I’ll get in first ….We’ll done Todd and the team
I’ll get in first ….We’ll done Todd and the team
good result .... cyclone helped ?
i dont agree with there prediction on pg 43 of OCR down cycle commencing 2nd half this yr therefore have to question there chances of achieving 50m target by 25 if there forecasts are based on lower rate cycle. Also rbnz forecasting after this wed may show much higher for longer forecast throwing into doubt even more there senario's
i brought tra as disclosed on black monday thread around 330 mark
Good result - continues to be a very well run business.
cyclone probably helped some in Q4.
re the roadmap and interest rate risk, & the original FY25 target set in FY22, that's why they now updating to suggest a scenario where "OCR peaks higher than 5.5% & increasing cycle continues into 23/24 then more likely to achieve $50m target by FY26". Broker consensus already assumed the $50m target could take a bit longer than FY25 - consensus prior to today sat at 48 in FY25. Will be interesting to watch how it changes.
I agree that the 50M by 2025 could be challenging, but I feel that it will be more challenging for the little guys who are continuing to fall. This is where Turners have the strength to endure and pick up sales off other business failures. I am ok if they make 50M in 2026, at least they have a 2025 goal that seems moderately achievable. Im guessing this is where you sell and wait for a clearer picture?
I also spoke with a local dealer that says the Cylone will help their (TRA) business for approximately 6 months as they help insurance companies sell the usable parts of vehicles that were written off.
EDIT: only roughly 50% of all cars written off
FYI bull...about 1.2cps from the floods.
Great to hear their answer on new cars. Turners is THE used car brand. A new car business comes with a new brand and picking up risks from the supplier. Imagine the damage potential of a major recall!
great expansion plans but still timid, eg Lower Hutt but not yet Wellington. The only presence in the region remains Porirua after they pulled from central Wellington
Developing their own sites Turners [insurance] get to keep the development margin.A good earner.
• Property, plant and equipment increase due to
development of sites in Rotorua, Nelson, and
acquisition of sites in Tauranga, Napier, and
Christchurch.
Yep, I particularly like their expansion plans.
Don’t anybody tell Sailer Rob about the Turners insurance float that Percy mentioned
Hold none myself, but been buying in my daughters Sharsies account for the past 6 months.
When I last went through it with her the other day, normally her eyes glaze over when I explain what companies she has money invested in and what they do. But then I said Turners Automotive was one of her largest holdings.
Not expecting her to know who they are she said: TINNNNNNAAAAAAA FROM TURNERS
The power of advertising!!
She is a happy holder!! :)
I'll be up for the DRP!
"A dividend reinvestment plan (DRP) will be a feature of the final dividend with a 2% discount applied for those taking up the DRP"
The DRP may be good or not so good, it depends on TRA price variability and the rules applying to DRP (Todd says they will be released shortly). I have been applying my own DRP for mine as well as my grandchildren's shares for the last year and found that if I stick to buying between announcement and payment there is often a very low point in price and the 2% discount may not be enough (about 7¢ per share) to beat that strategy.
The downside of DRP is that it is dilatory, ie as I understand it, these shares will be issued as new, which means the dividend can be applied to increase equity, reducing dividends in future by a tiny amount.
I will wait for the rules before committing.
well yes one can argue the minutiae of entry points and opportunity costs but if income is not required then its a good way to set and forget for capital appreciation. sure you might judiciously purchase at better prices (or not) so yeh, unless the rules are horrendous - and 2% discount sounds generous to me - then let it (D)riP
2% doesn't sound anywhere enough to me. I got sick of being stung on Heartland......so I now take the div and make my investment decisions when I want to. An advantage of this is I will buy a decent quantity of shares, rather than a dividend amount.
But yeah...automatic compounding, set and forget...not all bad.
Well if you bought shares cum dividend, with the specific intention of getting DRP shares, that you would then unload quickly for a profit then 'yes'. Any gains you made on selling those new shares -once sold- would be taxable. And sure a 10% discount might give some a better incentive to do this than if the DRP shares were dished out at a 2% discount. But what you have to remember is that the business does not fundamentally change at the ex dividend date. All that happens is that the same earning capacity is distributed over more shares. That means no value overall is created by the DRP, with the gain in value of any new shares being issued under the DRP exactly matched by an equivalent loss in value spread over the existing shares. IOW no gain overall. Nothing to tax.
