2CC - 2 Cheap Cars Group

[lorraina]

The seller was the 8th largest shareholder.He is a Christchurch investor, who has a lot of large holdings in a number of small cap companies.He invests in his own name, as well as two finance companies he owns.This holding was in one of his finance company's name.
I am now guessing he sold via a Christchurch broker to another Christchurch investor, who also invests in small cap companies.
I expect we will know the new owner's name when 2CC's annual report comes out in June.

[Buzz]

The seller was the 8th largest shareholder.He is a Christchurch investor, who has a lot of large holdings in a number of small cap companies.He invests in his own name, as well as two finance companies he owns.This holding was in one of his finance company's name.
I am now guessing he sold via a Christchurch broker to another Christchurch investor, who also invests in small cap companies.
I expect we will know the new owner's name when 2CC's annual report comes out in June.

Interesting, thank you. Presumably the sale was carefully aligned to enough ASK in the queue, it seems to have been 'on market', so therefore the question moves to why did the seller lose confidence in 2CC and who was the buyer wanting such a significant stake?

Perhaps more interesting might be how do you know this? Where do you get these insights from?

[Crackity]

The seller was the 8th largest shareholder.He is a Christchurch investor, who has a lot of large holdings in a number of small cap companies.He invests in his own name, as well as two finance companies he owns.This holding was in one of his finance company's name.
I am now guessing he sold via a Christchurch broker to another Christchurch investor, who also invests in small cap companies.
I expect we will know the new owner's name when 2CC's annual report comes out in June.

Number 9 on the list buy any? 🤭

[lorraina]

Not any of the 290,000 off market yesterday,however I have been slowly adding to both my holding and the wife's.

[lorraina]

From Autotalk.
Despite the challenges of fewer selling days due to public holidays and school breaks, the surge in registrations of imported used passenger vehicles by 10% in April 2024, reaching 8731 units, is a significant trend to note.

This figure marks a notable increase from the 7939 units registered in April 2023.
Positive for TRA and 2CC.

[lorraina]

An exciting promotion from 2CC.

🚗🔥Win a Car in May!!🔥🚗



Buy your dream car this May'24 and go into the draw and you could be getting your car purchase for FREE*!! 🤯🚙💨 Whether you're looking for a sleek sedan, a spacious SUV, or a zippy hatchback, we've got you covered.



Sale details:

· Every completed purchase in May goes into a lucky draw



· Promo valid from 1st May'24 to 31st May'24.

May should be a great month for 2Cc.
Due to report at th end of the month.

[Left Field]

While the NZX link to 2CC results seems to be malfunctioning this morning..... Jarden's site has the following info.... looks like good news for holders, EPS growth impressive as is 213% increase in NPAT.

Later edit.... NZX site now working ... here's the link;

 https://www.nzx.com/announcements/431658

Summary of key results
(Figures quoted are in NZ dollars. Comparisons are made against FY23.)

o Revenue and income: $86.8m, increased 5% .
o Gross margin: $20.3m up 39%.
o Vehicle sales: Down 2% to 8,169.
o Underlying EBITDA including finance income: $11.4m, up 105%.
o Net profit after tax (NPAT): $6.2m, up $4.9m.
o Underlying NPAT2: $6.2m, up 213%.
o Underlying earnings per share (EPS): 14 cents per share (cps) vs 4.4 cps.
o Final gross dividend: 5.78 cps.
o Total FY24 gross dividend: 11.56 cps vs 0 cps.

[lorraina]

A Stunner....
FY24 results - Record profit and dividend declared
24/05/2024, 8:30 am, FLLYR
24 May 2024

Market announcement
NZX:2CC

FY24 results
Record profit and dividend declared

2 Cheap Cars Group Limited (NZX:2CC) has today reported a record $6.2m net profit after tax (NPAT) for the full year to 31 March 2024 (FY24), an increase of $4.9m over FY23.

Summary of key results
(Figures quoted are in NZ dollars. Comparisons are made against FY23.)

• Revenue and income: $86.8m, increased 5% .
• Gross margin: $20.3m up 39%.
• Vehicle sales: Down 2% to 8,169.
• Underlying EBITDA including finance income: $11.4m, up 105%.
• Net profit after tax (NPAT): $6.2m, up $4.9m.
• Underlying NPAT2: $6.2m, up 213%.
• Underlying earnings per share (EPS): 14 cents per share (cps) vs 4.4 cps.
• Final gross dividend: 5.78 cps.
• Total FY24 gross dividend: 11.56 cps vs 0 cps.

The Company achieved full year revenue and income of $86.8m, an increase of 5%, driven by higher prices and improved finance and insurance (F&I) penetration rates which have offset slightly lower volumes for the full year.

2CC's gross margin expansion strategy has been extremely effective, strengthening 6% to 23% for the full year. This has been achieved through optimised pricing, effective promotional activity, improved finance and insurance penetration and the continued insourcing of compliance activities. The full year gross margin is up 39% to $20.3m.

Operating costs have risen marginally by 1% to $8.9m, significantly below the rate of inflation. Management continues to be strongly focused on both minimising cost increases and reducing reliance on third parties throughout the value chain.

The Company's focus on gross margin and tight control of operating costs has seen underlying EBITDA including finance income increase 105% to $11.4m in FY24.

Underlying NPAT, excluding last year's non-recurring costs, increased by 213% to a record $6.2m in FY24.

Interest costs, excluding those associated with leases, were down 52% on FY23, reflecting changes in finance facilities and prudent capital management.

Net operating cash inflow was $6.9, down $6.3m year on year, largely due to the strategic decision to maintain stronger inventory levels. The Company is well positioned with inventory valued at a healthy $13.9m, (up $5.5m over FY23 which was impacted by shipping constraints).

