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

[forest]

Decided this afternoon to have a look at TRA interim report covering the 6 months to the end of 30 Sep 2019.

However I was unable to find this on the TRA website. Found a ph no to contact them, no luck with that either nobody answering phones at TRA.
Normally interim and full year reports are freely available online 3 months after the period of reporting, why is TRA different???

[greater fool]

Try this:
https://m.nzx.com/announcements/344980

[forest]

Try this:
https://m.nzx.com/announcements/344980

I saw that announcement, found it confusing and therefore like to read the interim report. I was of the understanding that it is an requirement of public companies to make them available.

TRA got an investors section on their website, the latest interim report is missing. Why ??? Phoned them and left message, no reply. Mmn, does not help with investors or potential investors confidence in this company.

[percy]

For TRA's interim go to NZX.com and put in TRA and then go to announcements,2019 27tNov.
or www.stocknessmonster.com TRA,then on right hand side,news,2019 then 27th Nov.


or try this link
https://www.nzx.com/announcements/344980

[forest]

For TRA's interim go to NZX.com and put in TRA and then go to announcements,2019 27tNov.
or www.stocknessmonster.com TRA,then on right hand side,news,2019 then 27th Nov.


or try this link
https://www.nzx.com/announcements/344980

Your right Percy and Greater Fool, the info is there in the second attachment. Very well hidden.

[forest]

Just had a call back from TRA, interim report will be put on their website soon.

[Snoopy]

Turners Automotive Group (TNR/TRA)		FY2015	FY2016	FY2017	FY2018	FY2019
No. Shares on Issue EOFY (TNR/TRA) (*)		63.077m	63.432m	74.524m	84.803m	86.555m (est)
Normalised Earnings Per Share {A}		13.6c	24.2c	21.8c	22.5c	20.1c (est)
Actual Dividend Paid (cps) {B} (**)		5c + 4c	6c + 6c	7c + 3c +3c	4c + 4.5c +3c +3c	4.5c + 5c +4c +4c
Normalised Earnings Retained {A}-(B) (cps)		4.6c	12.2c	8.8c	8.0c	2.6c (est)

(*) The number of TNR shares on issue at the end of the financial year has been adjusted retrospectively for the 23rd March 2016 10:1 share consolidation. To see how the number of TRA shares on issue was derived for FY2015, refer to my post 1413 "Buffett Test 2: Increasing 'eps' Trend (FY2016 perspective): Preamble Part 2.

(**) The actual dividends paid by TNR/TRA over FY2015 and FY2016 were unimputed. This was because of prior losses incurred under the DPC/TNR/TRA structure. However, in my modelling the TUA group was already combined with DPC/TNR/TRA. Previous year TUA profits wiped out those previous year equivalent DPC/TNR/TRA losses. Under this modelled scenario, those FY2015 and FY2016 dividends would have been fully imputed. That's because looking at the combined picture, those prior offsetting DPC/TNR/TRA losses never happened.

From the above table the 'five year average' dividend payout was:

(9c + 12c + 13c +14.5c + 17.5c)/ 5 = 13.20c (net)

Average Gross Dividend Yield (based on a 28% tax rate) is therefore:

13.20 / (1-0.28) = 18.33c

Using a capitalized value gross interest rate of 7.5% (see thread An Investment Story - Geneva/Turners/Heartland, post 40), this translates to a fair value share price of:

18.33c/ 0.075 = $2.44

Last year, I stated that I no longer believed this valuation method provided a satisfactory technique for valuing Turners Automotive Group. This was because the retained earnings of TRA are employed in growing the business, and this valuation method ignores that contribution.

With the share price today trading some 10% below this equivalent $2.44 valuation figure -a figure based only on historical dividend payments-, one could interpret this to mean that the 'retained earnings' part of the profit generated has been squandered and for share valuation purposes should be considered worthless.