SNOOPY
Never thought I would invest in a car dealer, but invest I shall- I like their expansion plans and they've done well in a difficult market
DRP announced in case anyone missed it:
http://nzx-prod-s7fsd7f98s.s3-websit...311/395629.pdf
Just to keep my (voluntary) disclosure up to date ...
It took me some time, but I managed by today to buy a M-sized parcel for a price I was prepared to pay.
Promise however to keep pointing out any risks I can see with the company - we certainly have already enough other cheer leaders on this thread.
Does this qualify me as supporter?
Good on you for disclosing BP!
Nothing wrong with pointing out the risks - that's what any objective person ought to do. There are many associated with this share.
You are well qualified as an objective holder.
I actually bought some as well. I wasn't intending too at all...I've bought TRA shares I think 7 or 8 times over the years. But after selling down a ridiculously priced lithium holding I had some spare dosh I split the winnings up and bought more TRA, GNE, CEN, and SKC over the last 2 days. Don't like this will have been my 2nd highest parcel (price per SP) that I've purchased in TRA, but wanted to convert some non dividend paying shares into divy yielding shares and thought TRA fit the bill. Was pleased the debt limit got raised so spent some that I had been holding back.
Keep us honest BP. No harm in that.
Yooooooo welcome aboard BP
Good on ya.
No, Tina from Turners didn’t die.
https://www.stuff.co.nz/entertainmen...ners-didnt-die
Isn't it fully appropriate that Tina has some cheer leaders, doesn't that fit well with her image?
She should have got a Grand Dame gong today, ahead of the one that got it.
NZAI recently changed their company name to 2 Cheap Cars. An extremely odd marketing move, emphasising cheap will not work well.
However they also just closed their Hawkes Bay yard, they may have been washed out but they no longer have a presence. It was performing badly for a long time before they closed, with only 30 cars on their lot at most. Interestingly their Wellington yard looks similar with only 20 cars on the poorly located lot (on a busy roundabout), reducing inventory over recent weeks.
Since the owners listed the company and sold shares, the share value has plummeted from $1.30 at launch just 2 years ago to now $0.27. And they appear to be exiting the market.
Glad I could see that coming!
I can not comment on Hawks Bay or Wellington,however ChCh branch had 70 cars on their site and sell approx 50 a month.Yes 8.57 stock turns.
Their balance sheet is strong with an equity ratio of 55.07%,an excellent cash flow from operations..Intersting to note 41% of their sales are electric or hybrid.
Happening on 26th June NZA to new ticker 2CC.
Makes sense .
"This change marks a new beginning. A reset was needed and that is what has happened. It's now about accelerating performance to new heights. The new board and CEO are well established now and working exceptionally well together. We've made tremendous progress in the recent months with the appointment of new Auditor UHY Haines Norton Sydney, successfully changed over trade finance providers to strengthen our access to funds. There is almost an entirely new leadership team in place and their progress on results over the last quarter in particularly is a great start. We've done a reset, the past is past and we want to be judged on our performance from this point forward," Stiassny says.
Deleted ….Bubbah is one nice person
Annual Report
http://nzx-prod-s7fsd7f98s.s3-websit...843/397411.pdf
Found TRA on page 3. Not much going on.
Just realized im heavily exposed to NZs used car market. Between TRA and 2CC it makes up 40% of my portfolio. Suppose used cars is just as good as any place to hide in a recession..
A Q&A with Todd and Aaron Saunders (Group CFO) has been arranged for Auckland Branch members of NZSA next Wednesday. This sort of happening/company visits are a real benefit of membership of NZSA, and always interesting.
https://www.nzherald.co.nz/business/...J3I6OEVSLL2J4/
How the ‘Tina from Turners’ ad paid off in a month
Quote:
Tina from Turners has helped Turners Automotive Group buy and sell more used “cars, cars, cars” - so many that it paid off the company’s $300,000 ad campaign within one month.
