Seems to be a good result and the final dividend is bigger than last year's :p.
Disc: Kept the faith.
Seems to be a good result and the final dividend is bigger than last year's :p.
Disc: Kept the faith.
"2. Leverage the high trust Turners brand
Our scale offers multiple advantages, and trust will be even more important in the new economy. Turners has just received the READERS DIGEST Winner of the Most Trusted Brand in the NZ Used Car Dealer category. We plan to continue our focus on great customer experiences and outcomes and keep promoting and investing in helping people understand the strength in the Turners brand. "
"At beginning of lockdown we modelled out three scenarios (Worst, Likely and Best). Pleasingly we are thus far tracking ABOVE the best case. April and May trading have been significantly better than what we expected as we moved through alert levels faster than originally anticipated. The benefits of laser focus on costs, rent reductions and wage subsidy have been material.1. Accelerate market share growth
"Turners currently maintains ~6% market share of the used car retail transactions and will concentrate on increasing this through optimising existing branch networks, creating new consignment relationships, expanding its retail footprint, and taking advantage of market consolidation." With car dealership to reduce this year"
"We are working on two major data projects which will help us in the area of pricing vehicles and identifying credit risk. Both these projects leverage “off-the-shelf” cloud-based data tools, including machine-learning. The proof of concept results are promising and we know there is a significant opportunity in vehicle purchasing to help identify and limit our “bad buys”, as there is in the finance business with identifying and limiting our “bad lending”. Using leading edge tech to improve efficiencies ETC.
"Car subscription progress has naturally been impeded by Covid-19. We are working directly with Collaborate Corp (CL8.ASX) in Australia to get the subscription platform set up for NZ. We have now made the decision to brand the business under the Turners brand umbrella due to the high trust and strong brand value and recognition attached to the Turners brand. We expect Turners Car Subscription to be up and running in Q2. " Distancing from CL8?
IT really is an impressive result and well worth a read.Punching above their weight atp.
Strong FY20 result for Turners, and Q1 recovery underway
"Based on a FY20 payout of 14.0 cps (fully imputed) to shareholders this represents a gross dividend yield of 9.8% at an indicative share price of $1.98. The board’s intention at this stage is to continue dividend payouts at the level of the current policy for FY21 which is 60-70% of net profit after tax." But no guidance
"Our traction with customers connecting to ECCC via Xero and MYOB continues to gather momentum with over 420 customers connected now loading debt worth over $3m. We have been working closely with our large corporate customers to help manage their reputational risk with debt collection work during lockdown and we are expecting a significant increase in debt loaded from these customers in the medium term. We have already seen a lift in debt load over the last few weeks from SME customers. "
I feel like Basil Fawlty saying 'no one mention the war' (but of course that episode has now been banned hahah)
- Reported earnings per share was down 8% to 24.4 cents per share
- Shareholder equity decreased to $223m (FY19: $226m)
so actually the result is easy to pick holes in but we are letting them off coz of Covid right?
The effects of COVID per se, i.e. a couple of months of sales impact, could turn out to be a rounding error on the impact of a sustained deep recession when businesses and punters slam their wallets shut for a few years. Easier and cheaper to get the old dunger maintained than splash out the cash or go into debt for a replacement vehicle.
The worst is ahead of us thats for sure. Hence no guidance,They are optimistic about divis, heres hoping.
The episode is back for viewing and if you read the accounts you can see the why of your above two items of note.
My faith is unshakable and will remain so until it does not. <<mysticism :p
and here was me a week ago concerned about putting more $$ into TRA at about $1.90 or something...
for full context, they are getting a bit close to my sell price right now. Is there any interest in the reasoning on valuation on some unqualified amateur? Could post something if so, i suspect i would learn a lot from people highlighting the massive gaps in my analysis and errors/risks in my assumptions made. Probably more than anyone would gain from my analysis, so maybe no value in posting anything?
Solid result and great divvy despite lot of gloomy talk from many posters here and under current business scenario.
Good on Todd and team, well done.
Baker told us the TRA share price should be over 3 bucks
Getting there
looks like someone is still accumulating
not long to ex div , better get in it might run away
9% dividend worth a punt i reckon , punting that they can maintain most of this dividend going forward. used car sales are rebounding in most countries quickly therefore any dividend yield near 9% is much better than 2% in the bank.
