"pure financial services firm"
but its not as this company handles, touches the product.
Finance has been at the heart of the car industry since when?
http://americanradioworks.publicradio.org/features/americandream/b1.html
"pure financial services firm"
but its not as this company handles, touches the product.
Finance has been at the heart of the car industry since when?
http://americanradioworks.publicradio.org/features/americandream/b1.html
Mid point of those two figures, about $4.60 makes common sense to me and in the meantime if they pay 24 cps in dividends in FY23 that's a gross yield of 8.77% @ $3.80. I think its fair to say we're being paid very handsomely while we hold and enjoy future growth :t_up:
Approx 55% is recurring revenue, (finance and insurance) which will grow and be driven off the back of their retail footprint expansion in the years ahead.
Used car dealer...............Yes,NZ leader.
Finance Company............Yes with a growing number of dealers.
Insurance.......................Yes a growing business.Even HGH's Marac uses them.
Credit Management.........Yes a good earner.
Property........................Yes Yes Yes..Developing their own sites gives them huge margins.Very clever property dealers.
Unrecognised property gains of $18.8m
We have continued to build our portfolio of property over the last seven years and generated unrecognised gains on the seven developed sites of just under $19m or 22c per share over this time and 5.6c per share in the FY22 year alone. Combining the 7 developed sites with the new sites in Rotorua and Nelson along with the 3 committed sites in Napier, Timaru and Tauranga (Tauriko) we have just under $95m worth of property in the portfolio. We also have offers and negotiations under way in East Auckland, Tauranga and Christchurch. We continue to see property ownership as a key strategy that will ensure the long term resilience of the business.
There are investors here that should perhaps have had careers as professionals as there proficiency seems to be better than some of the broking firms.
Think that road map to $5 is well and truly buried for now, ah well just keep collecting those divvies for now. At today's price yield is 8.5%, not too shabby even under current rising interest rates scenario.
Feedback from an Auckland North Shore car dealer - used vehicle sales have fallen very sharply in the last 3 weeks and dealers are starting to advertise specials to get rid of stock, before new ones arrive.
Winter is always a quieter time in the vehicle market and in Auckland this month the weather has been absolutely atrocious.
Happy holder and I haven't forgotten that Todd Hunter said most people buying used cars in the Turners cars segment of the market are making needs based purchases.
And for those that may not be aware fully aware of TRA business model, they're not just into Automotive, they've very profitable Finance and Insurance divisions too that contribute handsomely to earnings.
Just like to add that management encourages its employees into shareholding in the company,which is always a great incentive to work hard & usually gets the right results
[its how the great Bruce Plested who started up mainfreight got his employees into shareholding & see where that company has gone from strength to strength.
Just like to add that management encourages its employees into shareholding in the company,which is always a great incentive to work hard; usually gets the right results[its how the great Bruce Plested who started up mainfreight got his employees into shareholding & see where that company has gone from strength to strength.
not surprised as i outlined a few pages back the highs were well in for this stock.
in summary again the main points
chip manufacturers are catching up production and recession is coming so demand will crash from these highs
interest rate hikes make it harder to borrow to buy a car
Yes there are headwinds but TRA is priced attractively so its an easy hold for the dividend while top quality management execute on their branch expansion.
UDC Finance bought Euroclass financial services this week. A bit of consolidation in the asset finance industry that Oxford is growing in.
Interesting times ahead. Bought some more TRA after a brief discussion with someone in the industry, who finds TRA undervalued. Retail sales might be falling 5-10%, but their insurance side of the company will continue to do well and we may see more upside with that side of the company. We will see some stress in the Oxford side with lending as sourcing the money becomes more expensive. All in all the company is better setup than a lot of others in the industry. If certain car sale yards are struggling they may need to sell their inventory at discount just to survive. Also we an increase in TRA market share as other yards pull out entirely.
Quite optimistic I feel
Nelson branch must be close to opening;
https://turners.careercentre.net.nz/...nt/nelson/2684
at an educated guess, that will add 130 to 140 cars for sale, with say $1500 NPAT per car based on an earlier Todd quote, based on market size it could be of the order of 100 cars / mth or $150,000pm , almost $2m extra profit pa.