I managed to top up today. Not at the low closing price of $2.20, but I bought enough shares to reduce my average holding cost price to $2.64. With my TRA investment, I am buying a 'dividend yield' as calculated above. Buying at any price that will produce a gross yield of greater than 7.5% makes me happy, but good on those who late in the day got an even better deal than I did. I am well aware that in times of uncertainty, splashing out big on a large capital purchase (like a car) is something that can be delayed. But stepping back, and looking at the big picture, I can see some compelling tail winds that makes investing in TRA at 'bargain prices' today, a good idea.

1/ The NZ vehicle fleet is still aging and the need for more replacement vehicles in the medium term has not gone away.
2/ The depreciating currency means that second hand motor vehicles will increase in price in the medium term. Putting off that purchase is likely to have a cost. ( => downturn in vehicle sales in the short term not as great as expected).
3/ The reduction in the price of fuel at the pump from the 25% 'oil price crash', means that less fuel efficient second hand cars are likely to become more attractive 'value wise' compared to a super fuel efficient new car, even one on attractive payment terms.
4/ The push for more electric cars will have to come via the used market. A new electric car is simply too expensive for the average bloke/blokess. Turners seem ideally placed to step in here.
5/ There is a dividend due next month.
6/ At less than $2.44, we are only paying for the income, so any growth we shareholders get is 'for free'.
7/ High company debt levels are mitigated by interest rates grinding even lower.

I don't know how Carly shared ownership of vehicles will work out. I still think the insurance profits are opaque, although that risk is offset for me by buying my new TRA shares at a discounted price. I may have been able to wait and get my TRA shares even cheaper. But I did save money by not chasing up my 'next' Turner's purchase all the way up to $2.70 in the last TRA rally. And my early in the day purchase price meant I was a little under my yield target purchase price even so. All in all, a most satisfactory day on the market for me, for my Turners holding at least!

SNOOPY

[bull....]

another company which could find itself in serious strife , warned while back on the thread of there debt levels and if sales drop off they are very exposed and what did they do spent money on a buyback lol

[Snoopy]

another company which could find itself in serious strife , warned while back on the thread of there debt levels and if sales drop off they are very exposed and what did they do spent money on a buyback lol

Any company that spent money on a buyback over the last couple of years will look silly now. And yes, I get your point about debt levels. But Turners have the ability to get cash quickly by selling stock if needed. It won't do much for profitability if they have to do this, but it will get them out of trouble. Also with Adrian Orr lowering interest rates, this will take the pressure off companies like Turners that operate with significant debt. Aside from al this, the big picture story remains the same. NZ's car fleet is ageing and there is no company better placed than Turners to update it (except perhaps Toyota NZ, and there is room for two).

There are other tailwinds here that you may not fully appreciate Bull. NZers may not be able to take themselves away on an overseas holiday. But they can spend their holiday money on updating their car. Perhaps time to trade in that old 'Toyota Corona' and get this 'Corona' thing out of their system for good. Food for thought?

SNOOPY

[bull....]

Any company that spent money on a buyback over the last couple of years will look silly now. And yes, I get your point about debt levels. But Turners have the ability to get cash quickly by selling stock if needed. It won't do much for profitability if they have to do this, but it will get them out of trouble. Also with Adrian Orr lowering interest rates, this will take the pressure off companies like Turners that operate with significant debt. Aside from al this, the big picture story remains the same. NZ's car fleet is ageing and there is no company better placed than Turners to update it (except perhaps Toyota NZ, and there is room for two).

There are other tailwinds here that you may not fully appreciate Bull. NZers may not be able to take themselves away on an overseas holiday. But they can spend their holiday money on updating their car. Perhaps time to trade in that old 'Toyota Corona' and get this 'Corona' thing out of their system for good. Food for thought?

SNOOPY

i dont know off the top of my head how used car sales go in a deep recession ? as bnz are saying but would help to know to give an indication of how turners may fare.

but they would need sales to stay relatively high to service the debt