2CC - 2 Cheap Cars Group

[Plata]

On the 28th Sept David can buy on market. I think he will creep his up over the next year or so and then make a final play. I doubt he treats it lightly the prospect of going from a net cash 2CC to a heavily indebted 2CC post takeover, whilst it seems he could potentially get the offer closer to $1 it seems alot lower risk for him to delay. I wonder if minorities will secure a better outcome by becoming a related party block via shareholders agreements or something similar.

[Basil]

On the 28th Sept David can buy on market. I think he will creep his up over the next year or so and then make a final play. I doubt he treats it lightly the prospect of going from a net cash 2CC to a heavily indebted 2CC post takeover, whilst it seems he could potentially get the offer closer to $1 it seems alot lower risk for him to delay. I wonder if minorities will secure a better outcome by becoming a related party block via shareholders agreements or something similar.

Earnings for FY26 could be a LOT higher than FY25, (first half profit seems on track to roughly triple the same period last year), and it could be a LOT more expensive to takeover the company later on.  I'd argue he's better to try and negotiate a mutually satisfactory deal with significant minority shareholders now, get them into a lock-up agreement and see if he can get this over the 90% line with the other shareholders but he probably thinks he knows better so time will tell how this plays out..    What's clear is very few people so far, (incredibly low acceptances to date), think the 80 cents offer is fair and reasonable.

[lorraina]

Trading update

2 Cheap Cars Group Limited (NZX: 2CC) advises that its unaudited management accounts for August 2026 show a net profit after tax (NPAT) of approximately $330,000.

To release processing capacity, improve stock flow and increase sale-ready inventory, periodically the Company disposes of aged or uneconomic-to-repair vehicles via wholesale channels. In August, the net impact of these efforts was a loss of about $70,000 while sale-ready inventory was boosted from ~640 to now over ~720 vehicles.

This brings unaudited NPAT for the first five months of FY27 to approximately $2.32 million.



I note hybrids this morning account for 53.45% of the cars they have for sale today.ie 387 cars out of a total of 724 cars for sale.
This means 2CC is well placed for strong Spring and Summer sales..

[Plata]

Got to chuckle at that email. Someone REALLY wants a new deck.

[Basil]

Trading update

2 Cheap Cars Group Limited (NZX: 2CC) advises that its unaudited management accounts for August 2026 show a net profit after tax (NPAT) of approximately $330,000.

To release processing capacity, improve stock flow and increase sale-ready inventory, periodically the Company disposes of aged or uneconomic-to-repair vehicles via wholesale channels. In August, the net impact of these efforts was a loss of about $70,000 while sale-ready inventory was boosted from ~640 to now over ~720 vehicles.

This brings unaudited NPAT for the first five months of FY27 to approximately $2.32 million.



I note hybrids this morning account for 53.45% of the cars they have for sale today.ie 387 cars out of a total of 724 cars for sale.
This means 2CC is well placed for strong Spring and Summer sales..

$400K normalised is a great result for August which is usually a pretty shitty winter month with few people wanting to venture out onto car yards.  Looking at their stock level they are extremely well positioned for strong spring sales.

[lorraina]

Got to chuckle at that email. Someone REALLY wants a new deck.

What email?

[Plata]

What email?

An open letter to shareholders from some guy, was sent out today. Would be even more amusing if you didn't get one given how much more of these you've got than I

[lorraina]

No I have not received it.
Wife and I did receive a  notice of variation from Sena & co dated 9th September.
 

[Basil]

I think with all due respect to Tony Falkenstein he needs a better water filter so he can think more clearly lol.

I'll email you a copy of what he said lorriana.

[lorraina]

Thanks.
Tony's email makes no sense to me.

Part of my email to Tony,

I think your email to shareholders is not in their best interest.
The Simmons independent report is not something a shareholder should be asked to make an investment decision on.
Reread it and ask yourself what an Australian motorcycle dealer and new car dealers have to do with 2CC.
I know a very astute ex private equity investor who told me it was the worst independent report he has ever read.
Why you chose to put your good name to your email beats me.

[lorraina]

Ron Gillatt,
Ron left a $60mil estate .
Ron loved his shares,and always attended agms held in Christchurch.
He invested widely but his true love was looking for gems in small cap companies,including those on USX.
Until she died his lovely wife Joan would accompany him to meetings.
A very modest man who was  easy  to talk to,and would share his wisdom with you.
Never asked questions at meetings ,but spent time after the meetings talking to directors.
And yes he was a 2CC shareholder at the time of his death..
 

[777]

90 cents now.

[lorraina]

Wife and I intend to accept the new 90 cent offer.
Thanks to Basil,James at Sharetrader,Oliver Mander,and the many others who have given their time in rejecting the 80 cents offer.
Although I have always thought 2CC shares were worth a lot more,when there is a "big" liquidity event one must take advantage of it,whether buying or selling.

[Basil]

For quite some time now I have viewed 90 cents as the absolute minimum price I would accept. Ideally I would have liked to see just over $1, or even $1.00. My assessment of future maintainable profit across various business cycles is $4.5m, north of the $4.0m base case in the Simmons report.
$4.5m = EPS of 10 cents per share.
90 cents is a PE of 9.

He's getting it cheap, no argument about that from me and shareholders are also forgoing any dividend for the half year to 30 Sept. However whilst its clear that the business is currently enjoying tailwinds from the Middle East crisis that won't always be the case and when you look at the full trading history of the company since it listed, growth on average in EPS has been very modest. For a microcap with modest EPS growth I think 90 CPS is a tolerable deal.

I note that I can reapply the proceeds to a company with a 60+ year history of trading on the NZX, that's got a proven 10 year EPS CAGR rate of 15.7%, no debt and trades on only 10.7 times FY27 EPS.
If you don't know what company I'm talking about you obviously don't follow my posts. That company has outstanding growth prospects in Australia and is a well proven and very well respected company. By comparison I am more than happy to reapply 2CC takeover proceeds to more shares in a company who's management has my complete respect and admiration with a vastly superior average growth rate but on very similar metrics.

Its clear the offer will not be increased. I intend to accept the offer in full for my shares.[/color] I'm also pleased this thing is wrapping up one way or the other on 30 September. Its dragged on long enough already and some of the needless bickering going on, including from one who should know better, especially seeing as how much work I put into this, has been really getting on my nerves. It'll be good to get this deal done and dusted and the money in the tin.

Frankly Its been bloody "hard work" but nevertheless rewarding and I am pleased that other shareholders who choose to accept will also likely benefit. I respect everyone still has the right to choose what they want to do but for what its worth, I am confident the 90 cent offer will be a success.

[Left Field]

Wife and I intend to accept the new 90 cent offer.
Thanks to Basil,James at Sharetrader,Oliver Mander,and the many others who have given their time in rejecting the 80 cents offer.
Although I have always thought 2CC shares were worth a lot more,when there is a "big" liquidity event one must take advantage of it,whether buying or selling.

Well done Percy ( & wife). Your canny early investment in 2CC has done exceptionally well for you and your family.  Well deserved IMHO.