The award-winning campaign, starring comedian Sieni Leo’o Olo as ‘Tina’, encouraged New Zealanders to sell their cars for cash through the re-seller Turners, instead of independently through platforms such as Facebook Marketplace.
“It has been unbelievably successful,” Turners chief executive Todd Hunter told Markets with Madison.
“We can see it in the business metrics. That campaign paid for itself in month one, which is pretty unheard of.”
The initial advertisement cost $300,000 to create and air in media - more advertisements were in the works.
Just back from the Turners presentation to the Auckland Branch members of NZSA. A good business on a very solid footing in my opinion.
This share is not currently included in the NZX 50 index BUT is now the 47th largest company on the NZX by free float market cap as at 20 June 2023. Not sure where Todd sourced this particular statistic but I have no doubt he will be correct as management will be following this circumstance. Previously TRA has been reported as being just outside the index inclusion cut off so I imagine TRA is now next in queue when the Index is up for the regular quarterly rebalance.
So if you have been agnostic about this share in the past but are persuadable then buying in doesn't seem to have a lot of downside risk just now.
Thanks Ronaldson, would they have the liquidity to be in the nzx50?
Yes, excellent presentation today by Todd and the team. I spoke to Todd about index inclusion and he doesn’t think liquidity is an issue. I think it is a matter of when not if. They have done well given the current environment and when the economy turns, I think that they will catch a significant tailwind. In my view there is very little down side to this business, as long as interest rates don’t move higher. They have indicated that they are performing ahead of expectations for the current financial year and I think that we will all look back at $3.60 per share in a year or two and feel that it was an absolute bargain.
Disc: substantial holder
Agree with Alekhine's post above. I believe index inclusion criteria takes account of "free float" only and that all shareholdings in Turners qualify as such.
The last Annual Report, for FY23, indicates a spread of over 4800 shareholders. The Chairman, Grant Baker, has 7.44% via Montezmolo Holdings Limited, Director Alaister Petrie 12.24% via Bartel Holdings Limited and Director Mathew Harrison 7.47% via Harrigens Trustees Limited and other family interests. These shareholdings may be both beneficial or as trustee. Even Todd Hunter, CEO, has almost 1% so there is plenty of skin in the game.
Another lot of Directors jumping on the gravy train craze and wanting big pay increase
That Strategic Pay outfit must be creaming it these days …….changing a few numbers in a standard template at regular intervals and no doubt charging an arm and a leg for ‘coming up’ with a good number
Another NO vote from me ..but they won’t care
http://nzx-prod-s7fsd7f98s.s3-websit...114/398950.pdf
Sounds like they are taking a page from the McKinsey playbook......
First thing they say are the board/senior management are underpaid and behind the market etc.
So they keep getting employed and those hiring them know what they are going to say.
No, no, no, I'm not a cynic! :huh:
did us shareholders get a payrise this year? i dont really follow the dividends tbh, its just money that turns up in my account.
I read the 17 page report from Strategic Pay. I don't begrudge some increase but will vote against the proposal for a 38.3% increase to $920k in total.
While I have proxied to NZSA under all hats for holdings I manage I will take back the proxy in this instance and vote NO. Of course, I don't know what NZSA are intending to do currently so that may not be necessary. I will wait and see.
Might be different if Tina was getting a 38.3% payrise too......
When they sent the notice of ASM in 2018 saying they need a pay rise the TRA share price was $2.91
Share price up 24% since then ….and they want a 38% pay rise …whose kidding who
NO from me
Trusty old RBNZ inflation calculator says $665k in Q3 2018 is now $799k
Using the Wage Inflation bit it $824k
And they want $920k
Somebody mention greedflation or similar term the other day
But Strategic Pay say they deserve it and of course top calibre people as well
DRP Launched....
https://www.nzx.com/announcements/415399
A nice DRP day for shareholders, 3.60/3.54 = 1.7% brokerage free return for clicking a few buttons is not too shabby.
