TRA - Turners Automotive Group

[Basil]

$1.5m tailwind from weather events in 2H FY23 so $48m+ in FY24 compared to $44m normalized last year is solid growth, especially in the context of a very weak economy.

It's that time of year, just about end of their financial year now, where we must be thinking ahead to FY25 and especially FY26 and FY27 to vision cast where the share price might go in the years ahead.

I reckon they will go close to $50m but let's say $49m for FY24.  Strip out the weather event tailwind last year of $1.5m that's $49m v $44m normalized,
So, 11% profit growth despite both a very weak economy and very strong non-recurring headwinds with their finance book this year.  That's very impressive.

Hmmm...what if the economy starts to improve a bit in FY25 and especially as we go into FY26 and FY27 and falling interest rates revert to creating a finance division tailwind?  Add in branch expansion and ongoing market share gains from their brilliant marketing and I think Turners has a very bright future indeed.

Looking ahead to FY25 divvies, I think 27 cps is quite plausible and that's 37.5 cps incl imputation credits which provides an ~ 8% gross yield while we enjoy excellent ongoing growth in the years ahead.     Very attractive.

P.S. Many know that some of the directors have a huge stake in this, but many may not be aware that Todd Hunter has nearly 800,000 shares as well held from memory, in a family trust.  Between them all, they have plenty of skin in the game.

[Hectorplains]

Martin Berry flicked 95k shares for $450+.  That was nearly 20% of his holding.  TRA "Insiders" have now sold NZ$3.5m worth of stock in the last 12 months. 

[Basil]

Grant Baker sold $2m worth to invest in support another company, others will remember which one, sorry I forget, but it desperately needed that support.

Martin Berry, (Singapore based) as we know has resigned from the board due to other work commitments so it's understandable if he winds down his level of shareholding over time.

This doesn't give me any cause for concern.

[daveypnz]

The chart looks awfully similar to the way it did from May to October last year.

[Waltzing]

Coming to a car sales yard near you ....

https://www.cnbc.com/2024/03/22/byd-seagull-ev-puts-global-auto-execs-politicians-on-edge.html

Buffet investmented in one of these companies a while back.

TRA price in a consolidation period.

[Basil]

https://autotalk.co.nz/new-boss-for-oxford-finance/

[Waltzing]

If the OCR is cut back to 3 percent in the next 24 months this share will surely be repriced to reflect term  yields...

7 dollars in 36 months..?

sell side looks very light.

[Basil]

A LOT to like about TRA which remains my single biggest stock position on the NZX, (bigger positions in BRM and MLN but they are listed funds with dozens of stocks in them).

Genuine prospects for dividend growth in the years ahead.  Jarden have estimated as much as 39 cps for FY29.
40% dividend growth in the last 4 years, (unmatched by any other company on the NZX), and more to come in the years ahead.

Really like how they can grow their business nicely, grow eps and grow dividends without coming back to shareholders for capital raises. I have a MUCH bigger position in this than HGH and it's going to stay that way.  I have a lot of respect for Todd Hunter and the senior management team. 

[LoungeLizard]

A LOT to like about TRA which remains my single biggest stock position on the NZX, (bigger positions in BRM and MLN but they are listed funds with dozens of stocks in them).

Genuine prospects for dividend growth in the years ahead.  Jarden have estimated as much as 39 cps for FY29.
40% dividend growth in the last 4 years, (unmatched by any other company on the NZX), and more to come in the years ahead.

Really like how they can grow their business nicely, grow eps and grow dividends without coming back to shareholders for capital raises. I have a MUCH bigger position in this than HGH and it's going to stay that way.  I have a lot of respect for Todd Hunter and the senior management team. 

No arguments from me on this one, Basil

Been topping up as I think TRA are a good buy at these levels. As noted, a cut in interest rates would be a nice tailwind to acheive $50m NP this year. $5 SP is also more than achievable this year, which together with a great yield, makes for a nice return for investors. One of the best run business's on the NZX.

[SCOTTY]

Yes, a great business. I do think that the yield is slightly distorted as there were 5 dividend payments in the financial year ending 31st March. Normally there are 4 quarterly dividends.

[winner (n)]

The report Turners put out said March Dealer to Public sales ere down 11% on last year

No doubt Easter the reason

[Waltzing]

NZX listing payments outside the balance date, for 2023.

Company has a  March 31 202n balance date.

Deduct the  april Net Div is 25 cents..

SP price could still be repriced on lower OCR ...   please see Sir B;s post below.

[Basil]

I'm picking 27 cps fully imputed for FY25 = 37.5 cps gross = 8.15% @ $4.60.

[Waltzing]

Its truly amazing the performance of this company in light ocr at 5,5...



 

[Basil]

Martin Berry, (Singapore based) as we know has resigned from the board due to other work commitments so it's understandable if he winds down his level of shareholding over time.  This doesn't give me any cause for concern.

Good that he's finished selling and the significant overhang has been removed.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TRA/429950/417179.pdf