TRA - Turners Automotive Group

[Hectorplains]

I assume you did build in some ongoing growth, did you? Without growth would the PE of 16 look a bit dear.

But then, I see they had over the last 10 years an annual earnings CAGR of 12.9 (no idea though, how much from selling used bangers and how much from financing them) - and analysts give them for the next 3 years an ongoing earnings CAGR of 6.7 (which is good, but slower than the last 10 years);

Given that your target SP looks pretty conservative.

For what its worth - if I take the growth into consideration (and sure, things may change), I'd see them at this stage fairly valued around $6.50.

Goes XD on 7th January. Yield of 5%.

[Basil]

I did a valuation as a group a while back and came up with intrinsic value pretty close to what you suggested BP.
Might take a while to get there though

Fortunately, we are being paid well to be patient and with consensus of 27 cps fully imputed next year that's 37.5 cps gross = 8.26% gross based on a theoretical ex divvy price of $4.54.  Can be boosted to 8.26 / 0.98 = 8.43% gross with the 2% DRIP discount and that's only next year's yield (FY25).  Turners are very proud of the fact that over the last several years they have increased the dividend by 40%.  If they do that again over the next 4 years they'll be paying ~ 38 cps by FY29.

[Waltzing]

If that is the case is this one of the only stocks on the NZX that might be a HOLD....

[lorraina]

I have recently been to two motor sport movies.
Jackie Stewart .
Ferrari.
Both were excellent.
Behind the scenes
https://www.youtube.com/watch?v=MuH7G4N-dYU&pp=ygUNZmVycmFyaSBtb3ZpZQ%3D%3D

[lorraina]

NZ Used Car Sales.
December sales were unusually high at 12,806 and the second highest month in 21 months.
Good news for both Turners and 2CC.
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/zzk0KqrQbREEyauBkllAxA/BFgy5zZ4P4YvjEwYnYsz7Q

[winner (n)]

 Jeez, 10% share at least is 1,280 sales for Turners ...plus all the add ons from this fully integrated outfit

Massive December .....Tina is amazing

If Todd doesn't mention at next update that FY24 npat going to be in excess of $50m then he's either playing games or telling lies

[kiwi2007]

From the UK: Not sure whether it applies here though?

    Average electric car insurance costs rose 72 per cent in the year to September, compared with 29 per cent for petrol and diesel models, according to Confused.com. The price comparison site notes that premiums for Tesla Model 3s, the most quoted EV on the site, rose more than two-thirds in the past two years.

EV claims are typically 25 per cent higher than combustion equivalents and take 14 per cent longer for repairs, according to research from Thatcham.

A combination of high costs and volatile outcomes means many EVs are simply being written off for damage that traditional vehicles would survive.

As higher insurance makes EVs less attractive, adoption rates will adjust accordingly.

Hertz to sell one third of it's EV's — customers don't want them and they cost too much to fix

https://joannenova.com.au/2024/01/hertz-to-sell-one-third-of-its-evs-customers-dont-want-them-and-they-cost-too-much-to-fix/

[Waltzing]

Warning this post is frivolous
 ...

  Gosh ...   EV's fleet sold off?

https://www.youtube.com/watch?v=4Wu0WoQcO48

this day in space ...

petrol engine junk here to stay ...  not really good ... bikes after all and Horses?

[Basil]

Really enjoying the weather providing some fabulous summer conditions for boating.  Good to be on holiday giving my brain a rest.  This came on the radio yesterday while anchored up enjoying some drinks in the late afternoon sun.  Cranked the stereo system right up and thought to myself...Turners really is simply the best.  Glad I kept plenty after index inclusion.  https://www.youtube.com/watch?v=GC5E8ie2pdM
Happy holidays folks.

[Basil]

Bought back some more today. 1 month to the day since index inclusion and taking into account the 6 cent divvy its shed since then it's only down 2 cents !

