TRA - Turners Automotive Group

[winner (n)]

From Turners website;
Turners Auto Retail Division is NZ's largest used vehicle network
and operates across 3 key areas: Used Cars; Used Trucks & Machinery; and Damaged and End of Life Vehicles. With 30 branches nationwide and over 500 members of our team, we take pride in the contribution that we've been making to keep NZ moving for over 50 years.

Thanks

So 30 now ...said 33 in 2019 Annual report

Beside new ones must have closed / consolidated some sites

[Basil]

31 with a range of new committed site's and opportunities currently under consideration, see page 23
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/422080/407740.pdf

[lorraina]

Thanks

So 30 now ...said 33 in 2019 Annual report

Beside new ones must have closed / consolidated some sites

They mix you up with cars,trucks and machinery,end of life vehicles,and now even two general goods..lol
Cars 21.

[BlackPeter]

Thanks

So 30 now ...said 33 in 2019 Annual report

Beside new ones must have closed / consolidated some sites

I suspect their might be a difference between branch and site. Take Christchurch - its one branch, but I understand they want to develop it into three sites. Same sitaution probably in other towns as well.

Lets just assume they have currently (as they said) 30 branches and more sites than they can count ; Its unlkely that the number of sites has been reduced since 2019 (at least I remember only new sites opening).

[Jay]

Two in Auckland closed/ moved
The Penrose one moved somewhere, the one at Mt Wellington closed/merged with another from memory - was an ex Buy Right yard

[winner (n)]

FY19 seems to be the base Turners use to measure progress ...so here goes ...March 19 to Sept 23

Market Share up from 4.9% to 9.1% ......UP 86%

Auto Retail Division sales up from 225m to 304m .....UP 35%

Auto Retail Division profit up from 18.3m to 26.8m ... UP 46% or 7%pa

Good to see profit margin increasing ...but seems to say market share not an indicator of overall division profit growth

But then I have no idea how they calculate market share (prob volume sales) and obviously the financials of Auto Retail involve more than just selling cars

Thought Tina would have driven higher sales ..maybe she got to try harder

[Basil]

Just a few notes I scribbled down from last Friday's retail investors Q & A zoom call.
Not intended to be a full report on the call, (best if you tune in yourself to these events which Todd and Aaron have kindly undertaken to continue after future reporting periods).

1. I asked, Is our rock star a happy camper and a committed vital team member with Turners over the medium to long term.
A Long story short, Yes a very happy camper.  recently been doing some work with Liam down at Hampton Downs.  Todd reiterated the story of how the campaign came about with the ex global creative director of Saatchi and Saatchi a key driver of this but it was a team effort, (see page 26 of the annual report)
 
2. 40 bps NIM margin expansion in 2H FY24 signaled in the presentation so I asked if we might see a similar expansion in 1H and 2H FY25?
A. The book reprices every month as older lower interest rate loans are gradually repaid, and new higher rate loans are issued. The average loan duration is 27 months and the ledger will be fully repriced by Sept 2025. We expect NIM expansion of about 30 bps in both 1H and 2H FY25 irrespective of the timing of future OCR reductions.

3. Funding cost reductions in the future when the OCR reductions start to occur.  I asked how this plays out given some of their book is fixed and some floating.
A. We have $240m fixed rate funding and $180m unhedged.  There is a further natural hedge of about $60m with funds invested in the insurance division so the net unhedged is about $120m.  A 1% cut in the OCR will accordingly lower our funding costs by $1.2m.

4. Car subscriptions thing how's that going.
A. Ticking along okay.  About 260 car subs at this point.  Has a seasonal element to it and tracks up over 300 over the summer months.  Not a material contributor to profitability but they will continue with it.

Index inclusion was also mentioned by Todd and they are looking forward to confirmation of that, (I expect that tomorrow morning our time), as vindication for the years of hard work by the whole team.

Comment - I think morale and team engagement is very high across the business and we are very well positioned going forward.

[seaweed]

Just a few notes I scribbled down from last Friday's retail investors Q & A zoom call.
Not intended to be a full report on the call, (best if you tune in yourself to these events which Todd and Aaron have kindly undertaken to continue after future reporting periods).

1. I asked, Is our rock star a happy camper and a committed vital team member with Turners over the medium to long term.
A Long story short, Yes a very happy camper.  recently been doing some work with Liam down at Hampton Downs.  Todd reiterated the story of how the campaign came about with the ex global creative director of Saatchi and Saatchi a key driver of this but it was a team effort, (see page 26 of the annual report)
 
2. 40 bps NIM margin expansion in 2H FY24 signaled in the presentation so I asked if we might see a similar expansion in 1H and 2H FY25?
A. The book reprices every month as older lower interest rate loans are gradually repaid, and new higher rate loans are issued. The average loan duration is 27 months and the ledger will be fully repriced by Sept 2025. We expect NIM expansion of about 30 bps in both 1H and 2H FY25 irrespective of the timing of future OCR reductions.

3. Funding cost reductions in the future when the OCR reductions start to occur.  I asked how this plays out given some of their book is fixed and some floating.
A. We have $240m fixed rate funding and $180m unhedged.  There is a further natural hedge of about $60m with funds invested in the insurance division so the net unhedged is about $120m.  A 1% cut in the OCR will accordingly lower our funding costs by $1.2m.

4. Car subscriptions thing how's that going.
A. Ticking along okay.  About 260 car subs at this point.  Has a seasonal element to it and tracks up over 300 over the summer months.  Not a material contributor to profitability but they will continue with it.

Index inclusion was also mentioned by Todd and they are looking forward to confirmation of that, (I expect that tomorrow morning our time), as vindication for the years of hard work by the whole team.

Comment - I think morale and team engagement is very high across the business and we are very well positioned going forward.

Thanks for all your input Basil. I also got a very good positive vibe from last Fridays online question and answer conference call. It will be a very interesting week from 4 Dec through to close of market on 15 Dec.

[Ricky Bobby]

So what's ur pick for the share price over next few Basil? Over $5?... going to grab anymore today before it all kicks off?!

[Basil]

Second question, maybe.
The other one is very hard to answer, and I am reluctant to go on the record because, frankly, I got the HLG index inclusion price very wrong, (despite doing very handsomely from that).

I made a lengthy post with some musings about the company's intrinsic value see post #553 and I am very much focused on seeing how the shares play out in the future relative to my long-term price target in the late $6's.  We could see this company paying annual fully imputed dividends in the very late 30's cps by the end of this decade and frankly as a semi-retired investor, (retired by then), that's a very attractive growth profile in dividends going forward.

I you don't mind I will give you something of a "politician's" type answer. My gut feel is its somewhere over $5 but who knows for sure.

[Ricky Bobby]

Haha FairPlay! Urv nailed this one so far, keep it up!

[Basil]

Thanks Seaweed and Ricky, I appreciate the encouragement.

Official NZX50 index inclusion confirmation just released by the NZX  (Also being added to the mid cap index).
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/422832/408802.pdf

[LoungeLizard]

Yep, we're in. Congrats to all that picked it and backed up the call with their money. Let's see where the SP goes (rubs hands with glee).

[Onemootpoint]

There has been a lot of Fanta discussion on TRA stock that has been very useful.

Thanks to all - especially Basil.

[Waltzing]

FANTA ....

OMP ... great acronym

is that a new one?