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

[Rawz]

Roadmap to $40 sounds good to me

I think the future of new car dealerships is 5 or so demo models on site and you 'build' and order a car after a test drive. Delivery in 2 months time. Get ya orders in now before Christmas! Huge cost savings for the new car dealerships- they dont have to have million dollar floorplan facilities covering the cost of stocking 100 or so cars on the yard. Lease smaller yards, don't have to insure as many, don't have to constantly groom them etc etc.

Maybe this could help TRA.. Maybe people don't/can't wait 2 months for a new car, so they go buy used instead. Or maybe the big new car dealerships that shrink to stocking only a handful of new cars then decide they no longer want to stock trade-ins. i.e no used department. It could be possible one day once TRA gets appropriate national site coverage that we wake up to a NZX announcement that TRA and Ford NZ (or Toyota or Honda etc) have signed a landmark agreement for all trade-ins to be marketed and sold via TRA's 50+ site... through NZs most trusted and reliable used car seller

[RTM]

Turners need to refine/prove their model and start moving globally. No point to being a large fish in a small pond. They've got to get out of the goldfish bowl and the sooner the better

My holding would be reduced almost immediately if they went down this route. I’d probably halve my holding.
Hi risk IMO.
Disc…Hold, 4% of portfolio.

[Beagle]

No harm in Dividend reinvestment program's (DRIP's) in my opinion. Company could easily lift payout ratio to 80% from 70% and institute a DRIP and their net cash payout would probably be a bit lower than the current percentage which would give them more capital for expansion.

DRIP's if set up correctly are a winner because those that want to build their stake and wealth over time take shares in lieu of dividend and those that want the cash get more of it because the company can maintain a higher payout ratio without impinging their ability to retain some capital for growth. Shareholders are winners as they get choice and benefits one way or the other whichever option they choose and the company is also a winner as they get more capital for growth. Everyone is a winner !!

[winner69]

Repaying $25m bonds in a few weeks ..the 5.5% ones

Will save them a few bob

[Louloubell]

Turners need to refine/prove their model and start moving globally. No point to being a large fish in a small pond. They've got to get out of the goldfish bowl and the sooner the better


I don't agree with the above. There is so much potential to grow the business in NZ. There are so many small players in the market. Turners have their reputation and economy of scale.

[iceman]

Turners need to refine/prove their model and start moving globally. No point to being a large fish in a small pond. They've got to get out of the goldfish bowl and the sooner the better

Please no. Stick to their knitting in a market they know well.

[Biscuit]

Turners need to refine/prove their model and start moving globally. No point to being a large fish in a small pond. They've got to get out of the goldfish bowl and the sooner the better


I don't agree with the above. There is so much potential to grow the business in NZ. There are so many small players in the market. Turners have their reputation and economy of scale.

Sure, would worry me too, but worry is the spice of life. Its a global economy, if you don't start thinking globally what's the point of getting out of bed in the morning? Prove your model here then start the exponential global expansion. Look at MFT, and they are just a trucking company, any penniless cowboy can do it, but a well thought out, determined, strategy of a well-run kiwi company could take on international competition in overseas markets. What makes you think TRA are not as good as MFT?

[winner69]

No harm in Dividend reinvestment program's (DRIP's) in my opinion. Company could easily lift payout ratio to 80% from 70% and institute a DRIP and their net cash payout would probably be a bit lower than the current percentage which would give them more capital for expansion.

DRIP's if set up correctly are a winner because those that want to build their stake and wealth over time take shares in lieu of dividend and those that want the cash get more of it because the company can maintain a higher payout ratio without impinging their ability to retain some capital for growth. Shareholders are winners as they get choice and benefits one way or the other whichever option they choose and the company is also a winner as they get more capital for growth. Everyone is a winner !!

Obviously have no intention of having a higher payout ratio - Chart in ASM presentation has Underlying NPBT growing 9.5% pa over the next three years ...but divie only increasing 7.7% pa

But that 9.5% is a bit misleading - Reported NPBT only growing at 6.4% pa if $45m is the target

Not that aspirational is it but suppose 6.4% is better than nothing - no wonder they don't appear to need any more capital

[Beagle]

Obviously have no intention of having a higher payout ratio - Chart in ASM presentation has Underlying NPBT growing 9.5% pa over the next three years ...but divie only increasing 7.7% pa

But that 9.5% is a bit misleading - Reported NPBT only growing at 6.4% pa if $45m is the target

Not that aspirational is it but suppose 6.4% is better than nothing - no wonder they don't appear to need any more capital

They mentioned they were growing at 15% before the lockdown. Q1 lending up 87%. Plenty of growth in N.Z. Retail will explode in Auckland when we're allowed out of Covid prison. It was clear in the presentation they are on track to exceed $45m in FY24. $37.4m FY21 with 10% compound annual earnings growth gives ~ $50m in FY24...that looks like a good motivational target that they will probably beat.

Notice how they're not talking roadmap to $5 anymore ? Next year they'll be talking roadmap to $7

Good company that has spent a lot of time getting its systems right which are now easily scalable. Probably deserves a higher PE than the market is according it.

[winner69]

They mentioned they were growing at 15% before the lockdown. Q1 lending up 87%. Plenty of growth in N.Z. Retail will explode in Auckland when we're allowed out of Covid prison.

Notice how they're not talking roadmap to $5 anymore ? Next year they'll be talking roadmap to $7.

Good company that has spent a lot of time getting its systems right which are now easily scalable. Probably deserves a higher PE than the market is according it.

But when tell a great story but when they show on slide headed ‘ Line of sight on where we’re going’ that NPBT is only going to grow at 6.5% pa for the next three years no wonder the market is pricing TRA as it is

Not a growth company now ..only good for a yield …not exciting


They tell a great story story ……but dont demonstrate much in the way earnings growth.