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

[McGinty]

Share price 31 January 2013 $3.40
Share price 31 January 2017 $3.85

Current share price after all these years $2.89.
What has the market been trying to tell us for all these years that flies in the face of their national road show presentation ?
Hmmmmmmm ????
Its just not happening, (wealth creation) for shareholders is it ? Why not ?

IMHO the reason for lack of wealth creation is the continued dilution of shares, of which there are two consequences for us retail shareholders.

The first is straight forward,

In July 2016 after the Buy Right Cars acquisition there were 64m shares on issue, since then

Sep 2016 - Convertible Bonds issue and Share Placement of 10.479m shares @ $2.945
Sep 2017 - Share Placement and Share Purchase Plan of 9.934m shares @ $3.02
Sep 2018 - Convertible Bond issue of (est) 4.526m shares @ $2.85 (down round?)

Total of 24.939m additional shares or 39% increase on July 2016 (26 months)


The second consequence is that the big money has the power to push the share price to suit their desired outcome.

In 2017 the price was consistently sold down the 2 months before the $25m placement was announced (2 months after the Hugh Green sell down), the result of this was a discounted capital raising 16% below where the price was early July. Then adding insult to injury the SPP was poorly conducted and a lot of retail investors didn't get a fair chunk of the offer.

The same thing is currently happening with the price now being pushed back 9.5% from early July for what I can only assume is for the current bond holders to get a more favorable conversion price.

It's been a long hard road being a TRA retail shareholder and I only recently decided to get over the 2017 SPP incident and join the register again. I personally think that management are doing a great job running the business side of things, but the board could have done better with the company. IMO The board doesn't seem to understand how the equity market works, which has helped contribute to the lackluster 3% p.a shareholder returns over the last 2 years.

I will not be voting in favour of rewarding the governors of our company for achieving lackluster returns!

[BlackPeter]

IMHO the reason for lack of wealth creation is the continued dilution of shares, of which there are two consequences for us retail shareholders.

The first is straight forward,

In July 2016 after the Buy Right Cars acquisition there were 64m shares on issue, since then

Sep 2016 - Convertible Bonds issue and Share Placement of 10.479m shares @ $2.945
Sep 2017 - Share Placement and Share Purchase Plan of 9.934m shares @ $3.02
Sep 2018 - Convertible Bond issue of (est) 4.526 shares @ $2.85 (down round?)

Total of 24.939m additional shares or 39% increase on July 2016 (26 months)


The second consequence is that the big money has the power to push the share price to suit their desired outcome.

In 2017 the price was consistently sold down the 2 months before the before the $25m placement was announced (2 months after the Hugh Green sell down), the result of this was a discounted capital raising 16% below where the price was early July. Then adding insult to injury the SPP was poorly conducted and a lot of retail investors didn't get a fair chunk of the offer.

The same thing is currently happening with the price now being pushed back 9.5% from early July for what I can only assume is for the current bond holders to get a more favorable conversion price.

It's been a long hard road being a TRA retail shareholder and I only recently decided to get over the 2017 SPP incident and join the register again. I personally think that management are doing a great job running the business side of things, but the board could have done better with the company. IMO The board doesn't seem to understand how the equity market works, which has helped contribute to the lackluster 3% p.a shareholder returns over the last 2 years.

I will not be voting in favour of rewarding the governors of our company for achieving lackluster returns!

good post - and I fully agree. competent management but a board which does not seem to be able (or willing) to represent share holder interests.

They clearly don't deserve a rise of director fees - and they should be embarrassed about making this proposal given the poor board performance. It is a disgrace and I voted against this proposal.

It might be as well time to look a bit closer into the composition of the TRA board and the history of individual directors. Some of them have a quite appalling track record of achieving good outcomes for share holders. Sure - maybe not in all cases the fault of the individual, but I still prefer to populate the board with directors who consistently achieve great outcomes for shareholders.

[percy]

good post - and I fully agree. competent management but a board which does not seem to be able (or willing) to represent share holder interests.