The Commerce Commission is not happy with the performance of what it calls add on insurance in the motor industry. I would expect them to perform increasing compliance audits and or introduce even more strict consumer protection laws for these products.
https://comcom.govt.nz/__data/assets...ember-2021.pdf
Boop boop de do
Marilyn
Hey team, when’s the Div hitting us? Haven’t seen any details come through.
another month ---- you'll get it on July 28th
You could have looked here https://www.nzx.com/instruments/TRA/dividends
that CAR Caresales.com taking on the world .... they talk billions
https://www.businessnewsaustralia.co...ebd3bf4ce1f3a6
Different business model but margins / ebitda that Turners would die for
"So after paying US$624m for 49% of Trader Interactive (TI) a year ago, CAR is paying US$1.27bn for the remaining 51%"
Quite a premium for control ehh.Watching CAR for any weakness in s/p.Its one of those few premium Aussie stocks that a flight to safety will pushup .
The annual report just dropped.
Page two has this statement "Looking beyond FY23, we remain very confident about further growth over the medium to longer term and we have updated our three-year rolling target to cross over $50m of profit before tax by FY25."
Taking a look at their NPBT "Underlying NPBT was up 29% to $44.1m" the above forecast looks pessimistic
TRA trading on a p/e of 8.5 and a net div yield of 6% (paid quarterly) according to ASB.
Solid and clear plan for growth ahead.
Jonette- I agree about the forecast npbt of $50m being conservative. But we are apparently heading into a recession so fair enough being cautious and throwing out a number on the low end of what they hope to achieve
It’s probably more a message to the market… hey everyone, stormy clouds ahead, but no worries for us, we will still grow EPS and DPS
Happy holder
MBG (Mercedes Benz) is currently trading on an average backward PE of 5.1 and a dividend yield of 7.4%!
Other car manufacturers and dealers look quite similar (well, but Tesla - too much hype).
TRA seems to be pretty dear.
I suppose the market just expects business for car manufactureres and dealer to get a bit rougher in the years to come. Lucky for us (I am holding MBG) - the market is not always right!
I have a wee link into the Merc truck game in NZ.. if you want to order a new truck from the factory (because the dealers dont have any stock) the earliest delivery is 2024-2025. COVID totally wrecked the 'just in time' supply chain and its going to take years for things to catch up.
Anyways, TRA probably has been dragged down with the sector (and market as a whole) but they are expanding in NZ with new branches and they have solid supply lines of used cars + great finance/insurance business. TRA cheap but growing eps. MBG cheap but will they grow over next 3 years?? (i dont know the company at all. Its a big business with many moving parts and global.).
You realize that Daimler Truck is now a different company from MBG?
Anyway - and for what it is worth - analysts expect MBG to keep growing revenue as well as earnings over the coming three years. Just read as well the Volkwagen Q1 (just another boring international car manufacurer and dealer) ... they confirmed their 15% growth expectations for 2022.
Things seem to look good for the industry. Delivered cars are down but margins are really, really healthy. Whether this will be true for a second hand business as well? Time will tell.
Given that TRA is more living from clipping the ticket ... less tickets clipped might be detrimental to its business volumes and it might not be so easy for them to increase the margin (i.e. price per clip). Remember - when new cars get dearer the price for old cars will rise as well, and TRA needs to first buy the old car before it can resell it.
I wish you luck ... and hey, I highly respect the current management team. Good people. However - I still think that it is a cyclical business. Nothing wrong with that (life and nature does go in cycles) ... just not so good to buy them on the way down.
And absolutely - my past timing with some cyclicals (TRA is one of them, SKL another) was terrible. I was riding TRA at some stage from something like $3 and promising more to something like $1.50. Ouch. So, you well might be right - it could be all up from here. On the other hand - I am not always wrong either :) ;
I noticed that I seem to understand some companies and their cycles better than others and am now investing more often in companies which I can synchronize with ...
https://www.nzx.com/announcements/394538
Nearly missed this letter released early this morning..
Great read.
TRA must deserve the award for best communicator with shareholders. Good stuff. I reckon we will see low double digit growth P.A next 3 years and i am mighty fine with that give its trading on a 8.5 multiple
Dear Shareholder
The Turners Limited Annual Report for the year ended 31 March 2022 is now available. We invite you to read this on our website at https://www.turnersautogroup.co.nz/I...r+Reports.html The FY22 year delivered another record result for our business, with Turners not only demonstrating earnings resilience but strong growth credentials as well. We are confident we have found the right formula and that our actions will deliver continuing growth over the next three years.
