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

[biker]

In July DPC will have no notes no options and just one type of share. Very clear I'd say!
I have HNZ also but see DPC with greater potential for growth - organic and M&A.

( and apropos CNU, I don't work for DPC!)

[percy]

In July DPC will have no notes no options and just one type of share. Very clear I'd say!
I have HNZ also but see DPC with greater potential for growth - organic and M&A.

( and apropos CNU, I don't work for DPC!)

As I don't hold DPC I hope you are wrong about greater potential for growth.! lol
I do agree with you about M&A.As a TUA shareholder I think DPC's 20% holding is a very clever move on their part.

[blackcap]

In July DPC will have no notes no options and just one type of share. Very clear I'd say!
I have HNZ also but see DPC with greater potential for growth - organic and M&A.

( and apropos CNU, I don't work for DPC!)

Very clear after July, but by then the damage will have been done. With damage I mean the dilution of ordinary shareholders share in the company. For me DPC has great potential but I would like to see them prove themselves first before venturing in again. I think Paul Byrnes is doing a stellar job and knows how to run the ship. I just cannot see DPC capitalised at over $100m. It just does not make sense. Will be watching their cash flow from operations when the financials become available as that may tell the real story.

[blackcap]

Here come the additional 110 million shares at 10 cents....
Early Conversion of Optional Convertible Notes
Resolution 8
That the early conversion of 110 million optional convertible notes into 110
million ordinary shares in the Company, as further specified in the
explanatory notes accompanying the Company's notice of annual meeting of
shareholders dated 2 August 2013, is approved for all purposes, including for
the purposes of NZSX Listing Rules 9.2, 7.3.1(a) and 7.5 and Rule 7(d) of the
Takeovers Code.

23 August to be precise but again it is dilutionary and may explain the recent lackluster performance of DPC. In addition the note holders are going to get $1.7m of interest as if the notes were to go to 2015. But they are not and they are getting shares at 10 cents. So the $11m loan will cost shareholders $1.7m in interest and a huge dilutionary factor. Not very good in my opinion.

All things going well though I believe 18-20 cents may be a good entry point if they can attain the profit they predict.

[blackcap]

That would be an excellent entry point in my view ... you may get lucky but I think it is unlikely the SP will get much lower than currently. It has been trading around .24 cents for some time now on improved liquidity since the options were converted ... I was hoping to get some cheap options in the weeks before the expiry but they never got much below .12 (.245 following conversion).

I doubt the early note conversion will make any difference as it has been well signalled and the vast majority of notes are held by current large shareholders - none of whom appear to be sellers.

Disclosure - Have a significant holding at entry around .24 cents.

Agree with you that this was signaled and if not wouldn't be hard to work out. Agree also that none of the 110m new shares will likely be sellers. (Unlike option converters) However what it does do is dilute any profit that would be coming towards me as a shareholder (yes i still hold a couple of thousand after selling the rest of my shares) and therefore reduces EPS considerably. That is why I think 18-20 cents is fair value if (and that is the question) they can attain the profits they predict.

[blackcap]

Maybe people are now starting to read between the lines in the Simmons report. Last sale at 21 cents and soon they will be cheap to buy. I just wonder who it is that is selling out. Is it the instos that got in the placement at 25 thinking "blow this for a joke" or is it the people who converted the options recently for 12.5 cents?

[blackcap]

Not sure why they (the instos) would have changed their view - AGM reports are positive - the early conversion of the notes having been well signalled. I haven't seen any signs of anyone significant selling out - no reason to. The share price goes up and down on very small volumns.

AGM reports as a rule are positive. Predicting $10m profit in 3 years time on 468 million shares. That is if they can achieve 30% growth. Not a given either. Not really setting he world on fire I would have thought. Merger activity could be interesting and they do have some good people on board. Around the 20 cent mark it could be worth a punt but plenty of other prospects out there.

[Snoopy]

Hi All,

Long time poster on this forum but first time poster on this thread. I will start out by declaring my interest. I do not hold Dorchester shares and never have. I am however a long term holder in Turners Auctions, the company in which Dorchester has this year bought a significant stake. So I have a cousinly interest in how DPC, the finance partner of TUA is going.

I have a bit of a problem with finance company shares, in that 'conventional' metrics such as PE ratio, dividend yield etc. can be suddenly made meaningless by a mismatch of cashflows between assets and liabilities. So I have taken to measuring such companies using a separate 'financial yardstick' inspired by UBS and First NZ Capital when they produced guidelines for another finance company (PGW Finance) to follow after the financial crisis to 'steer themselves clear'.

So without further ado, I will dive into the Dorchester FY2013 financial report and see how they stack up against these 'steer clear of the rocks' statistics.

SNOOPY

[Snoopy]

So without further ado, I will dive into the Dorchester FY2013 financial report and see how they stack up against these 'steer clear of the rocks' statistics.

'EBIT' not listed in the DPC FY2013 annual report so I have had to derive it from other numbers. That means adjusting the NPAT for tax refunds before finallly adding back the interest expense.

($-0.133m + $2.355m)/$2.355m = 0.9453 < 1.2

=> DPC fails the EBIT to Interest Expense Ratio test.

SNOOPY

[Snoopy]

So without further ado, I will dive into the Dorchester FY2013 financial report and see how they stack up against these 'steer clear of the rocks' statistics.

The gearing ratio in based on the underlying debt of the company, stripping out the loans made to others on the balance sheet.

$70.765m -( $7.834m + $16.370m + $4.681m ) = $41.880m

Likewise on the asset side of the balance sheet we have to strip the finance receivables from the other (underlying) company assets. From the Balance Sheet.

$103.955m - $28.757m = $75.198m

Gearing Ratio = Underlying Liabilities/Underlying Assets = $41.880m/$75.198m = 55.7% < 90%

=> Pass Test

SNOOPY