They clearly don't deserve a rise of director fees - and they should be embarrassed about making this proposal given the poor board performance. It is a disgrace and I voted against this proposal.

It might be as well time to look a bit closer into the composition of the TRA board and the history of individual directors. Some of them have a quite appalling track record of achieving good outcomes for share holders. Sure - maybe not in all cases the fault of the individual, but I still prefer to populate the board with directors who consistently achieve great outcomes for shareholders.

Yes agree with you and McGinty,however I think the board were badly advised about the Australian placement and listing.
I think there is more than meets the eye here,but I doubt we will ever hear the real reasons.
With the board being major shareholders they gave themselves an "own goal."
With the business bulked up,it is now time to perform.
Then when they have earnt it ,they may be in a better position to seek an increase in pay.
Would be the decent thing to do is to withdraw the resolution before the meeting,just to show empathy with fellow shareholders.

[couta1]

Plenty of shares being offered up under $2.90 on the sell side, someone with a good number of shares has been offloading for quite some time now.

[percy]

Plenty of shares being offered up under $2.90 on the sell side, someone with a good number of shares has been offloading for quite some time now.

Agree...………………
But no shareholder notices.?

[BlackPeter]

Some big bondholders playing games to get a really low conversion price? Maybe we need to wait until next month to see the SP recover?

I think the bond conversion rules belong probably as well on the long list of events where the board didn't act in the interest of existing shareholders ...

Just bad luck - or is it incompetence?

[Beagle]

Yes agree with you and McGinty,however I think the board were badly advised about the Australian placement and listing.
I think there is more than meets the eye here,but I doubt we will ever hear the real reasons.
With the board being major shareholders they gave themselves an "own goal."
With the business bulked up,it is now time to perform.
Then when they have earnt it ,they may be in a better position to seek an increase in pay.
Would be the decent thing to do is to withdraw the resolution before the meeting,just to show empathy with fellow shareholders.

I think there is near unanimous agreement on here that's the right thing to do but I think its almost certain they're not interested in small shareholders views on this. They have their so called independent report to "validate" the increase.

Valuable lessons here about ignoring TA for some people. Those with plenty of shares better fasten their seatbelts tightly...looks highly likely we're headed down to test the previous low of $2.80. Very pleased I sold 75% of my shareholding and disappointed I didn't listen to my gut and simply ask for my money back on the pending bond conversion.

BP - big volumes in the early part of the 90 bond conversion pricing process mean bondholders are now looking likely to be out of the money v current SP of circa $2.85.

[McGinty]

Some big bondholders playing games to get a really low conversion price? Maybe we need to wait until next month to see the SP recover?

I think the bond conversion rules belong probably as well on the long list of events where the board didn't act in the interest of existing shareholders ...

Just bad luck - or is it incompetence?

Absolutely agree, October will be the month the SP should recover. Unfortunately there will be now additional resistance into any positive SP movement as there are now more holders that are underwater (anyone who's purchased during the last 2 months).

I would enjoy hearing the boards own list of accomplishments on how they have increased shareholders value (would be a much simpler list than one BP suggested)

Page 16 of the Annual report under the board's picture, first line....."The board is focused on creating shareholder value..."

Maybe the board needs to be informed that Actions speak louder than words, and from the boards actions maybe they should amend this to The board's focus is to receive market level compensation* relative to our peers before adding shareholder value.

* As measured by an independent firm who we commissioned to tell us what we want

[JayRiggs]

I have voted against the increase in director fees and sent my forms away.

[minimoke]

Page 16 of the Annual report under the board's picture, first line....."The board is focused on creating shareholder value..."

Maybe the board needs to be informed that Actions speak louder than words, and from the boards actions maybe they should amend this to The board's focus is to receive market level compensation* relative to our peers before adding shareholder value.

* As measured by an independent firm who we commissioned to tell us what we want

When asking themsleves if they are worth market remuneration the Directors might want to spend a moment reflecting on the attached picture