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

[Beagle]

If TRA sell off the silver, is not the proceeds trapped within the remaining company, hence what happens to those proceeds given the assets are gone and no future earnings from them will accrue to the company. Surely they will have to distribute the proceeds to shareholders, there's only so much scope to grow the remaining assets? Who stands to make a gain from that, oh of course the cornerstone shareholders.

Anyway, I'm disappointed that the silverware is being sold off. I think Winner might be onto it, this is the next fling at an exit strategy, not the continuation of a growth strategy. The business model looked sound until these results, but now it doesn't and it has unanswered questions hanging over it.

Thank goodness I didn't buy the down trend, and now it's gone from my watchlist as well. What a dog it's been, a capital destruction machine and now a strategy to get smaller rather than better.

Yes a very ugly pig dog. Thankfully with careful risk management I have escaped with a very small 3 figure overall loss but the loss of time is far more valuable. Don't care about management's expansion plans as I know the second hand car industry is ultra competitive and probably always will be so the chances of outperformance on capital employed is very, very slim in my opinion. Some will hold for the dividend but should probably ask themselves how that's worked out for them so far ?

Last year the directors who could be bothered turning up told the meeting that the substantial increase in directors fees was because of the complexity of the business including the insurance division. So a slimmed down business model in due course means lower directors fees right ? Yeah right !

[percy]

They say Finance and collections services worth a bit over $150m... (before corporate costs are accounted for), still quite a bit given market cap of turners only $211m
TRA continues to trade below NTA ($2.58), below an analysts target price ($2.59), and way below where management reckon its worth ($3 'worst case')
Has to go up eventually one would think?

Your valuations are "Ball park" with broker's rearch I have read.
I would expect any buyer of Oxford Finance would request TRA sell their MTF shareholding.TRA are MTF largest shareholder.So the proceeds from the sale of these shares would go on top of the $150 mil you quote.
So the nett proceeds, recycled into expanding the retained silverware should make for interesting times.
Those of us who have followed the market for a long time, know companies that have sold parts of their business that are no longer core,and have recycled the funds into their core business, have done very well.Business more focussed.A recent example has been Scales, selling their low margin coolstores,and recycling those funds into higher margin petfood.
The core parts of Turners are still centred around the extremely valuable trusted brand "Turners."

[BlackPeter]

Your valuations are "Ball park" with broker's rearch I have read.
I would expect any buyer of Oxford Finance would request TRA sell their MTF shareholding.TRA are MTF largest shareholder.So the proceeds from the sale of these shares would go on top of the $150 mil you quote.
So the nett proceeds, recycled into expanding the retained silverware should make for interesting times.
Those of us who have followed the market for a long time, know companies that have sold parts of their business that are no longer core,and have recycled the funds into their core business, have done very well.Business more focussed.A recent example has been Scales, selling their low margin coolstores,and recycling those funds into higher margin petfood.
The core parts of Turners are still centred around the extremely valuable trusted brand "Turners."

Mmh - so first it was this one stop strategy which made them so attractive. They even increased their board fees for having to do all this hard work. They succeeded to increase their feed, but failed to do the work.

Strategy dropped by the board like a hot potato ... too hard, apparently - or just too busy to consume their increased fees, can't do the additional work as well?

But hey - now it is the simplicity of their business proposition which makes them so attractive. Why didn't we see that from the very beginning - complexity is bad .. only a simple used car yard is what makes the money. Unloved old car in - preloved new car out - only one ticket to clip. Rinse and repeat. Easy. What a bunch of geniuses!

But - are we sure the emperor is wearing any clothes?

[winner69]

Hey percy, you must be a bit gutted that the Turners integrated automotive financial services model with all its ticket clipping attributes is deemed to be broken. I recall you often told the doubters ‘ask yourself my Dorchester acquired Turners’

However I admire your ongoing support for and belief in Turners. No doubt you will often remind us that ‘the capital released from the (dud) businesses can be recycled and produce better earnings developing and running more, and better locations for Turners’ strategic approach is a wonderful shift in thinking.

I have my doubts. But all I can say I feel a little vindicated in that the numerous times I’ve said Turners weren’t generating enough profit to cover their cost of capital has turned out to be the case.

We’ll have to see what the future brings eh

[winner69]

They say Finance and collections services worth a bit over $150m... (before corporate costs are accounted for), still quite a bit given market cap of turners only $211m
TRA continues to trade below NTA ($2.58), below an analysts target price ($2.59), and way below where management reckon its worth ($3 'worst case')
Has to go up eventually one would think?

Trading below book value happens when you don’t cover your cost of capital ...ongoing value destruction

[couta1]

Trading below book value happens when you don’t cover your cost of capital ...ongoing value destruction

Taking off dividends received this company still owes me about 55k. Lol

[Beagle]

Taking off dividends received this company still owes me about 55k. Lol

Reading PPP (Percy's Persistent Positivity) can cost you plenty if you believe it ! Take it as a cheap, (opps, sorry expensive), lesson that one ignores TA at one's peril.

[winner69]

Taking off dividends received this company still owes me about 55k. Lol

Think like the Finance Manager when doing Budgets ....Turners will give me 80 cents of dividends(over the next four years)

Happier now

[winner69]

I note they increased finance impairments by $3m as result of accounting changes and just adjusted the F18 retained earnings number ...... so no impact on this year’s profit

[percy]

Taking off dividends received this company still owes me about 55k. Lol

Going from research I am currently reading the projected increasing dividends will soon recover your losses.
2019a 17cents ....2020e 18cps....2021e.19cps....2022....20.1cps......Fully imputed paid quarterly,next one 18th July.