TRA - Turners Automotive Group

[winner (n)]

They've made it crystal clear they're very happy with their investment in brand building with Tina.
That's great eh mate as it means you can look forward to heaps more of her amazing Radio and T.V. advertisements.  I know you secretly love them 

Like politicians / councils raving about economic benefits of spending zillions on events / new trains etc etc

Economic impact reports one of the big rorts of this world

[Basil]

Like politicians / councils raving about economic benefits of spending zillions on events / new trains etc etc

Economic impact reports one of the big rorts of this world

Turners have made it clear they believe Tina is a very valuable and integral part in them building market share.  With the greatest of respect mate I think they've made that point quite emphatically.
I think you're drawing a very long bow comparing their marketing with Government and local body initiatives.  I have some professional training with marketing, took an optional paper on it at Uni, and I understand very well the value of brand building using a bright and bubbly personality like Tammy for Briscoes or Tina with Turners.  Consistency of approach with the same personality is the key so the public identify with and link the brand with the bubbly personality.

I recall the CEO saying that almost everyone who rings up to sell a car asks to speak to Tina.
I think that speaks for itself mate, don't you?

[Left Field]

I always liked the quote from advertising guru David Ogilvy. "I know half my advertising spend is wasted.....trouble is I don't know which half."

[Perky]

Maybe the issue is Tina...likes cars, big ones, small ones, noisy ones

Whereas

Winner..likes returns, big ones (capital appreciation), small ones (dividends)
noisy ones (takeovers)


With Turners share price currently retreating Probably more chance of a big return at the races winner than at Turners...you seem to have a good eye for them...Where's Nest Egg running next? Surely a roughie place chance after its close run 4th on New Year's Day. Nest Eggs Mum is Run to the Bank...could be a sign?

[Waltzing]

Arnt second hand car values in the US dropping 15%...

[Perky]

So Tina is being handsomely rewarded no matter what the business result whereas Winner and other shareholders are not?

Selling more but making less?...Like the Whs.

Maybe this is a trend to watch in next company reporting season..good top line sales but much higher operating costs, lower margins less profit.

The roadmap to a $5 share valuations seemed to have hit a pothole.

I like Turners long term. Good management, growing market share, good inputed div, diversified but aligned income streams...clipping the tickets on cars, loan finance, insurance, property owner/developer

Discl. Don't currently hold but could buy some if an attractive entry price shows in next few months

Well done those who bought in around Covid lows ..under $2 was great buying.

[Hectorplains]

Arnt second hand car values in the US dropping 15%...

That's the NZ trend too - post Covid.

[winner (n)]

When they said at the half year announcement 'Based on our experience in the first half and early trading in H2 we expect FY23 NPBT to be at or slightly above last year's record result.' I took it as a profit downgrade

Market must have thought so as well as it did nothing to arrest the strong downtrend that started a year ago - $4.60 to $3.20 is a big drop

Just imagine what will happen to the share price if they  did the unthinkable and cut the dividend

[Waltzing]

cut DIV ...

whoops

 Still inflation seen slowing and US earning season coming up...

[Perky]

When they said at the half year announcement 'Based on our experience in the first half and early trading in H2 we expect FY23 NPBT to be at or slightly above last year's record result.' I took it as a profit downgrade

Market must have thought so as well as it did nothing to arrest the strong downtrend that started a year ago - $4.60 to $3.20 is a big drop

Just imagine what will happen to the share price if they  did the unthinkable and cut the dividend

That would bring out a big orange Detour ahead sign. Roadmap to under $3

I think you scary everyone to buy some more?

What about those insider fellas buying recently at prices 20% north of todays. Also no decks been built recently. What do they know or see?

Turners just being rerated like all risk assets.

Interest rates going up next month and I think inflation in nz will be very very sticky..hard to get rid of. Like tar on the nz road in summer.

Now you can leave your money in the bank and get 5.5% (more next month) no capital loss and get paid to wait patiently until you think market is finished re rating

Or you hold turners and risk some more short term capital loss but get a nice divvy maybe?

Turners be alright long term just hit some headwinds and soft tar on the road to $5.


I hope to buy some Turners later this year ...waiting to see where interest rates  peak

[Basil]

Headwinds in FY23 have been pretty strong.  Falling used vehicle prices means reduced margins and rising interest rates means lower finance book margins as loans previously issued at fixed interest rates are partially funded by floating loan facilities the cost of which has escalated at a record rate in FY23.
It hasn't been much fun holding in a downtrend, in fact its been very painful.

I think they're doing incredibly well in the face of such strong headwinds to be forecasting to match or slightly exceed last years record profit.
Forecasted dividends for FY23 are 23 cps fully imputed so that's 23 / 0.72 = 31.94 cps gross so at $3.19 TRA trade on a prospective gross yield of 10%.

I am going to continue to hold and trust management to steer the Turners ship safely through the potential recession that lies ahead.  There's always sunshine after rain (one of my late Mum's favorite sayings) and once we've navigated the challenges immediately apparent, they will be well positioned to continue their eps growth in the years ahead.  In the meantime there's that 10% gross yield, paid quarterly, to cheer shareholders up.  I am betting that based on around a 65-70% payout ratio, 23 cps is sustainable going forward.  There's no way I am going to sell a well managed company with a very sound growth strategy that feeds me 2.5% gross per quarter.  Dividend hounds love their regular feeds. 

Disc: Holding a modest stake for income.  Looking forward to a very nice divvy on 26 January.

[winner (n)]

The real deal TINA was used by Chrysler in acclaimed award winning marketing campaigns in 1990's to drive sales of Plymouth branded models ..... Voyager etc

Seems they weren't that successful as Plymouth brand appears to have slowly died and met its demise about 2000.

Hope our TINA ensures the longevity of Turners.

Plenty of TINA Plymouth ads on YouTube and this is an interesting article by an auto commentator.
https://automobible.com/tina-turner-plymouth/

Tina explains that most people who test drive a Plymouth Sundance decide to buy one. ,,So if you're not serious about a new car, you better stay away from this one."

A Plymouth Exec explained the rationale for using TINA - "There's no better way for a car company to show off it's great new body styles than having one of the finest bodies in show business as it's spokesperson, singer Tina Turner."

[winner (n)]

Sorry to digress about bring the real deal TINA in on the discussion só back to today things

It seems Ebbett we're going to expand into the South Island and put a huge car yard in Nelson but canned those plans a month or so ago citing the 'economic climate' for changingbtheir minds

But the real reason was TINA scared them off

[Basil]

No need to apologise mate, I found it quite interesting.  Didn't know the real deal Tina was involved with advertising cars.  The link you provided seems like quite a reserved way to advertise a car.  I like New Zealand Tina's more rambunctious style even if it grinds some other people's gears a bit.

The interesting thing with the funding of Turners finance book is while this has provided strong headwinds at present with significant net interest margin compression as floating rates have roared up, Turners are now pricing their vehicle finance at a much higher level to account for much higher funding costs so when interest rates decline there will be a decent tailwind to earnings in their finance book.  Maybe interest rates start their decline later this year?

[KW]

I am sure KW will give me a telling off for holding in a downtrend ...

I can retire now, as Chat GPT can do my job for me 

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