Our growing returns are driving much improved outcomes for our shareholders, and we were pleased to deliver record dividends of 23.0 cents per share in FY22.
With another record year of results, a stronger and de-risked business, a clear strategy and a near-term economic outlook that is looking more uncertain, our business has never been in better shape. We are ready for whatever comes next.
Our Three Year Plan
Our three-year plan centres on organic growth and is focused on four key areas, comprising both physical and digital investments.
1. Retail Optimisation and Expansion across people, property and processes.
2. Vehicle purchasing decision-making using data and tools to help identify new sourcing opportunities, and leveraging our brand strength to generate local sourcing leads.
3. Margin management and Premium lending within Finance. 4. Continued investment in digital and improving our omni-channel customer experience which allows customers to engage with us however, whenever and wherever they want.
Looking beyond FY23, we remain very confident about further growth over the medium to longer term. We have updated our three-year rolling target to grow to more than $50m of underlying profit before tax by FY25. On behalf of the Board and management, we would like to thank our shareholders for your continued support.
TRA is NOT a car company, if it were you should be really worried about the Debt/Equity of over 200%. TRA is an Eco-system of three main parts;
- Car sales,
- Bank,
- Insurer
They have large borrowings to cover their banking operation, lending to buyers of cars, and profits on all three sectors are consistently close, although not equal - car sales this year were 37% of operating profit.
VW and Merc are vehicle manufacturing, with an exposure to new car sales, - also very different from second hand car sales. They have minimal margins due to competitive failings - too many countries subsidising manufacture to use cheap labour, again not TRA.
An ecosystem is where the sale of one product is part of an ecosystem where other products can leverage the first. I believe Turners uses all three main products to leverage the other two.
And
4. Debt collector
.....
(n)
property owner ... according to Mr P.
just more than a one stop shop ..
Thanks - I am impressed. You clearly must have read a couple of pages of this thread and are now able to repeat what you read. Good start.
Yes, TRA makes a material part of its income through finance and insurance - and (a significantly smaller part) through debt collection.
So do most car manufacturers. If you have a look into Mercedes Benz or Volkswagens books, you might discover that they make as well more than one third of their income just through financing the sales of their cars. I assume the same is true for most other car manufacturers.
A bit telling is your comment on the finances of Mercedes or Volkswagen ... did you ever look into their books?
If you did, you would know, that their earnings are huge (P/E around 5 to 6) and their margins further improved significantly with the arrival of COVID and its related manufacturing issues. Sell something which is in demand and its a sellers market.
So - fundamentals look good for them (as well as for TRA), however market is very cautious (indicated by very low P/E ratings). Maybe market knows something we don't want to see ... or maybe they are wrong?
Ah yes - and did it ever occur to you that the TRA ecosystem you are describing is very dependent on only one of its components (sell used cars) ... just allow carsales to drop and the rest will follow.
Whatever it is - it might be time to watch out ... but each to their own.
I am sure that the Turners vehicle will traverse a variety of road conditions over the next few years but I have confidence in the driver and crew to avoid the big potholes & large wild animals and keep the machine running.
I was talking to a mate in the asset finance industry yesterday about this coming downturn or whatever and we agreed at the end of the day, machinery, trucks, cars etc. They all breakdown eventually and need replacing. It's science
Absolutely.
However - if people replace their cars only say once every 4 years instead of once every two years, than this is only half the number of tickets to clip.
We are driving both of our cars now already for something like 8 to 10 years (one bought used, one bought new) and both of them are well maintained, safe, economical and run well. At this stage I don't see it as a good or opportune time to replace any of them. Might wait until the premium for e-vehicles and hybrids drops, and I think both have still another at least 8 to 10 years of life in them.
Admittedly - I never used a finance company before to buy a car (or anything else) and I don't intend to change that either.
If others follow this example than people will keep more money in their pockets but the business for companies like Turners might shrink quite independently from the need of cars and machinery needing at some stage replacement.
NZ motor vehicle fleet does not get any younger year on year,so plenty of natural organic growth for the sector.
As TRA are the leading NZ used vehicle dealer they should out perform others in the sector.
