TRA - Turners Automotive Group

[Basil]

Tina is back to charging $7 per hug. 

[Waltzing]

and its amazing considering this!!!  what a shocker and surely its stagflation or boarding on it...

https://www.nzherald.co.nz/business/call-for-government-to-help-auckland-as-unemployment-rises/4GHK7KPMRVHLDH4LXZLBJ5N3JY/

will there ever be a recovery?

Is this the high water mark for this stock if there is no recovery or is NO Recovery a sweet spot for future growth... High unemployment means fewer new cars brought...

[Basil]

RBNZ set to cut interest rates by 25 bps on 20 August.
Tina told me she's charging $8.50 per hug next year 

[winner (n)]

RBNZ set to cut interest rates by 25 bps on 20 August.
Tina told me she's charging $8.50 per hug next year 

Mike Hosking reckons 2.5% OCR early next year

He's a well connected guru

Media will get you your wish

[lorraina]

Friend of mine is buying a new MG hybrid,and was offered $5000 for his wife's Suzuki Swift as a trade in.
Turners at Wairakei Road are only a short drive from his house,therefore he went and offered it to them.
$7,500.He as full of praise for Turners professionalism and the fact they said he could put the car into one of their auctions.Cost $200 to groom it and most probably $800 commission.He decided to accept their cash offer which would be in his bank a/c overnight.
Excellent friendly helpful staff.

[Basil]

Turners annual meeting next Thursday. I am hoping to attend.   Should be a very happy vibe.
Looking forward to the trading update, (dealer to public sales up 9.7% YTD,  and will be on better margins than the dreadful winter last year too and also TRA market share gains on top of that), https://www.turners.co.nz/globalassets/terms-and-conditions/market-report-cars---July-2025.pdf
I can't think of a single thing to bark about lol  Looking forward to giving Todd and Aaron a pat on the back, they deserve it. 

[Red Baron]

I can't think of a single thing to bark about lol  Looking forward to giving Todd and Aaron a pat on the back, they deserve it. 

And een return, In 'zome other place' I read zhat Todd has promised zhere vill be a cardboard cut out of Tina in attendence, vhich you can hug.  You must be looking forward to zhat!

RB

[Mos]

Positive forward guidance in Turners ASM presentation great to see. Business momentum strong and finance earnings well placed to grow with increasing book and lower OCR.

Guidance
• The economy is still patchy and consumer confidence has declined since Liberation Day. Interest rates are still restrictive and unemployment is increasing.
• Despite these challenges we are still expecting a record first half performance, HY26 NPBT expected to be at least +10% ahead.
• Still on track to achieve our mid-term target of $65M NPBT in FY28 early.

https://www.nzx.com/announcements/457153

[Basil]

Very impressive !!

[Dolcile]

What other established NZ business is growing earnings at 10%??

My firm view is that with the OCR continuing to trend down,  it makes the 5.9% gross yield (and growing) very attractive when combined with the future growth prospects. 

Discl, topped up a few more this morning.

[lorraina]

Well no agm news from Basil.
I guess he is at home resting up after Tina danced his legs off boogie wooging...lol

[Left Field]

What other established NZ business is growing earnings at 10%??

FPH, IFT, ATM ..... for a start.

[Basil]

A very positive annual meeting indeed.  Presentation is here https://api.nzx.com/public/announcement/457153/attachment/450029/457153-450029.pdf
I can't recall the Turners team being so positive so early in the financial year.  Guidance for earnings growth of at least 10% in the first half at this point means they must be super confident of exceeding that, given their prior pattern of conservative forecasting.  Further, that's with the headwind of the $600K launch of the Tina Mk2 marketing campaign, restrictive interest rate settings and only a very short period of trading from their new Christchurch car yards.

Its clear from the presentation that they expect strong benefits to flow in the 2H from those factors and without the extra $600K marketing spend.

Those that attended or watched online would have seen an extremely rare phenomenon, never seen before at any annual meeting.  A Beagle with nothing to bark about so he purred like a contented cat lol   It was nice to thank the board and management for their sterling efforts over the years.  Another speaker at the end said it far more eloquently than I.

Snippets worth noting.
I asked Todd is his appointment to the board in any way signaled that he was starting to run out of gas as the CEO.  He assured attendees that even after 19 years with Turners he still had a full tank of gas and was really relishing his role with Turners.  Why would I leave when I love what I'm doing so much, or words to that effect.  So no worries there.

Tina is all locked up on a long term exclusive contract.  I asked for more colour around the nuances between the marketing campaigns of Tina Mk1 v Tina Mk2 and Greg Hedgepeth (might have spelled his name wrong) explained they had filmed 4 years worth of marketing before Tina left for Samoa and we had only seen the first of 9 television advertisements under the new Tina Mk2 campaign.  Watch this space... plenty more to come.

Turners is performing ahead of where even I thought it would.
Summary - An extremely well managed business continuing its well proven growth journey on very attractive metrics.  I couldn't be happier about how Turners is being managed.  Disc: Has been my #1 investment position for quite some time.

[Dolcile]

Well said Basil.

The 10% growth is really quite remarkable in the face of those headwinds you set out, plus in addition I think I heard Todd say they also incurred additional cost/inefficiency in moving from 1 to 3 locations in CHCH. Outstanding!

Imagine what happens when the economy is actually growing. 

[Basil]

Imagine what happens when the economy is actually growing. 

Indeed, exactly that very pleasant thought occupied a fair bit of my headspace after the meeting yesterday.  Interestingly the CFO Aaron Saunders vented a bit of frustration at the RBNZ and said he thought they had got the previous call really wrong, (the one before this weeks 25 bps reduction).  Also went on to note the cash rate was 1.75% in 2019 before Covid and that we definitely had a two speed economy and even the current rate after this weeks cut means we have a "restrictive" monetary policy setting, or words to that effect..

Its interesting to note that 2 of the committee members at the RBNZ voted for a 50 bps cut this week.  Therefore, it seems clear another cut in October and then again in late November is on the cards.  Every cut adds just over $1m per annum profit based on a previous discussion I have had with Todd.

This time next year the economy might finally be growing and Tina who is sick of being a cheap hussy and dishing out hugs for ~ $7 might finally be charging an appropriate price of $9-$10