default An underlying eps comaprison: FY2018 vs FY2019F

    Quote Originally Posted by Snoopy View Post
    So to answer the question I posed:

    "Did accounting standards kneecap the HY2019 result?"

    For NZIFRS 15 the answer is 'no'. But for NZIFRS 9 the answer is 'yes'.
    Profit FY2018 Profit HY2019 Annualized Profit FY2019 Reference
    As declared $23.360m $12.885m
    less Retrospective impairment provision adjustment 0.72 x ($1.212)m My post 3980, this thread
    less Property sale gain Wiri ($3.400)m HYR2019 p22
    less earn Out payment for Autosure to P&L ($0.800)m HYR2019 p22
    less Revaluation Investment Property gain ($0.820)m AR2018 p51
    less Gain on Sale of Property, Plant and Equipment ($1.000)m AR2018 p51
    less EC Credit unredeemed voucher release to P&L 0.72 x ($0.700)m AR2018 p13, HYR2019 p22
    less MTF Shareholding revaluation ($0.612)m AR2018 p67
    less reduction in 'Buy Right Cars' earn out provision to P&L ($2.600)m HYR2019 p49
    less Life Insurance Contract Adjustments ($2.664)m AR2018 p51 and p76
    equals $14.287m $8.685m $17.370m
    Shares on Issue FY2018 Shares on issue HY2019
    84,802,812 89,480,000
    Normalised Annualised Business eps 16.9c (FY2018) 19.4c (FY2019f)

    At the current share price of $2.40, I have TRA on a forecast normalized PE ratio of 12.4 for FY2019. Underlying eps growth for the year should be 15%.

    SNOOPY
    Last edited by Snoopy; 20-08-2019 at 11:25 AM. Reason: added references
    To be free or not to be free. That is the cash-flow question....

  9. #3984
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    Snoops ...when you say kneecap I presume you mean something made the H119 result worse than what was reported ....yes?

    Try hard enough and I trckon you’ll end up showing an outstanding H119 result (v pcp) ....but won’t it all be smoke and mirrors?

    Posted when Post 3984 was incomplete.
    Last edited by winner69; 17-01-2019 at 06:03 PM.
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  10. #3985
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    Hey Snoopy. Average broker forecast for FY19 is here https://www.marketscreener.com/TURNE...14/financials/ eps of just 26.7 cps. Some guy called Ben Graham reckons the right PE for a no growth company is 8.5...not sure how he values companies with declining eps, are you ?
    Last edited by Beagle; 17-01-2019 at 06:08 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  11. #3986
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    Quote Originally Posted by winner69 View Post
    Snoops ...when you say kneecap I presume you mean something made the H119 result worse than what was reported ....yes?
    What I meant was that because the impairment provisioning is now higher, thanks to IFRS15, then the declared profit for HY2019 is lower than it otherwise would have been under the old rules. It that sense the HY2019 result is worse than the punters might have expected 'all things being equal'. However, because we are now in the IFRS15 era, the declared result for FY2019 will be 'correct' according to the new impairment rules definition. To make a fair comparison, we have to look at what would have happened had IFRS15 been in place over FY2018.

    Try hard enough and I trckon you’ll end up showing an outstanding H119 result (v pcp) ....but won’t it all be smoke and mirrors?
    1/ Yes
    2/ All those adjustments are meant to take away the 'smoke and mirrors'.

    Posted when Post 3984 was incomplete.
    Nah. You were just too quick out of the blocks to answer it Winner. Too much 'on the ball' for your own good!

    SNOOPY
    Last edited by Snoopy; 18-08-2019 at 09:36 PM.
    To be free or not to be free. That is the cash-flow question....

  12. #3987
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    Quote Originally Posted by Beagle View Post
    Hey Snoopy. Average broker forecast for FY19 is here https://www.marketscreener.com/TURNE...14/financials/ eps of just 26.7 cps.
    My forecast is lower than that!

    Some guy called Ben Graham reckons the right PE for a no growth company is 8.5...not sure how he values companies with declining eps, are you ?
    But I reckon underlying earnings are going to grow by 15%. That mean my estimated forecast PE of 12.4 is probably justified.

    SNOOPY
    Last edited by Snoopy; 18-01-2019 at 05:40 PM.
    To be free or not to be free. That is the cash-flow question....

  13. #3988
    percy
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    Oh dear me what will I do with the increasing fully imputated divies paid quarterly.? 4 cents per share in a couple of weeks will cover the Xmas Visa bill nicely.
    2019...... 17cents per share............7.08% net yield...Golly is that 9.4% gross yield?
    2020.......17.5 cents per share.........7.29% net yield
    2021.......18.5 cents per share.........7.71% net yield.
    With those sort of yields I could be tempted to buy more TRA shares?!
    I note NZ's leading broker expects the divies as follows
    2019,.......17cps
    2020.........18 cps...........................gross yield 10%
    2021..........19cps............................gro ss yield 10.5%.Nice .
    Last edited by percy; 17-01-2019 at 07:10 PM.

  14. #3989
    Membaa
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    Is "imputated" something like amputated, like where the company amputates the tax and pays a gross dividend. If the dividend is fully imputed, is the yield the same as full imputated or amputated?

  15. #3990
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    Quote Originally Posted by Snoopy View Post
    My forecast is lower than that!
    But I reckon underlying earnings are going to grow by 20%. That mean my estimated forecast PE of 11.3 is probably justified.
    Brokers average eps forecast for FY21 is still lower than for FY18. What growth have you manufactured through your convoluted process and are you now in cahoots with Percy lol I stick with a PE of something less than 8.5 due to declining average eps expected over the next 3 years. 8 seems reasonable to me and on 25 cents that makes for an even $2 as fair value.

    Quote Originally Posted by percy View Post
    Oh dear me what will I do with the increasing fully imputated divies paid quarterly.? .
    Imputed Percy....Oh I don't know, its such a dilemma but let me help you out... you could try offsetting the next 8-9 years of dividends against the whopping $1.50 in capital loss the shares have suffered in the last year or so lol. When is a dividend not a dividend ? When its paid by raising debt and massively overtaken by capital losses !
    Last edited by Beagle; 17-01-2019 at 08:23 PM.
    No butts, hold no mutts, (unless they're the furry variety).

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