Jun 17, 2020,01:43pm EDT
Used-Car Sales Rebound First, As Sonic Auto Reopens From Pandemic
Even before the pandemic, many customers with good credit histories who could afford a new vehicle were purchasing used cars and trucks instead
https://www.forbes.com/sites/jimhenr.../#70329e923bbf
Attachment 11750
June change of registrations highest for 2020.
Lovely , i can see a bird in flight with those charts:)
Sneaky car dealers and loan sharks ......preying on the not so informed
That’s what clipping the target is all about ...good for shareholders
https://www.stuff.co.nz/business/mon...om-dealerships
In her partial defence some car dealers are pretty slippery characters and could talk the legs off a chair. Use of phrases like "total peace of mind" when it comes to selling mechanical warranties is par for the course, regardless of the fact that many policies have pretty modest claim limits such that a total engine or gearbox failure might not be fully covered. Sadly far too many people are focused on the vehicle and the weekly payments and a lack of financial literacy means many other details don't get proper consideration. https://www.autosure.co.nz/ Even the homepage says a mechanical breakdown insurance helps safeguard your credit rating...hmmm.
I was talking with Jeff Greenslade at a HGH presentation.
He told me with people using their phones could check the finance terms a store like Leemings were offering,compared with HGH's rate.He thought the days of store arranged finance days were numbered..
Sounds a lot of money is to be saved by shopping around for finance, no matter whether it is for a car or a fridge.
Isn't this why the likes of Afterpay have become so popular? Not sure you can Afterpay a car but probably only a matter of time.
Car share company Yourdrive hit by Covid cash crisis but 'not closed up yet'
New Zealand car sharing company Yourdrive has been badly hit by a Covid-19 cash crisis but hopes to get back up and running in some form once it pays out all its creditors
https://www.stuff.co.nz/business/ind...-closed-up-yet
wonder how turners share car going?
Car subscription progress has naturally been impeded by Covid-19. We are working directly with
Collaborate Corp (CL8.ASX) in Australia to get the subscription platform set up for NZ. We have now
made the decision to brand the business under the Turners brand umbrella due to the high trust and
strong brand value and recognition attached to the Turners brand. We expect Turners Car Subscription
to be up and running in Q2.
Well done Todd, first time I've seen in a while someone from top buying on market, 50k quantity @2.19 a piece.
https://www.nzx.com/announcements/356699
The long term trend in container traffic is growth.
If Ports Or Auckland want to fill in more of the harbour to capture this growth there will be serious political blowback.
Tauranga faces practical difficulties expanding the Sulphur Point container terminal
The pollies should take a deep breath and stop trying to define the future. All they need to do is establish rail access to Marsden Point. Traffic growth and capacity constraints means container traffic will overflow to Marsden Point .
Boop boop de do
Marilyn
Divvy just hit the bank account, very happy :)
Interesting reading https://businessdesk.co.nz/article/r...te-night-texts
I hear there is a massive fire @ a car storage facility in Auckland out by airport.
Turners ? More likely rentals I guess.
https://nzherald.co.nz/nz/news/artic...ectid=12361725
ASM in couple of weeks, should see another divvy announcement coming our way of at least 4c I think...
https://www.driven.co.nz/news/big-br...ampaign=triple
Interesting new competitor.
I saw the Govt saying it was selling its cars through Turners... so gotta be reasonable volume in that lot.
Product review dot com dot au shows poor ratings for Easyauto123. The majority of the ratings are 81 one star ratings....it might be that the NZ company pays more attention to their customers.
Second-hand car prices have soared: here’s why
Trend in Australia relevant to NZ also? - Good news...
https://www.news.com.au/technology/i...September+2020
Could well be $3 at this rate in no time :D
GENERAL: TRA: GENERAL: TRA: Turners Annual Meeting Webcast Information
Happening now.S/P $2.50 atm outlook good and div projected to be 17c.
I hope so. Rather tired of the ~20% capital loss whilst enjoying a decent dividend. Have quite a few and wasn't prepared to average down when it dropped recently....would have really blown out my portfolio %....although in hindsight maybe I should have got a few.
While I'm happy to hold and enjoy the dividend....difficult to see significant growth ahead.
He looked a bit stress tested himself.
Looking great and div sustainable, great outlook and covid weathering(sold 600 cars during lockdown). I bought back in @$2.20 cum div.