TRA have shown in the past they are capable of applying capital for good value - so hopefully the uptake of 420,981 shares, not paying that ~$1.5m will grow the company well into the future.
yes & hope they put the reinvested capital to good use as it is quite dilutive otherwise - if DRP participation rates continue (BOE ~25% elected the DRP), and all else equal, that equates to an annualised increase of shares of about 1.9% (0.48% for this quarterly dividend). 25% a strong take up of the DRP. I'm sure they will put it to good use but its something they should watch and flick off if they can't generate a return on it for whatever reason in the future, IMO.
Turners ROE has ben reasonably consistent over the years
From FY16 to F23 shown below (calculated on avverage equity over year)
FY16 12.4% 11.7% 12.1% 10.3% 9.3% 11.8% 12.9% 12.4% (FY23)
My family trust finally commenced an initial small holding today with a fill at $3.57. It has been ex the quarterly dividend since 10 July, but the market today has treated it as if the actual payment needed to be reflected.
Time will tell if share price growth can be achieved, but meantime happy with the tax paid yield.
You have only taken 2 data points. What was it compared with 2013?
Also you are comparing apples with oranges. Is your wage award linked to the EPS of your firm or the complexity of your task and the skillset your provide?
P.s I am not here to defend them to the death, just being as pragmatic as I can be. I have little skin in the game, am a shareholder, but have only a small holding now as I switched to 2cc a few months ago.
In 2013, they were a finance company called Dorchester so not that comparable. I matched the time period you used which seemed reasonable, 5 years.
Surely long term EPS growth is the best way to measure director results? They are employed to sustainably grow the company over time with good judgement not for any specific skillset.
I think they have done pretty well btw as the growth in EPS shows, but a 38% increase is excessive.
I also own both 2CC and TRA. Was surprised by Todd's claim that "It wasn’t seeing a significant shift to purchasing electric vehicles in the second-hand market because it had few on hand - Hunter said imported EVs were difficult to source [from] Japan" when 2CC are doing exactly that and EVs are already 50%+ of 2CC sales.
With the July 1 increase in tax subsidy for second hand EVs you could argue that Turner's directors were asleep at the wheel while the market was changing. Their strategy of relying mostly on the NZ market to supply cars to sell is starving them of EVs.
Happy to bank another juicy qtr divvy, very handy in current climate of rising costs
Lets look at facts;
Turners say they have 7% of the market and they currently hold 5% of market inventory (about 3500 cars) while 2CC hold just 500 cars.
Lets also put some actual numbers to this using inventory of cars today
NZ Market; 3.4% EVs 2418/71218
Turners; 2.8% or 101/3636
2CC; 3.7% or 21/574
BTW, 3.4% market inventory should be termed "few on hand". Turners need ~120 vehicles to match the market while 2CC need just 16, they have 21, so 5 EVs are very few cars to change the stats.
2CC have recently increased their total inventory from 430 just 2 weeks ago to 574 today, so may have taken a new delivery of 21 EVs, ie their numbers are too small to be reliable for a detailed comparison.
This shows no significant difference between the NZ market, Turners or 2CC
One of those car carrying ships came into Wellington the other ….probably full of new cars
Another 3 due in August
Turners strategy is to buy their cars in NZ from fleet/rental sales and from the public (thanks Tina). TRA's size and scale give them an advantage here. Kiwis prefer NZ new cars so this has been a successful strategy and worked even better over COVID when importing and travel was expensive and difficult.
2CC strategy is to source their cars in Japan and import them. 2CC have built up their own operation both in Japan and at the port to select, buy, import and process these cars as efficiently as possible. 2CC's co-founder is Japanese which obviously is an advantage.
Both are good strategies that work best at different times.
As Todd says a very small % of NZ's car fleet is electric so Turners naturally have very few cars to choose from. This will improve in 3-5 years time.
In the meantime, 2CC EV sales is already over 50% of that 574 car stock, say 300 cars. This will continue to increase until competitors both fellow importers and those reliant on NZ sourced cars catch-up.
The government's July 1 EV subsidy change provides rocket fuel to the 2CC strategy and is a headwind for Turners. Why not get a 3.5k discount off a second hand car?
