TRA - Turners Automotive Group

[Waltzing]

if the US dollar strengthen's then sure OIL stays up but the so called one off costs of TF's are statistical as the impact rolls off the data and is smoothed over time but someone still wears the cost every time!! Its just the stats dont show it as the effects on the economy may be smoothed by other factors... BUT it still there.. its a GST rate of 10 percent or MORE that may or may not be passed on to the customers and cant be deducted back by the companies hit by it.

US debt would have to come down a lot before it hits the NZ dollar?

Ok that means the RESERVED BANK wont cut until it far to late ... after it kick the economy in the guts ... At the bottom of the world we add up numbers slower than where its warmer...

[Basil]

Forsyth Barr's forecasts from 27 May 2025 after the FY25 result.  Price target $7.30, subsequently updated to $7.40
FY26 EPS 48.0 DPS 32.5 cps  Forward PE at $6.88 14.3 Gross Yield 6.6%
FY27 EPS 52.9 DPS 36.0 Forward + 1 PE 13.0 Gross Yield 7.3%
FY28 EPS 57.4 DPS 39.5 Forward + 2 PE 12.0 Gross Yield 8.0%

After attending the annual meeting, reviewing the presentation materials and discussing things with management afterwards I am optimistic that TRA are going to beat those forecasts.

P.S. Todd mentioned in the annual meeting they'd recently invested a total of ~ $36m on their 3 new car yards in Christchurch.  As these were new, finished and available for first use after 22 May 2025, it would appear they are eligible for the new 20% investment boost tax deduction. https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-expenses/new-assets---investment-boost  At a rough guess, (assuming approx. 60% the cost of each site is for the commercial buildings), my estimate is that could reduce their tax bill such that their after tax income is increased by ~ $1.2m, or approx 1.3 cps in FY26.    $1.2m should cover most of the filming costs, (for the next 4 years worth of advertisements they have created) and the marketing launch costs of the new Tina Mk2 marketing campaign.  How cool is that !

[Greekwatchdog]

For Bars latest, 22nd Aug 25

Turners Automotive (TRA) used its 2025 ASM to underline confidence in continuing earnings growth despite ongoing consumer weakness. Management is guiding to at least +10% NPBT growth in 1H26, consistent with our 1H26 +11.7% growth forecast. Medium-term earnings growth will be supported by an ambitious growth pipeline, particularly through Auto Retail network expansion, as well as the scaling of Turners Servicing and Repairs (following its rebrand from MyAutoShop), while growing and maintaining credit discipline in Finance and margin control in Insurance. While TRA remains on track to deliver its NZ$65m FY28 NPBT goal ahead of schedule, this is already factored into our forecasts (FY27 NPBT of NZ$67.9m). We leave our earnings estimates unchanged and maintain our NZ$7.55 12-month target price. TRA is trading at ~14x 12-month forward PE, representing a fair premium to its long-run average of ~10x given its track record of execution, through-cycle growth, and solid forward earnings visibility. We retain our NEUTRAL rating.

H26 guidance in line, demand expected to improve in 2H26
TRA expects 1H26 NPBT growth of at least +10%, in line with our forecast of +11.7% in 1H26. The outlook reflects ongoing recovery in Auto Retail margins from a very weak 1H25 period, Finance book growth, and disciplined Insurance and Credit earnings. Despite consumer confidence remaining subdued, TRA's diversified model continues to provide resilience. TRA called out an improving outlook, stating it 'expects 2H26 to deliver stronger vehicle margins and volumes as overall demand improves'. Our web-scraper data suggests YTD unit sales are broadly flat on last year, while average selling prices are modestly ahead.

Expanding Auto Retail footprint and brand momentum
TRA's site network is expanding with several new Christchurch and regional sites already completed in FY26, alongside upcoming openings in Manukau and Tauranga. Management expects incremental PBT contribution of around +NZ$3.5m from the committed FY26–FY27 branch pipeline. TRA now owns 17 sites at a cost value of NZ$129m, funded by ~NZ$100m of borrowings. Competing dealer numbers continue to fall across NZ, reflecting the challenging environment and TRA's competitive scale. At the same time, new 'Tina from Turners' campaigns are driving engagement and reinforcing TRA's positioning as NZ's leading used-car retailer.

Finance momentum and diversified earnings
TRA's Finance receivables book grew +5% in the first four months of FY26, tracking towards our expectation of +12% growth for the full year. Finance arrears remain substantially below industry averages, with June 2025 arrears at 2.6% versus the Centrix Auto industry average of 5.4%. TRA continues to gain dealer and broker market share in Insurance, with outsourced comprehensive premiums (underwritten by Suncorp NZ) increasing +25% in FY25. Risk-based pricing discipline and expanding digital distribution are delivering promising outcomes. Credit Management continues to benefit from rising debt-referral volumes.