Some good snippets around business operations from Todd, very encouraging and pleasing. Like their new "Buy safe" concept launched during lockdown.
Excellent - finally back at break even at 255! Projected dividend of 17c gives a gross yield of 9.2% - PDG in today's world.
I wonder if Percy is back in? Percy, always appreciate your thoughts so if you are lurking what do you think?
Baker et al were always adamant the tra share price should be well over 3 bucks,
I have been out all morning so have just read the agm presentation.
Brilliant.Sorry I sold out.!
Just goes to show how important it is to a business having the directors as big shareholders."The owners eye'.
All the reasons I sold out for have proven to be groundless.I wrote off $5mil for stock write down,$5mil for being in lockdown and $5 mil for loan impairements.
OK 24% of vehicles were sold for a loss,lockdown has cost them,and I expect impairements will increase,however it all looks to be between $5mil and $7mil,ie less than half what I expected.
Strong out look should be pleasing to shareholders,as will be the excellent ongoing divies..
I will have to wait until such time as I get the daughter's property purchase /sale done before I can start to think of reinvesting in TRA.Maybe a good few months away unfortunately.
Turners car subscription service is now online https://www.turnerssubscription.co.nz
Plenty of reasons for shareholders to be happy with today's update.
We have heard anecdotal talk of used car pricing being much stronger, (talk over the Tasman of prices up circa 20-30%).
We have also heard some discussion about how demand is much stronger due to people's reluctance to use public transport during Covid, which is perfectly understandable.
Further, some here have suggested with little to do and all that monetary stimulus people have been better positioned to pay their car loans and Turners certainly alluded to that in their presentation.
Good that they are forecasting a very slight increase on last year's profit and have the confidence to do this so early in the FY21 year.
I'm just a little underwhelmed in the circumstances with the above tailwinds that the forecast increase in profitability is so modest. I suppose in a Covid world and with their modest PE that's a pass mark and its probably a good hold for yield in the mid $2's.
I think COVID will help them....if one had a choice...from a health perspective...would one prefer to jump on a bus or train...or drives one's own car.
This will affect many of the people that buy cars in Turners range. I think anyway.
LIve in a retirement village [full of 250 old farts with money to spend on cruises,like us].Now with one lockdown after another,many like us are saying no more cruises,to dangeruous to get onto the petrie dishes].So you cant update your home,because thats the villages,so upgrade your car,plenty in our village have done so [because you know we just dont die so young & have to keep up with the times].Have a great one [can tell you, HAVE PUT QUITE A FEW GRAND INTO TRA,it beats the 1.3% the bank was giving to us.Good luck to you all
I agree, they have been a 2020 dividend star. I tripled.
No more cruises ay.
Surely not?
Whose surprised that there’s been no announcement or advertising about going live with their car subscription service? Or have I missed it?
I really want to invest in Turners. Seems management are very aware of the direction to go in, a classic unloved 'boring' Peter Lynch stock that no one cares about but quietly has strong growth. Great value trading very cheap.
Sorry if this has been talked about before, but I just can't bring myself to buy in. Can anyone explain why they have such high debt? I haven't come across a company so levered - is there a particular reason?
Debt/Equity 150+%. Just paid $12.8m in interest costs on $30.3m in unlevered free cash flow (according to my basic calculations). 30% of FCF going towards debt and 42% of unlevered FCF paying off debt.
Anyone that knows more about turners can explain why this is good amount of debt?
Easy. Turners is basically a finance company with a plugged on used car sales business. If you compare them with other finance companies, then you will find out that the liabilities don't look that outrageous.
Obviously - Finance companies do come with particular risks (especially given the current situation of the NZ economy). If the future brings e.g. large unemployment, this would hurt them. Up to you how you rate these risks compared to the potential rewards.
Discl: don't hold.
I remember working with Bruce Plested many years ago,then he started Mainfreight & his idea was give staff an incentive & look where they are today [what did he do ,he made all his managers shareholders].Reading the latest result of TRA what is interesting they are are going down the same path.As an oldie I can really relate to that,you can see they pay quarterly high dividends & what gets staff motivated more than knowing if they perform well they are going to get nice bonuses in the way of dividends every 3 months.I think this company will do quite well [hope you got onto my other tips MET & PPH earlier this year,at least doubled your money].Be lucky
Another week to go to get hold of divvy before it goes XD next Fri...
