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

[steveb]

But the big question has to be whether the dividends will be maintained over the next 4 years.They are still loaded up with considerable debt,and what happens when a company decides to reduce debt?Just bear in mind that projected divvies might not be maintained.

[winner69]

Making acceptable returns on capital seems to be driver of hinting at quitting finance and insurance and retaining insurance and auto.

Looking at the segment numbers in the full year announcement Insurance was the worse performing segment by a long way. Based on operating profit as % net segment assets (sort of a return on capital) Insurance achieved 13% compared to Insurance at 21% and Credit at 23%.

And wasn’t F19 a boomer year for Insurance with those huge property gains.

Doesn’t seem to make sense keeping it ...under performs and can’t be ‘core’

[winner69]

Some interesting forward thinking demonstrated in the last few slides of the last weeks presentation pack.

‘Big data analytics’, ‘adjacenties’, ‘platforms’, ‘aggregator model’ etc all sound cool but being the ‘Netflix for Cars’ sounds really exciting.

These ideas address some of the concerns some on here have had about the future of the car market - car sharing going to kill them for instance.

Hope it’s all not as expensive and causes short term pain like thl’s move into the online close to consumer space.

[BlackPeter]

Some interesting forward thinking demonstrated in the last few slides of the last weeks presentation pack.

‘Big data analytics’, ‘adjacenties’, ‘platforms’, ‘aggregator model’ etc all sound cool but being the ‘Netflix for Cars’ sounds really exciting.

These ideas address some of the concerns some on here have had about the future of the car market - car sharing going to kill them for instance.

Hope it’s all not as expensive and causes short term pain like thl’s move into the online close to consumer space.

Netflix for cars sounds really cool - but only until you start thinking about it. The business model of Netflix is basically infinitely scalable with very little additional cost for additional customers (they don't need more movies for more customers, given that many customers can watch at the same time the same movie) while for Turners the savings for a larger number of customers are quite minimal. One customer one car, hundred customers hundred cars, one million customers - do I need to expand?

Not sure whether buzzwords which don't really make sense for their circumstances makes their stakeholders feel better.

But maybe they find a way to create (for them) free copies of the cars they are selling - hey, this would be a game changer.

[winner69]

Netflix for cars sounds really cool - but only until you start thinking about it. The business model of Netflix is basically infinitely scalable with very little additional cost for additional customers (they don't need more movies for more customers, given that many customers can watch at the same time the same movie) while for Turners the savings for a larger number of customers are quite minimal. One customer one car, hundred customers hundred cars, one million customers - do I need to expand?

Not sure whether buzzwords which don't really make sense for their circumstances makes their stakeholders feel better.

But maybe they find a way to create (for them) free copies of the cars they are selling - hey, this would be a game changer.

Board and management have been a bit delusional of late ....so I would think if nothing else the sexy looking slides and buzzwords give themselves the warm fuzzies anyway.

[Beagle]

Board and management have been a bit delusional of late ....so I would think if nothing else the sexy looking slides and buzzwords give themselves the warm fuzzies anyway.

Surely this is the best post of the week !! Talk about hitting the nail directly on the head !!

[winner69]

percy (from another thread)

Berkshire Hathaway.
Explicity states it does not consider diversity when hiring board members.
It does not seek diversity,however defined.
Instead, the Governance Committee looks for individuals who have very high integrity,business savvy,an owner oriented attitude, and a deep genuin interest in the company.

Turners Board (all white males by the looks of it) ticks all the boxes ....that’s good

• High integrity — TICK
• Business savvy — TICK
• Owner orientated attitude — TICK
• Deep genuine interest in the company — TICK, TICK TICK

So by implication Turners is a great company ...wonder what’s gone wrong lately

[percy]

Turners Board (all white males by the looks of it) ticks all the boxes ....that’s good

• High integrity — TICK
• Business savvy — TICK
• Owner orientated attitude — TICK
• Deep genuine interest in the company — TICK, TICK TICK

So by implication Turners is a great company ...wonder what’s gone wrong lately

Well as a fully informed shareholder, you know what went wrong,and like me, you will agree the board have identified the problems, and are/have taken the right actions to return Turners to a fully focussed extremely profitable company,that will have the capacity to keep paying increasing fully imputed dividends [paid quarterly],as per my post #5242.
Yes the board tick all Buffett's and Munger's boxes.....I find that reassuring.

ps.Would be nice to own a few Berkshire Hathaway shares too...lol.
pps.Like Buffett, Turners know how to put insurance reserves to very profitable use..No surprises there.!

[winner69]

Well as a fully informed shareholder, you know what went wrong,and like me, you will agree the board have identified the problems, and are/have taken the right actions to return Turners to a fully focussed extremely profitable company,that will have the capacity to keep paying increasing fully imputed dividends [paid quarterly],as per my post #5242.
Yes the board tick all Buffett's and Munger's boxes.....I find that reassuring.

ps.Would be nice to own a few Berkshire Hathaway shares too...lol.
pps.Like Buffett, Turners know how to put insurance reserves to very profitable use..No surprises there.!

Yep, little problems being sorted and now one big problem like a broken model.

And that insurance segment is their worst performing segment (return on net assets) by a long in spite of the extraordinary property profits

No wonder Turners has been one of the worst performing shares on the NZX over the last couple of years.

[Beagle]

Insurance profits probably not repeating every year, loan delinquencies rising fast, vehicle margins under pressure and now directors breaking it up and selling off the pieces.
Looks a LOT different to the fully integrated strong business model with strong and enduring growth prospects we were very regularly assured many times it was and would be by the unofficial company spokesman.

One is never going to read in any Turners presentation that the used vehicle market is an extremely tough and competitive industry with very low barriers to entry ensuring it will always be that way. They'll never tell you its a sunset industry in a very slow systemic state of decline with the advent of self driving electric cars somewhere on the horizon. People have to work that out for themselves and some of us have done exactly that.