2CC - 2 Cheap Cars Group

[lorraina]

I see Turners' car sales are up while 2CC's are down.
I expect this is because of the very high % of 2CC's sales were electric and hybrid.,which are not so popular now days.
It will take a lot for 2CC get their sales of petrol cars to fill the loss of electric and hybrid sales.
However I still think 2cc's ratios are still very modest and their balance sheet must be the strongest of any NZ listed company.

Look forward to the agm on the 27th to hear more details of;
"The Company remains confident that initiatives planned for the second half year will improve
NPAT compared to the first half."
 

[BlackPeter]

Company downgrades expectations.....next yrs NPAT now not expected to reach FY24 levels.

https://www.nzx.com/announcements/438294

Quite a difference to what Turners told us yesterday.

Turners eating their lunch?

[Basil]

Quite a difference to what Turners told us yesterday.

Tina eating their lunch?

Fixed that for ya mate lol

[lorraina]

Does Tina have a sister.?.......................................................lol.

Hmmmmmmmmmmm.
TRA up  1.1% today.
2CC up 2.7% today.

[winner (n)]

Does Tina have a sister.?.......................................................lol.

Hmmmmmmmmmmm.
TRA up  1.1% today.
2CC up 2.7% today.

Cheap up as a sign of relief they aren't in the crap good and proper and things will be OK nextbyear

[lorraina]

At the end of the day.
TRA up 1.8%
2CC down 4.1%

[BlackPeter]

At the end of the day.
TRA up 1.8%
2CC down 4.1%

clearly - Tina had a late lunch; Probably just working too hard .

[lorraina]

FY25 OUTLOOK
Despite the headwinds we have experienced in the first five months of trading, 2CC is
encouraged by several factors already in play that we anticipate will gain traction in the
second half.
From an external perspective, the impact of interest rate cuts is expected to begin trickling
through to our customers, alleviating some financial strain they face and improving their
ability to secure finance. This should help support an eventual recovery in demand, reduce
pricing pressures, and improve finance penetration rates.
Within the business, our ongoing focus on enhancing operational efficiencies and expanding
in-house capabilities, along with our Auckland expansion plans, are expected to improve
profitability.
We anticipate a trading uptick as the new Botany site becomes fully operational and the
new Greenlane flagship opens. Additionally, the NZ dollar is expected to remain strong
against the Japanese Yen. These factors, combined with expanding in-house compliance and
panel and paint initiatives, will help contain vehicle costs and improve margins.
Affordable cars are a necessity, so while we anticipate weak market conditions persisting
and immigration numbers to reduce, there are genuine reasons for optimism in the medium
term.
I look forward to reporting on our progress later in the year when we deliver our half-year
results. I

With regard to dividends, the Board makes final decisions only once results are approved at
the half and full year, in accordance with our dividend policy of paying 50% to 60% of NPAT
and acting prudently based on information available at that time.
However, based on our current trading performance, we do anticipate paying a dividend,
albeit less than in FY24. If there are any changes to that expectation, we will update the
market.

[lorraina]

Tougher trading.
2CC remain profitable and paying a reasonable divie on 6th December..[approx 2.2cents net per share]
Balance sheet in excellent shape, and as well as holding a higher stock level than I expected they also hold $ 2.5mil cash.
Cash flow from operations remains positive.
Stock holding is $13.1 mil ..I did expect this to be around $10 to $11mil.
However the higher stock level will cover the further expansion in the Auckland market.

[Basil]

I think only a modest part of this, approx. halving of profits, is attributable to tougher economic conditions which were really only just as tough last year.  Any objective analysis of the year-on-year change must consider the effect of the withdrawn of incentives on second hand EV's, PHEV's and hybrids.  I and BP have warned about this some time back, see posts 48 and 70.   Good luck to holders.

[lorraina]

Yes are caught overstocked with hybrids.
That would explain why their stock level has not reduced as I thought it would,and why their margin is lower as they try to clear the hybrid stock.
Of the 763 total number of cars listed for sale 388 are Hybrids.So some way to go yet.
I expect they are concentrating on getting their stock balance under control.What level that will be I would  guess down from just over 50% to between 20% and 25%.Therefore the number they hold needs to be halved. ie sell about 32 a month,compared with 700  cars they will sell a month over the next 6 months.
Achievable?.Yes.
I must admit if I was looking to replace my Nissan I would buy a hybrid.

[Basil]

I must admit if I was looking to replace my Nissan I would buy a hybrid.

Speaking of Nissan and hybrid, these are a really good hybrid vehicle.  Ask me how I know.
https://www.youtube.com/watch?v=PpK7Fv_QNd0&t=41s

[Stoploss]

Some pretty big discounts in the EV space ...have we reached the bottom yet ?
 From an email this week ..
"You can now own the impressive 2022 Car of the Year, Hyundai IONIQ 5 EV, from only $44,990 + ORC. No, we're not kidding, while stocks last you can save a whopping $35k on a Hyundai IONIQ 5 100% EV 58 kWh."

[keerti]

Yes, big discounts on all EVs.

Ford selling brand new pre-registered Mustang Mach e from $45k, $55K(AWD) and $65k(GT), almost 50% from peak😊.

[Basil]

My goodness, the whole EV market is a bloodbath.  Very pleased Todd Hunter warned me off them saying you'll get absolutely taken to the cleaners with really extreme levels of depreciation.