TRA - Turners Automotive Group

[lorraina]

The NZ motor industry employs a very large number of people,a great number of whom are "car bugs" ,who enjoy motor sport.
In fact Turners' chairman Grant Baker is such a person.
These people who work in the sector, often trade with Turners,buying or selling to them,or just recommending them to people who want to buy/sell a car.
 All  NZ see Turners helping Liam Lawson,and are proud to deal with Turners because of it.. 

[Buzz]

From Tod 30/8 at another place (my emphasis)

"We are very excited to see Liam fulfil his lifelong goal of racing in F1. This guy is a winner. Comes from a very humble background and is very understated, but has an absolute drive and steel to achieve. We have continued to support Liam since his F4 days more recently in a pretty minor way financially.

Tina and Liam did some co-lab earlier this year... https://www.tiktok.com/@turnerscarsn...92571940457730

Unsurprisingly we are giving this a bit more airtime this week and next with Liam racing in Italy at Monza this weekend. We are very excited about his prospects (touch wood) given his strong performance last weekend in the Netherlands. Go Liam!"

[Waltzing]

warning... when charts go vertical .....

[Basil]

warning... when charts go vertical .....

Turners was $4.60 at the start of 2022 and closed out the year at around the $3.20 level, a loss of ~ 30%.  I think it's easy to make the case the market simply got this wrong last year and didn't used to understand or didn't believe in the resiliency of their business model in tougher economic times.

I think their resilience is plain for all to see now and we will revert to the previous price pretty soon + whatever else for growth in eps since then, a better outlook going forward given we're part way through tougher times now, plus of course probable NZX50 index inclusion.  I'm not sure how others feel but I'm very impressed with how well the business model is performing despite very strong headwinds from cost of finance and cost of living pressures. 

Thanks guys, appreciate your thoughts on Liam's sponsorship. 

[winner (n)]

Npbt 25m plus in first half of F24 .....add H223 of 22.1m you get about 48m for last 12 month period

You'd think H224 is better than the H223 ...growth company eh .......so it would be disappointing if they don't signal FY24 npbt of about $50m when do announce things in November

Good eh

[Basil]

Yeap, looking really good to join the 50 club in more than one way !
$50m before tax and NZX50.

[Waltzing]

Well yes .... BUT!!!

the OCR is higher now and unless they increase the DIV...

but perhaps not over valued in the longer term...

[Basil]

I've been working on the basis that they make 40 cps this year so at $4.25 it's on a FY24 PE of 10.6.

But I think there's a good chance as Winner has suggested that when they report half year results late next month, they upgrade guidance to $50m before tax this year, a year or two earlier than originally forecast.

If so and assuming full tax $50m before tax is $36m after tax and on the recently increased number of shares after the most recent dividend paid, 87.366m shares on issue that's 41.2 cps (9.3% up on last year's 37.7 cps).  At the midpoint of their dividend guidance range of 60-70%, 65% of that is 26.78 cps so the chances of an upgrade to dividend guidance, (current indication is 24 cps) also cannot be overlooked.

$4.25 / 0.412 = FY24 PE of only 10.3.  One might like to ponder what the forward PE is on FY26's earnings when hopefully they start to get tailwinds from a declining interest rate cycle and better economic times.

Forward PE of only 10.3 seems like incredibly good value to me for a company that's grown eps at an average compound rate of 7% in the last decade.  I'd normally say a company like that is very good value at a forward PE of 14.5 with interest rates where they currently sit or 15.5 if the 10 year Govt stock rate declines to 4% in due course.

[Waltzing]

The ANATLANDERS are going to build more roads and 100,000 budding  ANATLANDERS will need to move about and the most likely shareholders that will benefit will be heard chanting  "Cars CARS CARS!"

The new ANATLANDERS to be will have left their LADAS, VOX BUGS, motor bikes and Dog Teams behind....

its obvious that any stock that sells cars... any kind of old bangers could be a WINNER!!!

[winner (n)]

6 weeks to index inclusion

Exciting

[winner (n)]

I keep hoping that all the bad luck and ill fortune that Grant Baker is having over at MEE doesn't spread to Turners

[lorraina]

With Todd and Aaron running the business, together with a strong board you fears are unwarranted.
Every successful business man makes a mistake,otherwise they are not trying hard enough,but I do wonder how he got the honey deal so wrong.

[Basil]

No question the C Suite including Greg Hedgepth are doing a fabulous job managing the business, but credit must be given to the creation of the Tina marketing personality that's been transformational in terms of gaining market share, (doubled in the last 5 years).  Credit must be given to board member John Roberts (ex Saatchi and Saatchi CEO) and his friend Kim Thorpe (previously no less than Saatchi and Saatchi worldwide creative director).

Moral of the story, it pays to have friends in high places!  You can read all about how this truly brilliant campaign came about on page 26 of the 2023 annual report here http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/413843/397411.pdf

I really don't think the market has woken up to the ongoing growth "Tina" will confer in the years ahead.  I believe her highly relatable and positive personality will be hugely successful for Turners over the long term in the same way Tammy has been for Briscoes.  I have always believed this right from the start and strongly encouraged Todd Hunter to get our star locked in on a long-term contract so she can become the face of the company going forward.

[Waltzing]

With SNAP ON at a P/E of  12 why are NZ stocks like TRA so cheap?

Sir B has highlighted the P/E on this stock before and could it be that the NZX under the last government has been hammered and the NZ market is a BUY.

Notice that for the last 2 terms nothing was done to expand the local capital markets...

[Hectorplains]

I really don't think the market has woken up to the ongoing growth "Tina" will confer in the years ahead.  I believe her highly relatable and positive personality will be hugely successful for Turners over the long term in the same way Tammy has been for Briscoes.  I have always believed this right from the start and strongly encouraged Todd Hunter to get our star locked in on a long-term contract so she can become the face of the company going forward.

I don't think it's likely that the multi-talented Sieni Leo'o Olo's ambitions are to be pigeon-holed into a advertisement character

The metrics of her impact are impressive thou' -   the company say that the success of the $300,000 ad campaign meant that the cost of it was paid off within one month!.