$6 by mid - late next year is on the cards I reckon

[Fiordland Moose]

Bought back some more today. 1 month to the day since index inclusion and taking into account the 6 cent divvy its shed since then it's only down 2 cents !

$6 by mid - late next year is on the cards I reckon

lol let's first hit the magical $5/shr before contemplating future milestones

one thing I reflect on are the short term unknowns/impacts that the regulatory changes will throw up. article below is on new car sales - not used - but shows the huge surge in EV sales and dive in ICE. There is a brief mention of used imported cars but that only tells a part of the story given TRA's position in securing domestic stock.  But it's still worthy of reflecting on. I did a bit of work on the regulatory sector changes but have already forgotten it all but I think its fair to assume there could be a few months of turbulence which could feature into TRA's Q3 and Q4 (and hopefully balance each other out)

https://www.interest.co.nz/economy/125835/december-sales-new-cars-traditional-internal-combustion-engines-tails-sharply

TRA doesn't have the same position in EV's that 2CC has who I'd expect in the very short term to benefit the most from. However what comes next I'd imagine could be the inverse all things equal (though I imagine 2cc will quickly look to pivot its purchasing mix)

For my holding I wouldn't bat an eyelid if TRA missed a bit on expectations due to regulatory impact as I can imagine a surge in people that had been holding off purchasing a used UTE/SUV until this year. But as I say I reflect on it in terms of deploying/reinvesting additional capital & timing - not impossible to see a little dip if punters panic should expectations not be met given a period of regulatory change. TRA have certainly aired a lot of confidence in trading and outlook so who knows

[Basil]

TRA source about 90% of their stock here that's already registered so I foresee little impact on their business from recent incentive scheme changes for new and imported vehicles.

2CC were doing close to 50% of their business with incentive based product so are likely to see a strong Q3 and weaker Q4 until they pivot their model in FY25.

[lorraina]

Quick reaction by one used car firm;


https://mailchi.mp/24d681bcceaa/black-friday-sale-enjoy-300-off-all-cars-6160205?e=f3df0e38d4

[Basil]

Waltzing sent me this.  https://www.nzherald.co.nz/business/1000year-to-drive-your-ev-road-user-charges-for-electric-vehicles-from-april-1-transport-minister-simeon-brown-confirms/FYK45LJ3ZJD6LOJONCPO47AOHI/

So there we have it, the Govt's decision on road user charges for new energy vehicles.  Road user charges of $76 per 1,000 km's for EV's and $53 per 1,000 km's for PHEV's.  The RUC rate for PHEV's looks expensive to me...some of which only have a very short range on electric power.
Without up front incentives, and with much higher initial capital cost and now road user charges, I predict we will see a huge swing back to petrol and diesel powered vehicles.

P S Reported elsewhere, this is the first step towards all vehicles being subjected to road user charges !

[BlackPeter]

Waltzing sent me this.  https://www.nzherald.co.nz/business/1000year-to-drive-your-ev-road-user-charges-for-electric-vehicles-from-april-1-transport-minister-simeon-brown-confirms/FYK45LJ3ZJD6LOJONCPO47AOHI/

So there we have it, the Govt's decision on road user charges for new energy vehicles.  Road user charges of $76 per 1,000 km's for EV's and $53 per 1,000 km's for PHEV's.  The RUC rate for PHEV's looks expensive to me...some of which only have a very short range on electric power.
Without up front incentives, and with much higher initial capital cost and now road user charges, I predict we will see a huge swing back to petrol and diesel powered vehicles.

P S Reported elsewhere, this is the first step towards all vehicles being subjected to road user charges !

Makes a lot of sense. If they use the road, they should as well pay for it. It was absolutly unfair that drivers of old cars with combustion engine had to subsidize rich Tesla drivers ...

Might be as well sensible to subject all vehicles to RUC, instead of charging RUC to some and fuel tax to others. Of course only, if we take at the same time the fuel tax off from petrol. The current system is inconsistent and unfair.

Perhaps a saviour for ERD as well ...