TRA - Turners Automotive Group

[winner (n)]

See Todd at the same virtual do as the STU man tomorrow

Hope his rave is a good one

[Basil]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/411163/394023.pdf

Excellent and very clearly articulated presentation.   Looks like this really is a resilient business, unlike some that claim they are.
 

[Basil]

Looking forward to Turners reporting next Tuesday 23 May.

Fundamentally this looks excellent value on a PE and gross yield in the low 9's.

Technically since part way through January 2023 this has been building a nice recovery and with a clear break up through the 100 day MA a little while back the chart looks very encouraging.

Trading cum a 7 cps fully imputed final dividend to be announced next week I see genuine value here in a highly resilient business and expect them to grow very nicely indeed in the years ahead as we come out the other side of this recession.  Knocking on the door of NZX5o inclusion too.
Disc: I added more this morning.

[winner (n)]

Turners slide from 2 years ago ...Roadmap to $5/share

They are one year ahead of achieving NPBT of $45m in F24 ...will do it this year and F24 will be close to $50m

Currently on a PE of just over 9 ........so even at $5 in a years time it will be on a PE of about 11 ....hardly demanding when you look at the profit numbers on the chart. After all Turners themselves are doing what they said they would be doing .....and the market is about to wake up from its slumber and do it's bit.

Rerating coming ..starting next week

Hope Todd updates his chart for next week ....might even hint at a Roadmap to $6/share

You cannot view this attachment.

[Onemootpoint]

Seems Turners have run out of stock, so to speak.
Less than 340 shares on offer if I am seeing thus correctly.

[Basil]

Excellent post Winner.  Gosh I didn't realise they were one year ahead of plan and about to report a record FY24's profit in FY23.  That really impressive considering the headwinds and challenges they've faced in the last year.  $45m before tax = $32.4m after tax = eps of 37.4 cps.
Put a bottom of the cycle PE of 12 on that and you get $4.49.  Think they were hoping for a 13 PE = $4.86.

Interesting to note their dividend policy is 60-70% of net profit after tax and 23cps = 61.5% of net profit close to the bottom of the scale.  Higher dividend next year with more eps growth ?

[Basil]

From the other place.  Very insightful post by none other than Todd Hunter himself.
I think its fabulous he engages with the investment community in this way

One of my goals for FY24 is to turn you into a TRA supporter Black Peter!

We have a very capable team of people here. Aaron Saunders (Group CFO) and I have worked together for 16 years...he started a couple of months after me at Turners Auctions in 2006. Aaron is exactly what you want in a CFO, asks the hard questions, can be pretty tough...but very very commercial. Greg Hedgepeth (ex BMW and Armstrong Motor Group) has done a super job of taking some initial momentum we created around the wholesale to retail transition from 2013-2017 and built from there. The growth he has achieved and the quality team he has built since running Auto is impressive. James Searle who runs our Insurance Division again a very experienced and super capable guy. Our business performance is very much a team effort, and I can assure you none of that is dependent on me. Mostly I am getting things out of the way or getting myself out of the way of a very talented and ambitious group of people who want to achieve and grow a business.

I think the board work very well with our management team as well. Despite a few comments on these threads they actually 1) really care about this business and 2) get involved "hands on" where they can add value. These are not a group of people who attend 11 meetings a year and an AGM, "hold management to account" and job done. A good example of this is "Tina" from Turners...John Roberts, Grant Baker and 3 of us from management were involved in a small project team who came up with the strategy and execution. No ad agency involved although we did use one of John's old ad mates Kim Thorpe to come up with the concept. A great example of how management and the board worked together on delivering a critical piece of work. We view the line between management and the board as a flexible line and directors are welcomed into the business to contribute where they can add value or they have an interest to understand. It works well from my perspective as a CEO and as a shareholder.

On the Roadmap to $5 slide...yes this may haunt me! We got a bit of flack about the title for the slide, but plenty of kudos from the analysts and insto investors for actually calling out a target and the building blocks for how we would achieve it. I am still pleased we gave the insight (and used the title) and happy to be judged on our performance against what we said we would do.

Please don't waste any time on that first goal you mentioned Todd.  You can lead a horse to water but you can't make it drink.

[Basil]

Short to medium term I think the chances of TRA getting NZX50 inclusion are looking better with each passing day.  TRA looking like a genuine chance for inclusion at the September 2023 quarter NZX50 index review in my opinion.  Alos a slim chance at the June 2023 index review.

[BlackPeter]

Please don't waste any time on that first goal you mentioned Todd.  You can lead a horse to water but you can't make it drink.

Pretty stupid comment, isn't it?

Look, we know that you like to bark when you think stocks go up and you like to bark bark when stocks go down, and we know that you bark in case you were right, not so much when you were wrong.

No need though, to start one of your personal vendettas as well in this forum.

Grow up.

[Basil]

Chill out mate.  Was just having a bit of lite hearted fun at your expense. 

Nice to see Turners making a good clean break up through the 200 day moving average.
Really looking forward to them reporting on Tuesday.
Hoping for $45m and maybe a surprise 8 cps fully imputed final dividend to celebrate their record result.

Amazing they are about to report a record ever result in really tough economic times all the while facing significant headwinds with funding their finance book.... quite remarkable.  Makes me wonder how much they will make in better times when interest rates decline and their loan book funding becomes a tailwind.
(Funding previous fixed rate vehicle loans written at high rates, with much cheaper floating rate bank debt).  I think FY25 could be a real cracker !

[Whome]

Nice to see Turners making a good clean break up through the 200 day moving average.
Really looking forward to them reporting on Tuesday.
Hoping for $45m and maybe a surprise 8 cps fully imputed final dividend to celebrate their record result.

Amazing they are about to report a record ever result in really tough economic times all the while facing significant headwinds with funding their finance book....remarkable really.

Oh Basil, are you attempting to predict the future for Turners !

[Basil]

Oh Basil, are you attempting to predict the future for TRA!

Guilty as charged mate.  I am a recidivist offender trying to study companies past form in an effort to beat the market.  Seem to be doing okay at it   

[Waltzing]

stunning  pastels...

news of the no recession should help.. if there is blame the Olympic minister..

[Left Field]

Holders be happy.

https://www.nzx.com/announcements/411835

Key Financial Highlights:
• Revenue $389.6M +13%
• EBIT $52.2M up 9%
• NPBT $45.5M +6%
• NPAT $32.6M +4%
• Full year dividend 23.0 cps (flat)
• Earnings per share 37.7cps +4%

Key Business Highlights:

• Final FY23 dividend declared at 7.0 cps bringing FY23 dividend to 23.0 cps, matching last year and equating to a gross yield of 8.5% per annum based on the current share price of $3.75.
• Record earnings in Auto Retail and Insurance divisions more than offset Finance headwinds.
• Market share gains and margin improvement in Turner's largest division, Auto Retail led to a 28% increase in profit, following 26% in FY22.

[winner (n)]

Anything worthwhile in the presentation pack

The first page turned me off and didn't bother go any further