A quick look at the cars for sale on both companies websites confirms 2CC sourcing strategy is winning for the most in-demand market segments (EVs and Hybrids) and likely will continue to do so for 1-3 years.
What is going to happen to all those petrol engine cars in the next 1o years? The crusher?
what is the life cycle of a petrol or DS car in the next decade? Not a car expert. Got 3 push bikes... and all in this tribe have push bikes...
I really don’t want an electric car due to personal reasons. I don’t believe I’ll be the only one. I won’t be one without a petrol car unless the government make it impossible to own one. I will be one person sourcing a combustion engine car for the next 20 years.
Ford's EV strategy didn't go to plan. So they are diverting to a hybrid strategy. Personally I blame it on the mustang that looks like a homer mobile. On a serious note, extra weight severely impacts the range. So the E150 can't be considered a serious work ute unless people are assured of the range.
Oh, Hybrid is therefore the big mover in the Car and UTE category?
Some country's have already introduced or are looking to float the idea of only EV by such and such a date. This likely to be a failed approach then? And the hybrid likely to be the goto for the next decade and more...
Don't know what the future holds. Just observing what has recently happened to Ford. Perhaps hybrid is a stop gap measure until EV technology is more robust.
Personally I would like to see a world moving away from fossil fuels. But the difficult thing is how much of a compromise to cost, benefits, productivity, lifestyle etc are we prepared to accept. I say it is difficult. The EU have convinced themselves gas is a green fuel and we saw what happened when it was switched off. The choice between order and anarchy. Each country has the same dilemma. Note Sweden has backtracked on their climate strategy. Apologies I am going on a tangent but it feels like a prisoner's dilemma amongst nations.
Idea of the week - Turners should license Tina to the National Party for election advertisements - no change of clothing required, just the logo.
"You know what I like - Votes Votes Votes "
Would be brilliant!
Hey Todd, if you are reading, can you please clarify why directors are seeking to get their directors increases backpaid to 2013? In the NOM explanatory notes it says:
Resolution 5
This resolution proposes to shareholders that the pool for Directors’ fees be increased from $665,000 to
$920,000 per annum per financial year, with effect from the financial year commencing 1 April 2013.
Post was in error.
Like you ronaldson, I don't begrudge the directors some increase. But I will also be voting 'NO'.
The particular bit I didn't like in the 'Strategic pay' report was on page 10.
"Strategic Pay Limited's annual NZ Directors Fees Survey of February 2023 continues to indicate that between 25% and 40% of larger commercial companies pay separate committee fees (Among large Australian companies this is the norm). We support this unbundling practice as a means of tracking and rewarding actual workload and responsibilities and providing greater accountability and transparency."
This sounds like Strategic is thinking of directors as 'employees' of the company. They are not. They independent professionals who are already being paid very handsomely for their contracting work putting their wide work history experience to use in governance matters. If they don't like their pay rate they can leave (curiously in my decades of following the market, I cannot recall a single director leaving any board for that reason).
Australia is a different environment where the highly paid are on higher tax rates than in NZ (45% for incomes of $180k or more, vs 39% for NZ). So we could argue that Australia is just 'equalising' for that. Nevertheless, I am happy for NZ companies to use Australian directors fees as a reference for pay rates, provided they do the same for their own company workers within NZ (which I think puts an end to that argument).
Unless things go very wrong, a governance roll is normally ticking boxes that have already been filled in by other professionals who have already been highly paid in their own right. IMV, governance should be about 'the big picture', not shuffling through the minutiae of business deals on a 'paid per hour' basis. Let the employees of the business do that job.
I notice the StrateicPay review also said on p12:
"Finally since our recommendation involves large percentage increases, you may choose to stage the increases over two years rather than adopting the full adjustments immediately."
The board seems to have gone tone deaf on that suggestion.
SNOOPY
Even thou I am an ACT supporter in real life I was very disappointed no one responded to my post above. The possibilities are almost endless!
Snoopy - Yes, agree. I have now proxy voted all three holdings over which I have control (including the shares acquired under #7869, now vested) against the motion to increase the director fees. No remorse here.