With a current PE of 8.89 and paying fully imputated quarterly dividends [currently 5.85%] their ratios appear modest to me.
In an article published in August last year it was reported that the number of registered dealers in New Zealand could dip below 3000 for the year and that people are hanging on to their cars for longer.
TRA is expanding - not retrenching - and have car-only dealerships in 19 locations. There is plenty of opportunity for them to continue to expand and grow sales volumes and finance and insurance revenue even in a contracting market.
Like Snow Leopard, I have confidence in the company leadership to navigate the twists and turns on the road ahead.
Used car prices could stay 'elevated' for three years | Stuff.co.nz
With the immigration tap turned back on and up to 75,000 a year next plenty of new customers for Turners
TRA have a NPAT constant avg growth rate of:
10 year CAGR of 26%
5 year CAGR of 6%
3 year CAGR of 14%
Not sure what to make of that lol
I bought a car off Turners and they made a loss on it, it needed a bit of work before they could sell it. I said that's not great business is it and the reply was maybe one in 10,000 times that might happen. But in the process of looking I learnt quite a bit. I am surprised they are only making 1500 per unit sold because there must a be a fair few they make much more and the auction fee is quite a tax. I had a valuation out of interest on a car I was looking to trade in and I could see them selling similar/same car for 4 or 5k more. I have watched their auctions quite a bit and they turn over loads of presumably ex lease rangers and other commercial vehicles for very close to a dealership price.
I would be happy to buy off them again. The staff are great and seem to know their stuff plus they don't try to hide any obvious defects. For a bigger purchase I would always get the vehicle checked out elsewhere though.
Very bullish/confident outlook. Everything is very much under control and their destination is strongly in their hands. Not many other nzx companies talking like this…. That’s why these guys are my biggest holding. Keep up the great work!
Demand is outstripping supply so we have low inventory levels, says Group 1 Automotive CEO
On CNBC this morning; to the end of the clip a quick reference to the value car market.
‘Also, as we know, chip shortages still an ongoing issue.
https://www.youtube.com/watch?v=lH4rr8j9HEE
There are many variables and unknowns.
Two of the more influential are, in my opinion :
1. Reducing number of car dealers and
2. Turners having and actively branding themselves as a high-trust brand.
These two factors, plus having 99% of their cars locally sourced will off-set the economic situation.
Hence, Turners being my largest company in my portfolio.
Last day to get in to be eligible for divvy..7c it is.
But the e
x-div date is the 18th isn't it?
Most of this quarter's dividend has disappeared with today's s/p rise.
Few decent lots of off market crossings today to round off last trading day before going XD on Mon.
it seems the article backtracks from the nose-dive, and plunge adjectives used in the headlines and initial paragraphs though
At the end it says
as buyers shied away from buying, prices for used cars were beginning to edge down.So maybe its a bit dramatic, and Turners will still buy and sell cars and make a margin whatever the prices are, though inventory value falling isn't ideal.
Prices had been high, but they were softening in the used car market, Hedgepeth said.
“Prices are easing from their highs at the end of last year.
Having the fastest stock turns in the sector should mean falling values may have little affect on Turners.
I would think they have been reacting since January and are well ahead of the field.
We must also remember Turners auction as well as sell on behalf,so they will retain their margin on these sales.
You are right ... live will go on, however - number of sales going down (i.e. less tickets to clip) as well as the value of each sale going down. Bad combination. Even if they can keep the same margin - it will be a smaller amount on the bottom line if the average sales value is lower ... and I suspect that increased competition in a receding market might even cut into the margin percentage.
As indicated before - it is a cyclical business and currently the cycle is clearly trending down.
The interesting questions are:
will this be a slope or a cliff?
Where is the bottom?
Market maybe foresaw some of that gloom …no wonder share price down 20%
BP says a cyclical ..slope of cliff …..maybe Baker et al will again be saying good buying at 3 bucks
Just remember TRA have provided guidance of growing earnings through this down part of the cycle BP is talking about.
That article is Turners providing commentary on the wider industry which i am expecting to suffer far greater than TRA.
Maybe we get the opportunity to buy cheap TRA shares in the coming months, maybe not.
The issues facing the sector will add opportunities for Turners to increase market share.
deleted - duplication
My thoughts, here they are:
1. Talk of cliff is simply nonsense. Buying a car is largely need-driven.
2. Turners will be under pressure, but nearly every other dealer will be under more. Remember that 90% of cars Turners sells is in the country already.
