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

[Sideshow Bob]

Top Result!!


Turners delivers record earnings result for FY22 - NZX, New Zealand’s Exchange

Turners Automotive Group (NZX: TRA) has reported record earnings for the financial year to March 31, 2022 (FY22), despite a COVID-19 disrupted year from lockdowns and more recent impact of Omicron on consumer demand and operational resource. This resilience demonstrates the value of the strategic initiatives implemented by Turners over recent years to de-risk, consolidate and build more sustainable earnings.

Key Financial Highlights:

• Revenue $342.0m +15%
• EBIT $47.7m up 11%
• NPBT $43.1m +15%
• NPAT $31.3m +16%
• Underlying NPBT $44.1m +29%
• Full year dividend 23.0 cps + 15%
• Earnings per share 36.4cps +16%

Key Business Highlights:

• Final FY22 dividend declared at 7.0 cps bringing FY22 dividend to 23.0 cps (equating to a gross yield of 8%+ per annum based on the current share price
• Record earnings from divisions (Auto Retail, Finance and Insurance) operating in the used car market.
• Market share has continued to grow in Auto Retail Division, with good pipeline of new branches building.
• Market share growth delivering improved annuity earnings from Finance and Insurance divisions.
• Debt load returning slowly in credit management business but environment should be more productive in FY23
• Employee engagement at an all-time high (top 5% of companies using Peakon tool) has continued to increase at a time where retention and recruitment have been under significant pressure.
• Macro headwinds (inflation and interest rates) starting to impact…speed of change biggest challenge.

[Beagle]

Very pleasing indeed. From the call, thanks to a question from some old dog Tina locked in on a long term contract ! You beauty ! Tina to Turners is what Tammy is to Briscoes, Marketing Gold !!

Presentation http://nzx-prod-s7fsd7f98s.s3-websit...529/371180.pdf

[Rawz]

Great auto retailer
Great finance company
Great insurance company
Great debt collection company
Great property holding company

EPS up 16%
DPS up 15%

Very pleasing to read and then hear on the call that they know we are heading into some economic headwinds and have planned for it and allowed for it in their 3 year guidance. TRA will grow dividends and EPS during the downturn..

Happy holder

[Beagle]

Interesting comment on the call, if it weren't for lockdown's and Omricon we believe we would have done $50m Net profit before tax this year !
WOW !

Somewhat interesting little anecdote.
I have a perfectly good car and in the past I have a habit of updating it too regularly.
I ran the numbers on putting in $100K plus my car to upgrade to a fancy BMW this morning and how it would likely depreciate to about half its value in the next 3 years + extra fuel, maintenance and insurance costs or putting that money into Turners instead, getting an average gross yield of about 9% over the next 3 years and expecting the share price to be $5 in 2025, (i.e. putting the money into an appreciating asset rather than a rapidly depreciating one) and the difference between these two outcomes is that I would be more than $500 per week better off investing in other people dealing cars rather than engaging with my hedonistic desires. What I have learned from past experience is after a few months the thrill of the new toy has worn off (hedonic adaption), and one is left $500+ worse off per week and that is not a good way to build wealth and resiliency in one's personal finances !

[Rawz]

Interesting comment on the call, if it weren't for lockdown's and Omricon we believe we would have done $50m Net profit before tax this year !
WOW !

Yes amazing!!

That FY25 $50m npbt target has to be their ultra conservative number... maybe assuming very hard landing.. so they are saying we will grow even when the economy goes backwards

I reckon lots of upside here depending on how the macro plays out

[Muse]

Interesting comment on the call, if it weren't for lockdown's and Omricon we believe we would have done $50m Net profit before tax this year !
WOW !

Aye big, yuge.
But in some respects I’m pleased that didnt happen - smoother earnings, avoiding the big jump that everyone would have questioned on where to next etc. I would have gladly taken the extra divvies though.

Congrats to Todd and the rest of the team at Turners. Shows you dont have to be worth billions of dollars to be a blue chip quality company, and TRA’s business model is fit for purpose.

[Beagle]

Thanks Rawz and FM. I agree 100% with both your comments.

[Biscuit]

......the difference between these two outcomes is that I would be more than $500 per week better off investing in other people dealing cars rather than engaging with my hedonistic desires. What I have learned from past experience is after a few months the thrill of the new toy has worn off (hedonic adaption), and one is left $500+ worse off per week and that is not a good way to build wealth and resiliency in one's personal finances !

Shhhhhh, mate! I'm relying on other people's poor financial management to fund my lifestyle!

[BlackPeter]

OK - just to make sure we don't fall into the GroupThink trap ...

Solid result (revenue roughly 5% above analyst estimates, earnings however (despite a peak) somewhat below estimate ... but maybe the mistake is on marketsreener - for some reason they register some of TRA's data in USD.

Whatever it is - I don't think there is a guarantee that next year will be better then this year. Interest rates jumping, petrol prices at unheard heights ... and nobody might want to buy all the gaz-guzzling SUV's and Pick ups which have been brought into the country only in the last couple of years. Which means less turnover for the dealers and less money in the pocket for any driver (i.e. less spare cash to buy a less thirsty preloved one).

Markets are forward looking. I wonder whether this is the reason Todd is not anymore talking about $5 SP?

Still - great management and interesting business - will put them into my "wait for the next cyclical bottom" watchlist next to HLG .

[BlackPeter]

Total Equity to asset ratio is at the highest level since start of my recordings in 2016: It is now at 69.5%, up from 67.5 last year.

While I realize that they are in a way similar to a bank ... just wondering though whether higher debts have just benefits in times of rising interest rates?