Turners about 10x with little growth
2CC at 10x F24 forecast gives share price $1.10
Printable View
Closed at 42 cents, which is a 9 month high.
Yeah anything on offer below 40 cents is constantly been taken out. The only person that can bring the price down would be Eugene.
Their next quarter update will likely be October, with interim report due in November. The first quarter profit was $1.4m, which is this current quarter is similar should bring it up to $2.8m for the 6 months. If they payout half in dividend we should be looking 3 cents for the interim.
Their payout ratio of 50% earnings i am assuming was put in place to support the cash hungry finance book. Now that has been killed they will lift the payout ratio up towards 80% i reckon. There is just no need for them to hold onto all the cash as the balance sheet is clean as a whistle with no debt.
Even looking at last year, what is probably going to be their worst year ever.. due to the huge disruptions at board and management team level, they generated impressive cash flows:
Operating activities =========$10,908k
Less lease payments======== $2,009k
Less net pp&e purchases ======$167k
Less inventory purchases======$1,623k (company says $10m inventory is steady state for current yard space so need to add back since it was sold down to $8,377k as per balance sheet)
Rawz free cash flow calc $7,109k
So $7.1m fcf and market cap is $19m today.........
They may pay a high percent of the profits to dividend, but usually for interim profits companies try not to get carried away and payout too much and the way I see the current management team they aren't the type to run the company on a shoe string. They will want to keep enough to give themselves a buffer and they might have an eye on growth. They may even think about acquisitions which would demand a large amount of capital. Companies only payout a large part of the profits if they have no better use for the capital, which means less likely any ambition to grow the business in a big way.
I always stick to a Buffet view of things, that a profit is exactly whats left and no other figure really changes that, sure theres non cash items to boost cashflow, but something like depreciation which is a non cash expense originated from capital spending and a business should always have in mind they need to keep reinvesting that deduction to maintain their assets for the future.
I am not expecting an interim divie.
Having the leading position in imported second hand EVs and Hybrids, I would like to see them use that advantage to expand their footprint,with another 2 or 3 sites.
To Rawz's inventory purchase figure of $1.6 mil a further $1.6 mil would be required for 3 new sites,.
Capital also needs to be spent to refurbish and modernise existing dealerships.
At the end of their financial year next March I would think they will be "well positioned" to pay an excellent final fully imputed divie,and then resume interims .
On The Other Hand..??
2CC are trading extremely well.Their balance sheet is strong and their stock turns are high,as is their equity ratio.
I would expect their new banker is impressed,and keen to advance them further funds.
If this is the case an interim divie may well be on the cards.