3. Number of motor vehicle dealers will decrease, so a bigger market share for Turners.
4. Nelson still to open.
5. Turners reputation is a bonus in these uncertain economic times.
So, of course there will be pressure on profits, certainly in the next few years. But the medium and long term picture looks good. Only short-term traders need to worry. I intend to use the upcoming dividends to buy more TRA shares.
Am seeing a lot of Tina from Turners, she is always popping up on tv and now radio. Becoming iconic or annoying depending on your perspective
Turners may or may not be under pressure, but NZAI is under a lot more, not due to sales issues though:
https://businessdesk.co.nz/article/m...or-shareholder
the link name says it all if you have not got a sub
Obviously - we don't know yet, how the cheap car saga plays out. However - I think it has potential to impact on Turners (or their market) no matter what they do ...
on the opportunities side it might mean one competitor less to worry about (even if I am not sure whether they had the customers Turners would like to have).
on the risks side it might mean a firesale of a lot of "cheap cars" flooding the market during a market downturn.
Anyway - interesting times. Market consolidation always brings risks and opportunities, which is often good for the established and big players.
Turners have started advertising cars at their Nelson Branch, just 12 today, but I expect that to grow a lot.
https://www.trademe.co.nz/a/motors/c...user_region=13
Turners website says that Nelson will open in August. Yippee
I had written off Turners subscription business as a nothing burger but the idea seems to be catching on.
The website and service is a bit bare bones (no car seats, snow chains, tow bars etc) but the staff are very efficient and friendly with a car salesperson's desire to sort out any issues over the phone. Not sure why they needed Carly.
Cars, especially electric cars don't stay available on the site for long. Apparently there is now 150 cars out on subscription, about $1.5m in yearly revenue.
Car dealership business Ebbet have launched a competing service Ebbet Subscribe for near-new cars at slightly higher price points albeit with much less monthly kms than Turners. They use Aussie platform Loopit which is designed for car subscriptions so I guess we can expect more such services. Nothing like competition to promote and validate an idea.
Hi Jaa, Did you discover they have 150 out on subscription by totalling the Reserved cars?
I can find a list of cars with two availability categories, reserved and available. Does reserved mean they are out with a subscriber? There appear to be 151 reserved today, just 5 in the SI.
Have you managed to figure out the average rental price for reserved cars to get the $1.5m?
https://www.turnerssubscription.co.n...cription-plans does that help?
I needed a car and as a shareholder wanted to do some research/support Turners so I subscribed for one and that's the figure the rep gave. Was a very efficient customer experience with all the paperwork electronic, credit check by EC Credit of course.
But yes you can also get an idea by how many cars are reserved and the regional popularity by where the cars are. The service isn't very popular in the regions, New Plymouth, Bay of Plenty, South Island etc.
I assumed an average weekly subscription price of $200, so I multiplied that.... 200 * 150 * 52 = $1.56m. The average car in the list is less but subs with more usable kms/lower excess are more than the prices shown so should be about right.
Thanks TRA for another juicy quarterly divvy payout, which landed in the bank a/c today.
Tina Turner the Musical is in Sydney next year
Turners should run a promo around it --- win a trip to Sydney to see TINA or something like that
They could even send TINA over there as well .... get rid of her out of NZ and make my day .... she really pisses me off every time she pops up on TV or a video
Mean. .
Agree those Tina ads are the worst on radio. I cringe everytime
Well done to Turners if thats what they were aiming for
Sir Michael Hill said he knew he made it in Australia when the aussies started to hate his ad's and replaced, "Michael Hill, Jeweler", with
"Michael Hill, ****er"
lol
we are a long way off from that legendary status. Need to pump the Tina ad's heaps more. cars cars cars
Funny, I don't mind the Turners adds at all, I think Tina is very good.
I watch very little TV though, so would only see them about once a fortnight.
Plus I have shares, so hope like hell that they work :-)
I've been looking at cars at turners in the last week and every second picture on every listing is Tina. I grow weary of her face.
Focus on cars, not on Tina 😄
I see there's TINA show on in Wellington in October
SIMPLY THE BEST
https://www.wellingtonnz.com/experie...mply-the-best/