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

[percy]

Email I have just sent to Todd.
Todd,
Trust you and your family are safe and well.
Thank you for a very full and frank update.

[macduffy]

To re-affirm profit guidance in these circumstances says a lot!

[BlackPeter]

To re-affirm profit guidance in these circumstances says a lot!

Agree with that. If it is true, then TRA would be an amazing business, on par with stars like A2M, FPH, GXH and the gentailers.

Still - didn't they say some time ago in one of the AGM's that a high unemployment rate would be bad for TRA? Lets hope they made some realistic assumptions about unemployment rate, peoples ability to pay back loans and peoples ability to lend money for a new pre-loved car when they confirmed their guidance.

Would be nice to know what working assumptions they made about the macroeconomic parameters.

[percy]

Turners update today.
https://stocknessmonster.com/announc...ra.nzx-350973/

[Brain]

Cars breaking down and needing to be replaced with another car will continue. It is possible that people will think it a better idea to drive to work then risk public transport. Tourism,hotels,hair dressers ,and any other close contact business eg chiropractors and knocking shops will all struggle for a while - particularly the knocking shops. By comparison Turners could be a safe bet.

[winner69]

To re-affirm profit guidance in these circumstances says a lot!

First paragraph - Despite a heavily disrupted March, Turners still expect the FY20 result to be within previously stated guidance of $28-$30m net profit before tax. Prior to the emergence of COVID-19 the group was on track to report at the high end of its earlier market guidance.

To me that reads as March was about $2m behind forecast ....probably running at a loss.


Then this bit -Turners expects adverse impacts on 1H21. It is too early to quantify these impacts.

To me that reads that from tomorrow things are not going looking too flash and they’re too scared to say how bad ....but a certainty they’ll be losing money or at best make a few bob.

But no worries ... our people steered us through the GFC. That’s good experience.

I would hazard a guess no divies for a while.

[percy]

The group continues to operate well within its bank covenants. Turners just confirmed an extension of
its securitisation warehouse facility with BNZ to $250 million (previously $200m) and has unrestricted
cash of $20m+ and further funding headroom if required. There are no renewals on debt until 2021.
 Turners benefits from being a purposefully diversified business, with different business cycles. For
example, annuity revenues from finance and insurance help offset the short-term decline in the activitybased revenue businesses of auto retail and credit management.
 Three of the group’s four businesses (Oxford Finance, DPL Insurance, EC Credit Control) are confirmed as
“Essential Services” under the financial institutions classification and are largely operating remotely.
 Turners are working proactively with landlords to reduce rent payments over the time of the lock down
which has largely been received positively by property owners. Government stimulus programs will also
make a substantial difference. All opex and capex plans are being reviewed.
 As well as the clear risks, this new dynamic environment could offer opportunities for the group, given
its leading position in the used vehicle ecosystem, the potential for rationalising of company fleets postlockdown, and activity from customers reducing vehicle costs. EC Credit Control will prosper during this
time given its counter cyclical features.

[Snoopy]

To re-affirm profit guidance in these circumstances says a lot!

Not really as I see it. The COVID scare only became apparent in the last month of the business year for TRA (year ended 31st March). Todd has told us that they were trading ahead of budget until that time. So it stands to reason that with 11 months of performance already locked in, the single disrupted last month will not affect the annual result that much.

No such buoyant predictions have been made for FY2021....

SNOOPY

[BlackPeter]

Not really as I see it. The COVID scare only became apparent in the last month of the business year for TRA (year ended 31st March). Todd has told us that they were trading ahead of budget until that time. So it stands to reason that with 11 months of performance already locked in, the single disrupted last month will not affect the annual result that much.

No such buoyant predictions have been made for FY2021....

SNOOPY

Good point. I assumed falsely their FY is going through to June. But you are right, it ends already today - this means most of the COVID-19 impact will hit their FY2021 (and FY2022).

Loans will still be served this month - people still get paid, redundancy payments and / or the increased benefits.

The unemployment marathon starts in April / May ...

[Arthur]

Lots of cheap cars soon through forced sales. I wonder if they will go back to auctions where they make a cut much quicker and do not care what the price is so much as long as they get it sold. I guess they will slow their Japanese import business.