Last day for yield chasers to get in to avail upcoming divvy..
I bought back in for a modest stake on Tuesday to add some diversification to my portfolio. 9.44% gross yield is very attractive and I believe it is sustainable for the foreseeable future. I see people's reluctance to use public transport continuing, (demand for Turners cars remaining strong) and interest rates headed to zero.
I see imports have dropped in a big way,which has pushed up the price of cars,so in the short time [next 6 months] the price of cars & margins will go up,can only be good for Turners.See the share over $3 in the next 2 months.Good luck [my bank warned me interest rates for investments will be around half a percent,might as well have your money under the mattress].Stay lucky
My main trading bank BNZ has dropped its business call account rate to 0.05%, (that's not a typo). So to be clear, my money would need to stay at call for 20 years to earn 1% before tax. The mind boggles. What happens when the OCR goes negative, will they charge us to keep our money "safe" ?
Anyway back to Turners....sorry for the thread digression.
Read on the bull that used car prices in Australia up 29.9% year on year.
On CNBC this morning used car prices up 9% in the U.S. last month after climbing about 5% the month before that. Biggest jump in decades apparently. and it seems this is a common thing in most parts of the world driven by lack of new car supply and a huge increase in demand for personal transportation as compared to public transport, (for obvious reasons). The net result is people are paying the window asking price or very very close to it with very limited ability to negotiate.
Can't import second hand cars into N.Z. now unless they have electronic stability control. Combine these two factors and what a serious tailwind this is for Turners. I wonder if Turners are charging enough for their old clunkers ? This amazing once in a lifetime opportunity to get heaps of extra margin and all Turners are talking about is a very modest uplift in profit in FY21 ? Go figure ?
Are they pulling our leg and there's probably a significant forecast upgrade coming or is this just a very average company not taking advantage of their brand power (if there is much), or are delinquent debtors the hidden problem undercutting what should be much stronger growth this year ?
My pick is that we would see a 3 handle to the sp before Xmas....
https://thebull.com.au/used-car-prices-soar-petrol-prices-creep-higher
Just a little more colour...
- From that Australian article kindly provided above Data analytics firm, Datium Insights, provides a weekly report on the used vehicle market. In the week to October 9, used motor vehicle prices rose by 0.7 per cent after rising 4.4 per cent in the previous week.
WOW...hope the "experts" running Turners are on top of this and taking advantage. The days of reducing car prices that have been on the car lot for a wile are over...the best move is to put them up !
And yet today there are over 1000 cars discounted on the Turners website. Of approx 2800 cars.
What happened to all those idle rental cars? Surely they are available to the second hand car market at the right price.
I hear talk they weren't enough to meet demand from customers wanting near new cars. (Don't forget huge supply chain interruption from Covid with new cars).
It isn't just that.
The ice car manufacturers need to raise prices to finance their way to an ev future.
Biggest move in a century.
And still no announcement or advertising (thatI’ve seen) for their new car subscription service. You really have to dig for it on their website to find it, and only 29 cars available! Makes you wonder about their conviction on the Carly enabled subscription service. Probably cannibalises their used car sales, so some strategic conflict to work through? A couple of mill $A not a bad investment to position for car subscription, but you’d think they might have put more effort into promoting it? Quite confusing really
Maybe a soft launch for the car subscription service with Carly given the current Covid situation in parts of Australia. ? But that doesn't explain the soft launch here...who knows, maybe there's very limited demand at present. Despite level 1 here the idea of sharing cars via a car subscription service...I dunno...good concept but is this the right time with "sharing" for it to get any real traction ?
Tailwinds are so strong in the used car sector I think Turners will do pretty well despite some pretty average execution in certain area's.
Hi all I see there are a few questions/comments on our subscription service...we are very much in soft launch mode while we iron out any kinks which is a pretty typical approach. Marketing is very PR and digital focused, and ramps up over the next few months as we get users and case studies that we can share with the public.
Advertising dollars are very targeted so quite likely you may not see the ads. As a number have commented on here supply is very short in used cars because of the supply constraints in new car supply chain...so we will build subscribers and stock levels as demand calls for it. We don't really know what the demand will be but it makes sense commercially to increase marketing spend as we get a feel for levels of demand. The great thing about digital is that there are very clear and transparent metrics on cost of customer acquisition, and I think there would be plenty of criticism the other way if we spent a ton of money on tv advertising with little to show for it.
