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

[whatsup]

So who will but Oxford Finance, Geneva ?

[percy]

So who will but Oxford Finance, Geneva ?

Maybe HGH would buy Oxford Finance,,and then Turners' MTF shares, before making a full takeover for them [MTF] too.!
We must remember TRA buying their blocking stake in MTF,stopped any takeover of MTF a few years ago.
MTF would still make a good fit with HGH's Marac.

[winner69]

http://www.stuff.co.nz/business/indu...Oxford-Finance.

We know what they bought it for, but do we know what they will sell it for??

Heaps more I hope because today it is an amalgamation of several businesses -

On 1 May 2018, Dorchester Oxford Limited, Oxford Finance Limited, Southern Finance Limited and Dorchester Finance Limited were amalgamated to become Dorchester Finance Limited which changes its name on amalgamation to Oxford Finance Limited.

[Beagle]

The amount of shares owned by board members, is the best way to judge any board members' commitment, in my very long experience of the sharemarket.
The board of Turners have a great deal of skin in the game.

It strikes me as really odd that for as far back as I can remember management and the directors have been singing the praises of an integrated sales / finance / insurance and more lately service model. What we appear to have here is an admission this doesn't work and / or is too capital intensive and Baker et al want some of their capital back in a trade sale of the finance and insurance divisions. Basically this is capitulation on a plan they've been working on for years and they want to get back to absolute basics.

HGH might finally get the acquisition they've been talking about for all these years.

[trader_jackson]

It strikes me as really odd that for as far back as I can remember management and the directors have been singing the praises of an integrated sales / finance / insurance and more lately service model. What we appear to have here is an admission this doesn't work and / or is too capital intensive and Baker et al want some of their capital back in a trade sale of the finance and insurance divisions. Basically this is capitulation on a plan they've been working on for years and they want to get back to absolute basics.

HGH might finally get the acquisition they've been talking about for all these years.

Well the annoucement was both good and interesting (not bad... interesting)

I agree, for a good chunk of time the 'one stop shop' model was touted quite extensively, and they seemed to have followed our government of the past 18 months and have done a very sharp u-turn on what was once pushed for so hard - this is the interesting part of this mornings announcement. I personally never thought EC Credit fit that well, so this was less of a surprise.

The good part was the (now?) core business (cars and car insurance) performed well in FY18... having a quick look at the top and bottom line it seems this core business is solid...
AUTOMOTIVE RETAIL
FY17: Revenue $192.7m, Operating Profit $15.4m
FY18: Revenue $223.2m, Operating Profit $16.6m
FY19: Revenue $225.7m, Operating Profit $18.3m

INSURANCE
FY17: Revenue $13.7m, Operating Profit $0.9m
FY18: Revenue $46.9m, Operating Profit $5.7m
FY19: Revenue $48.5m, Operating Profit $8.2m

Say in FY20 we have a 'bad' year, and there is no operating profit growth in either division - even ignoring the other divisions (Finance and EC Credit) Turners is at a PE of 8.0 (before tax)

No guidance provided which was to be expected when a couple of arms of the business are under review (and may, or may not, be part of the future turners)

And the presentation didn't seem to have quite as much good vibe and lots of pretty pictures that FY18 of FY17 had...
Is that a sign of the times? I don't know

[Beagle]

$18.3m divisional profit before tax = $13.2m after tax = approx. 15 cps earnings. Not sure where you get a PE of 8.
From where I sit the vehicle division is worth something like $1.50 per share (PE 10 which is line ball with CMO) so I guess its a question of whether the finance and insurance deivisions are worth more than $1 per share.

Overdue debt in the credit division is up from 1.6% to 2.0% of lending which is getting right up there and the non recourse lending overdue has blown out to a whopping 14.4%, that's an absolute shocker...last time I looked at the interim report it was under (9% from memory).

I suspect when the risk ruler is run over TRA's loan book in a truly independent arms length way in tandem with thorough due diligence, (remember the auditors do minimal sampling and are not truly independent because the company pays their fees and provisioning of doubtful loans involves a vast amount of estimation by the company itself), TRA may find indicative bids for their finance division are well short of their expectations.

[percy]

Oxford Finance is a substantial business the worth of which is as yet untested.
EC Credit is a reasonable business the worth of which will be interesting.
Turners' MTF blocking stake shares are worth substantially more than they paid for them.Seem to remember TRA are MTF's largest shareholder.
The directors ,however feel that the capital from the above businesses can be recycled and produce better earnings developing and running more, and better located Turners sites.
Perhaps they will be proved right,which should make Turners a very interesting and rewarding investment for all shareholders,and not just for the directors, who have large shareholdings.
5 cps fully imputed divie payable 18th July.

[winner69]

T_j — those sums you did above re you need to deduct Corporate Costs

These were $14.9m in F19. I would say a lot would remain so even without Finance and Collections they would be quite high ......and then I would hazard a guess that implementing a lot of the stuff they talk about is quite expensive and would offset any ‘savings’

So let’s say Cars and Insurance Operating Profit $26.5 as per your post ...let’s take off say $10m corporate costs (and that contradicts what I said above) which gives $16m before tax and after tax and at best $12m after tax ....or 14 cents a share.

All conjecture eh and goodness knows what’ll happen but I have a feeling it won’t be that good for shareholders.

Might be a brilliant strategic move and we’ll all be rich as ...one day

[couta1]

T_j — those sums you did above re you need to deduct Corporate Costs

These were $14.9m in F19. I would say a lot would remain so even without Finance and Collections they would be quite high ......and then I would hazard a guess that implementing a lot of the stuff they talk about is quite expensive and would offset any ‘savings’

So let’s say Cars and Insurance Operating Profit $26.5 as per your post ...let’s take off say $10m corporate costs (and that contradicts what I said above) which gives $16m before tax and after tax and at best $12m after tax ....or 14 cents a share.

All conjecture eh and goodness knows what’ll happen but I have a feeling it won’t be that good for shareholders.

Might be a brilliant strategic move and we’ll all be rich as ...one day

Could be the good oil or a bad moon rising take your pick.

[Beagle]

Could be the good oil or a bad moon rising take your pick.

https://www.bing.com/images/search?v...0&vt=0&eim=1,6