[Basil]

https://api.nzx.com/public/announcement/457377/attachment/450362/457377-450362.pdf

Nothing new in here that I can see that wasn't shared at the annual meeting but for whatever reason, Turners chose to release this announcement, marked price sensitive.   Maybe the board and management who combined own circa 30% of Turners are sick of seeing Tina giving away hugs for under $7 each lol

[Dolcile]

P.S. Todd mentioned in the annual meeting they'd recently invested a total of ~ $36m on their 3 new car yards in Christchurch.  As these were new, finished and available for first use after 22 May 2025, it would appear they are eligible for the new 20% investment boost tax deduction. https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-expenses/new-assets---investment-boost  At a rough guess, (assuming approx. 60% the cost of each site is for the commercial buildings), my estimate is that could reduce their tax bill such that their after tax income is increased by ~ $1.2m, or approx 1.3 cps in FY26.    $1.2m should cover most of the filming costs, (for the next 4 years worth of advertisements they have created) and the marketing launch costs of the new Tina Mk2 marketing campaign.  How cool is that !

Great point on the investment boost, Basil. I'm surprised it wasn't mentioned at the AGM or in the update.  Makes me worry that perhaps they aren't eligible. 

[Dolcile]

I'd just like to point out that CMO is trading at 13x FY25 profit, with no future guidance.  Whereas, Turners is trading at 13.5x forecast FY28 earnings (which are expected to be reached early).

Personally I think Turners deserves are higher multiple based on track record and recessionary resilience.

[Basil]

Great point on the investment boost, Basil. I'm surprised it wasn't mentioned at the AGM or in the update.  Makes me worry that perhaps they aren't eligible. 

When I get back to the office I'll flick Todd an email.

[Dolcile]

Legend, thanks Basil.

[Basil]

Todd was very gracious in responding quickly. He advised that most of the cost is in the land.  2 of the 3 new sites are eligible.  Tax advantage should cover most of the $600K cost of launching the new Tina Mk2 campaign.  As posted earlier, there are 9 different advertisements that have been created, only one of which we have seen to date in various guises of 90, 60 and 30 second configurations.

They expect this campaign to be just as enduring as the last one and last about 4 years so that's a lot of marketing Intellectual property that's been created, sitting in the "intellectual property bank" to be rolled out in due course.  Very happy holder.

[Dolcile]

Thanks Basil - that's great intel.

[Left Field]

.... As posted earlier, there are 9 different advertisements that have been created, only one of which we have seen to date in various guises of 90, 60 and 30 second configurations.

They expect this campaign to be just as enduring as the last one and last about 4 years so that's a lot of marketing Intellectual property that's been created, sitting in the "intellectual property bank" to be rolled out in due course.  Very happy holder.

And not without a little controversy to spice things up..... this ad perhaps not so 'enduring.'

Media Insider: Tina from Turners ad - Advertising Standards Authority upholds complaint about car performing burnout......

https://www.nzherald.co.nz/business/media-insider/media-insider-tina-from-turners-ad-advertising-standards-authority-upholds-complaint-about-car-performing-burnout/UL4R5QWT45BHFPZBCONOKXSE3E/

Just a small pothole for Turners to navigate........ no big deal.

[winner (n)]

that tina ad on the radio advertising tractors and machinery is awful

suppose that's why it's so successful lol

[Basil]

I prefer the original Tina advertisements, (and I know I'm not alone from discussions with other attendees after the annual meeting).  They clearly articulated, in a very creative way, concerns vendors may have that are pertinent to selling privately.  (Recall the old couple driving off for a test drive in a Holden and not coming back and in another advertisement, the creepy looking guy looking in your window because he now knew where the seller lived).

Those were great advertisements.  I'm not so sure about the new series but there's plenty more content to come, (including the use of an A.I. dog, easier to control than a real dog Todd quipped to me after the meeting and he's not wrong), so its probably too early to make a call on whether Tina Mk1 is better than Tina Mk2. 

[Turkey]

that tina ad on the radio advertising tractors and machinery is awful

suppose that's why it's so successful lol

Yeah this is the worst ad...hurts my ears she high pitched squealing like a pig.
She might be selling tractors and diggers...but the engines aren't on...know need to shout

[Basil]

Used car stat's for August are out.  Another strong month with public to dealer sales up 11.15% and dealer to public sales up 8.42% compared to August last year.  https://www.turners.co.nz/globalassets/terms-and-conditions/market-report-cars---August-2025.pdf
These are great transaction numbers considering the woeful state of the economy.