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

[percy]

TRA outstanding value - I hope so as put heaps of faith in you all, against my better judgement

But ‘investing’ in shares is akin to punting / gambling so why not take the odd punt and follow the tipsters like you get with modern day versions of Best Bets

Do your own research.
Then no need to gamble,or blame others.
I do,and the more research I do,the better my results I get.

[winner69]

Depth looks promising ...probably an up day today

[winner69]

TRA just can't seem to get out of first gear ....at least it's not in reverse anymore

I'll still get this 5 cent divie won't I if I hold a bit longer?

[rainey]

Where do all these small trades come from

[percy]

Where do all these small trades come from

Its W69 robot.It keeps changing its mind.Buys one minute,then sells.Very undecided.!..lol.

[couta1]

Where do all these small trades come from

Some robot that decided to sell me a few more at $3.01. PS-Im hoping it changes down a gear or two to under $3.

[winner69]

Its W69 robot.It keeps changing its mind.Buys one minute,then sells.Very undecided.!..lol.

No way mate ...either in or out

Anyway waiting for that divie .....that’ll be good ....as long as the price doesn’t drop more than 5 cents afterwards. That would be a bugger

[percy]

No way mate ...either in or out

Anyway waiting for that divie .....that’ll be good ....as long as the price doesn’t drop more than 5 cents afterwards. That would be a bugger

Every three months TRA pay a fully imputed divie.


ps.And they keep increasing them.

[Snoopy]

Five Year History of Turners Limited: Operational NPAT

	FY2012	FY2013	FY2014	FY2015	FY2016
EBIT (Turners Auctions :TUA)	$7.342m	$7.948m	$9.117m
less TUA Liabilities x TNR Interest	$33.272m x 0.12 = ($3.993m)	$36.423m x 0.098 = ($3.570m)	$45.634 x 0.151= ($6.891m)
equals EBT (Turners Auctions)	$3.955m	$4.378m	$2.226m
add EBT (Dorchester)	($1.543m)	($0.133m)	$4.892m
EBIT (Turners Limited)				$26.387m	$32.987m
EBIT (Turners Auctions)				$5.829m(*)
add back Turners Auctions acquisition costs				$0.675m
Interest Expense (Turners Limited)				($7.381m)	($11.436m)
less tax paid equity accounted TUA income			($0.721m)	($0.742m)
less one off paper gain self-caused by TUA takeover				($7.098m)
equals EBT (DPC+TUA)	$2.412m	$4.245m	$6.397m	$17.670m	$21.551m
less tax at 28%	($0.675m)	($1.189m)	($1.791m)	($4.948m)	($6.034m)
equals NPAT (DPC+TUA)	$1.737m	$3.056m	$4.606m	$12.722m	$15.517m

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(*) 'Turners Auctions' was absorbed into 'Turners Limited' on 20th November 2014. This was during the FY2015 Turners Limited financial year which ended on 31st March 2015. Turners Limited FY2015 contained 365 days. For 234 of those days from 1st April 2014, 'Turners Auctions' was an equity accounted investment. Note 18 in Turners Limited AR2015 shows an equity accounted contribution to profit of $0.742m up until 20-11-2014. If we annualise this contribution, assuming a constant earnings rate throughout the year, then we get an annual earnings contribution from this 19.85% strategic stake in TUA of:

$0.742 x 365/234 = $1.157m (EBIT) for that 19.85% stake

This means that 100% of TUA must be making an EBIT of:

$1.157m / 0.1985 = $5.829m

	FY2014	FY2015	FY2016	FY2017	FY2018
EBIT (Turners Auctions :TUA)	$9.117m
less TUA Liabilities x TNR Interest	$45.634 x 0.151= ($6.891m)
equals EBT (Turners Auctions)	$2.226m
add EBT (Dorchester)	$4.892m
EBIT (Turners Automotive Group)		$25.645m	$32.987m	$35.981m	$45.477m
EBIT (Turners Auctions)		$5.829m(*)
add back Turners Auctions acquisition costs		$0.675m
Interest Expense (Turners Automotive Group)		($7.381m)	($11.436m)	($11.350m)	($14.344m)
less tax paid equity accounted TUA income	($0.721m)	($0.742m)
less foreign exchange gain	($1.087m)
less one off paper gain self-caused by TUA takeover		($7.058m)
less revaluation gain on investments and PPE sale		($0.010m)	($0.270m)	($1.313m)	($1.000m) (e)
equals EBT (DPC+TUA)	$5.310m	$16.958m	$21.281m	$23.318m	$30.133m
less tax at 28%	($1.487m)	($4.748m)	($5.949m)	($6.529m)	($8.437m)
equals NPAT (DPC+TUA)	$3.823m	$12.210m	$15.332m	$16.789m	$21.696m

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Notes

1/ (*) 'Turners Auctions' was absorbed into 'Turners Limited' on 20th November 2014. This was during the FY2015 Turners Limited financial year which ended on 31st March 2015. Turners Limited FY2015 contained 365 days. For 234 of those days from 1st April 2014, 'Turners Auctions' was an equity accounted investment. Note 18 in Turners Limited AR2015 shows an equity accounted contribution to profit of $0.742m up until 20-11-2014. If we annualise this contribution, assuming a constant earnings rate throughout the year, then we get an annual earnings contribution from this 19.85% strategic stake in TUA of:

$0.742 x 365/234 = $1.157m (EBIT) for that 19.85% stake

This means that 100% of TUA must be making an EBIT of:

$1.157m / 0.1985 = $5.829m

2/ Eagle eyed table readers will notice that I have moved the one off gain from the full takeover of Turners Auctions in FY2015 from being a taxable to a non-taxable gain.

3/ (e) is a preliminary estimate

SNOOPY

[Snoopy]

	FY2014	FY2015	FY2016	FY2017	FY2018
NPAT {A}	$3.823m	$12.210m	$15.332m	$16.789m	$21.696m
Shares on Issue EOFY{B}	55.966m	63.077m	63.432m	74.524m	84.803m
Earnings Per Share {A}/{B}	6.8cps	19.4cps	24.2cps	22.5cps	25.6cps

In the past I have used a capitalised dividend valuation method to value TRA. However, given the strong retained earnings element within Turners Automotive Group, I now consider this method sub-optimal in terms of assessing the value of the company. Instead I will look to do a capitalized earnings valuation, based on the above data.

SNOOPY