As at 31 March 2024, the Company is in compliance with all banking covenants and has cash of $4.7m, no net debt and total equity of $20.4m.

[Breezy]

A Stunner....
FY24 results - Record profit and dividend declared
24/05/2024, 8:30 am, FLLYR
24 May 2024

Market announcement
NZX:2CC

FY24 results
Record profit and dividend declared

2 Cheap Cars Group Limited (NZX:2CC) has today reported a record $6.2m net profit after tax (NPAT) for the full year to 31 March 2024 (FY24), an increase of $4.9m over FY23.

Summary of key results
(Figures quoted are in NZ dollars. Comparisons are made against FY23.)

• Revenue and income: $86.8m, increased 5% .
• Gross margin: $20.3m up 39%.
• Vehicle sales: Down 2% to 8,169.
• Underlying EBITDA including finance income: $11.4m, up 105%.
• Net profit after tax (NPAT): $6.2m, up $4.9m.
• Underlying NPAT2: $6.2m, up 213%.
• Underlying earnings per share (EPS): 14 cents per share (cps) vs 4.4 cps.
• Final gross dividend: 5.78 cps.
• Total FY24 gross dividend: 11.56 cps vs 0 cps.

The Company achieved full year revenue and income of $86.8m, an increase of 5%, driven by higher prices and improved finance and insurance (F&I) penetration rates which have offset slightly lower volumes for the full year.

2CC's gross margin expansion strategy has been extremely effective, strengthening 6% to 23% for the full year. This has been achieved through optimised pricing, effective promotional activity, improved finance and insurance penetration and the continued insourcing of compliance activities. The full year gross margin is up 39% to $20.3m.

Operating costs have risen marginally by 1% to $8.9m, significantly below the rate of inflation. Management continues to be strongly focused on both minimising cost increases and reducing reliance on third parties throughout the value chain.

The Company's focus on gross margin and tight control of operating costs has seen underlying EBITDA including finance income increase 105% to $11.4m in FY24.

Underlying NPAT, excluding last year's non-recurring costs, increased by 213% to a record $6.2m in FY24.

Interest costs, excluding those associated with leases, were down 52% on FY23, reflecting changes in finance facilities and prudent capital management.

Net operating cash inflow was $6.9, down $6.3m year on year, largely due to the strategic decision to maintain stronger inventory levels. The Company is well positioned with inventory valued at a healthy $13.9m, (up $5.5m over FY23 which was impacted by shipping constraints).

As at 31 March 2024, the Company is in compliance with all banking covenants and has cash of $4.7m, no net debt and total equity of $20.4m.

We desperately need this to happen to PAZ. Lol

[lorraina]

Since I started buying I have never stopped.
Even buying today.
No debt,cash on hand,equity ratio 59.28% strong balance sheet, positive cash flow from operations,stock they can increase or decrease quickly,selling right priced used cars they source themselves from Japan.Current assets 2.7 times current liabilities.Simple profitable business model,with growth prospects.
At 88 cents.Low PE ratio [6.28]and high dividend yield [gross 13.14%] beats every other NZ listed company.
At $1.25 share price the current PE would be 8.928 while the gross yield would be 9.248% and net yield of 6.65%
Deserves a PE ratio between 10 and 12 in my opinion.ie share price between $1.40 and $1.68.
"It is incredibly tough going right now for very many New Zealanders, but they still need cars, and those cars must be affordable."said 2CC's chairman today.
Turners and 2CC are well positioned to supply those cars.

[Dolcile]

I'd love to buy into good stocks like 2CC/TRA with great yeilds but on a 39% margin tax rate it just doesn't seem worth it - as compared to investing in a global PIE fund that tracks an index.

[Basil]

I'd love to buy into good stocks like 2CC/TRA with great yeilds but on a 39% margin tax rate it just doesn't seem worth it - as compared to investing in a global PIE fund that tracks an index.

Bob or two each way might be a good idea.  Marlin and Turners are two of my biggest positions.

[entrep]

I'd love to buy into good stocks like 2CC/TRA with great yeilds but on a 39% margin tax rate it just doesn't seem worth it - as compared to investing in a global PIE fund that tracks an index.

Any specific PIR funds you'd recommend?

[lorraina]

ASB have updated.2CC.

52 week high $0.930 52 week low $0.260
Dividend CPS 8.32 Dividend yield (Net) 9.24%
EPS 13.70 P/E ratio (Adjusted) 6.57
NTA 44.00
Market capitalisation $40,999,050.00

Low PE ratio
high NET dividend yield.

[lorraina]

OUTLOOK
FOR FY25
With the transformation now complete, the
Company's focus remains on delivering gross
margin over market share, continuous BAU
improvement and profitable, sustainable
growth through its property strategy.
The property strategy is a key growth factor
for 2 Cheap Cars, with positive steps being
taken to identify and develop new or better
retail locations which benefit its scale model,
particularly in Auckland.
2 Cheap Cars has a very clear value proposition
and strategy that compares favourably to
many competitors, particularly in the prevailing
economic environment. Having said that,
market conditions and foreign exchange rates
remain unpredictable and are – as always –
beyond any Company's control.Affordable cars are a necessity, and we are
confident the Company is well positioned to
take advantage of increases in immigration and
the more general consumer flight to cheaper
vehicles. However, the business is under no
illusion that to remain profitable it must
continue to be vigilant and diligent with costcutting and supply chain efficiencies.
Assuming favourable supply, currency and
trading conditions, NPAT is expected to
remain steady in FY25 by focusing on gross
margin expansion, prudent cost management,
increasing direct control of the value chain and
sensible expansion in Auckland.

Look forward to the "sensible expansion in Auckland."