Also subscription isn't really about sharing...when you are subscribed to a car you have 100% exclusive access to it, as opposed to a service like City Hop which is car rental by the hour ... much more of a sharing model. I suppose it could be called long term sharing as the minimum time to subscribe is 30 days. And a reminder each car "deep cleaned" after it is returned of course!
if anyone has further questions happy to answer directly @ todd.hunter@turners.co.nz
Comment from Aust on re-purposed buying power - good for TRA...
“But you know I think our cautiousness around the consumer has probably been ill-placed. Remember too that Australians as a whole used to spend some $40 billion or so travelling offshore in any given year. That equates to about 12 per cent of retail sales.”
Another mouth watering quarterly divvy just landed in bank a/c, thanks TRA and team :)
Many thanks Todd for coming on here and clarifying things for us. To the best of my knowledge you're the only CEO of a listed company that engages with investors on here so you deserve significant kudos for that. I have a few questions if you'd be so kind to give us some further clarification on at your earliest convenience that would be much appreciated.
1. Firstly on the new requirement that only cars fitted with electronic suability control, (ESC) can now be imported.
Will this be really supportive of the value of older cars in your stock at present that don't have ESC as the newer imports will cost more and there will be a lack of fresh supply of older cars ?
2. There has been much talk of significant increases in the value of used cars overseas due to a range of factors including supply chain interruption on new cars and a big demand increase for personal transportation, (as opposed to public transportation due to risk concerns over Covid). Extract from Barramundi report today is as follows:-
Given our status in N.Z with Covid being significantly better than most other countries, are you seeing the same thing here with higher demand from people for cars too worried to use public transport and if so do you think that will be an enduring tailwind for Turners for quite some time ?Quote:
"Carsales (+18% in the quarter) has also benefitted from a surge in
demand for vehicles advertised on its domestic and international websites.
Heightened demand for domestic car travel and an aversion to public
transport has resulted in an increase in first-time car buyers and boosted
vehicle demand".
3. Do you foresee Labour getting back into power as beneficial to Turners ? Higher minimum wage, potential for higher payments to beneficiaries meaning more people can afford cars and those that have them are more easily able to afford the payments ? What about the cost to Turners of these higher wages with the minimum wage going up...would that partially offset that ?
Disc: I bought a few more Turners shares yesterday.
Popping my cherry as Peat mentioned dividend in, looking good.
__________________________________________________ __________________________________________________ __________________________________________________ _______________________________________
Hi Beagle, thanks for the kudos...I appreciate that. I hope the comments I make from time to time are helpful and provide insight. Well done on your share purchase too. Answers to your questions below...
1. Short answer is yes...we didn't stockpile non ESC cars, but vehicle prices have definitely gone up. There have been two large impacts on supply this year....
a) the ESC change which has reduced the pool of available cars that could be imported into NZ.
b) Covid and the impact on new car supply chain which had an impact not just locally but also in Japan and the number of cars available in the auctions over there.
2. Prices for used cars have risen steadily from late May. At this stage, the effect of supply disruption i.e. the new car supply chain interruptions + ESC change mentioned above are more material effects than any shift in demand caused by substitution of public transport with private vehicles.
3. Yes I do. I think this business always goes slightly better in a centre-left government due to the level of support/stimulus that comes with Labour. Beneficiaries are not really our target market but middle NZ families do benefit as well. Most of our customers who have mortgages will have or about to get substantial decreases in their mortgage payments, no overseas travel etc, and the unemployment rate has not peaked like the economists thought it would. We feel confident we will continue to prosper. In regard to the minimum wage it will be an immaterial impact as we have a small number of people on the team at this sort of level.
Thanks
Todd
Many thanks Todd, much appreciated.
Great to see other key management members involve in the presentation y'day to NZSA Investor day.
Half year results on 25th nov.
Had a good experience on friday ,bought a hybrid at Turners, great experience and service. He said they are very busy and it looked it while i was there.
More encouraging news on Used Car Pricing from Aust. Looking Good for 25th Nov...
Consumer splurge on used cars gives Carsales a COVID boost
https://www.smh.com.au/business/comp...22-p56gt2.html