Edited Transcript of TNR.NZ earnings conference call or presentation 17-Jun-20 10:30pm GMT

Jul 15, 2020 (Thomson StreetEvents) — Edited Transcript of Turners Automotive Group Ltd earnings conference call or presentation Wednesday, June 17, 2020 at 10:30:00pm GMT

* Aaron D. Saunders

Good morning, everyone. Hopefully, everyone can hear me okay. [John Boland], I noticed that you’re on the call. Would you mind just hitting your raise-hand button at the bottom of your Zoom screen? It’s all right. Thank you very much. Let’s go. I mean you can hear me? Thank you.

Welcome, everyone. We’ll keep cracking. So this is the first time we’ve run the call via Zoom, and hopefully, you obviously had a fair bit of experience on the platform over recent weeks. So we thought it was a good idea to try and do it this way. So welcome. Here with me today, you’ve got Aaron Saunders, our Chief Financial Officer; and Barbara Badish, our Group Financial Controller.

So we’ll go through the full year results today, and then we’ll open up the call to Q&A. The way we’ll manage that is if you could just raise your hand and we will unmute everyone and you can fire away with your questions as you need to.

Also, I just wanted to bring your attention to the image on the first slide there. So that is the newest branch in the network down in Dunedin, quite a large improvement over the existing branch down there, almost twice the size and located handily right next door to Forsyth Barr Stadium. So if you happen to be down there, go and check it out. We are very happy with the way that branch is trading in the initial 2 weeks since it’s been opened. So as you can see here, it’s looking resplendent in the Turners blue.

In terms of the agenda today, we’ll work through the results. And then really what we want to do is spend a fair bit of time on Q1, so what’s happened since the end of March. I’ll give you a bit of a view on kind of how we — where our focus areas are for the rest of the year. And we can go over the financial results and segment results from last year.

So just moving on to the results overview. Our focus for FY ’20 was very much on organically growing underlying earnings. And given that the last 6 weeks of the year were impacted by COVID, I’m really pleased with the results that we’ve been able to deliver for FY ’20. We have nudged slightly ahead on reported net profit before tax at $29.1 million and delivered strong growth in our underlying earnings, up 11% to $28.8 million. 3 out of our 4 businesses were well ahead of the FY ’19 comparatives on an underlying basis.

And Auto Retail was down, but definitely felt the impact of the slowing used car market and, of course, COVID hurting in the last few weeks of the financial year. Our quality focus in Oxford Finance is delivering very good results. Our claims ratios in insurance continue to trend the right way. And EC Credit Control has had a strong performance off the back of its New Zealand corporate customer relationships.

Our earnings per share down 8% to $0.244 per share, and that is really just a result of the higher effective tax rates in FY ’20.

Just moving through to the results summary now. So the revenue bridge. Revenue is stable compared to prior year. Auto Retail had momentum prior to February, and the COVID-19 impact really offset any gains that we had made. Finance revenues increased due to the increase in origination from the Turners Cars business and other third-party originators. The insurance revenues being down reflect fewer policies sold as a result of those softer market conditions and further tweaks to our risk pricing. And of course, there was the property sale — a one-off property sale within insurance in FY ’19. And EC Credit Control revenue increased — sorry, just slightly down off the back of slightly less debt load overall.

In terms of the net profit before tax bridge, we’ve ended FY ’20 in line with FY ’19, and pleasingly, at the midpoint of our guidance of $28 million to $30 million net profit before tax. And I just wanted to add that really prior to COVID, we were tracking to exceed guidance. The Auto Retail decrease is largely due to the Albany property settlement in FY ’19 of $3.4 million and the COVID impact that we experienced in sort of the later part of February and March. Finance is driven by the writing the higher quality new business and the resulting improved arrears performance. And also want to point out that in addition, there’s been COVID-19 overlay of $1 million that’s been applied to our finance receivable provisioning, and this is to mitigate any potential increase in credit losses over the next 12 months.

The insurance result from FY ’19 includes that $3 million one-off gain from property sale. And we’ve continued to make good gains in claim ratios, which has offset the reduced policy sales. And in FY ’19, we had the corporate brand write-off of Buy Right Cars of $4.6 million, which is some of the gain on FY ’20.

So just moving through to the reconciliation of reported net profit to underlying net profit. As we’ve talked to you all before, Aaron and I have been very focused around ensuring a nice clean set of numbers. And I think we’ve delivered on that. So just 2 small adjustments. We had the money that we spend around the strategic review of Oxford Finance and then some small gains going the other way as a result of the IFRS 16 lease accounting changes. So all in all, a really good year of growth in underlying earnings.

And just to get a view on that across the segments. You can see here, Auto Retail, I mean, that was really the impact of the wholesale auction division, particularly in March, as a result of COVID. The used car market was continuing to soften right through the year on top of that. But we’ve also seen a continued improvement in quality of the Oxford Finance book, which has translated to good growth and earnings. And insurance has benefited from the work on risk pricing in claims management. So despite the turbulence into the year, we feel it’s been a solid year of delivery and results for the FY ’20 year.

So please move on to probably the area that people are really most interested in, which is what’s happened since March. The first thing I’d like to do is really acknowledge the efforts of our team during this time. They’ve been committed, understanding and prepared to go above and beyond in very difficult circumstances. The sudden change brought about by COVID-19 required dynamic planning and execution urgency. And I’m particularly pleased with the speed at which we were able to stand up all our people to work from home, which was a testament to the skills in our IT group, but also a number of the technology investments that we’ve made over the last few years. And I also want to thank those landlords, business partners who have extended their helping hand during the early part of lockdown. It has certainly been greatly appreciated.

Our approach to lockdown was fairly straightforward. So really the first phase we kind of entered to was what we called our react phase, and this was just making sure, given the information that we had and the uncertainty around the length of the lockdown, that we were in a position to survive and in a position to survive, what at that time could have been a 3- to 6-month lockdown. So we took very much a kind of cash is king approach to that.

We then kind of moved through to rethinking. So our primary objective here was getting back trading as soon as we could and in a way that managed our risk. And I guess, the particular focus here was in the finance business. But really, the point in that was we wanted to do anything that we could to avoid a dilutive capital raise. So we had to get our contactless online trading program up and running. We knew that unemployment was likely to rise. So we needed to start thinking about the risk in the finance book. We also knew that strong trusted brands would have a sizable opportunity in a new world order.

And that sort of segues nicely into our third phase, which is kind of where we feel we are now, and that’s very much about rebuilding and focusing on the opportunities. So internally, we refer to this as eyes on the prize, but it will require disciplined cost control. We feel we’ve got a great advantage in terms of leveraging our strong online platform. A number of the digital and technology investments we’ve made have put us in a good position. We plan on continuing to invest in technology where it makes sense. And really, our goal is to keep building our market share across all our businesses.

So April was a very tough month for the business. All 4 businesses experienced substantial drops in new business. Our group revenue overall was down 57% in April versus the same month last year. However, April and May had been significantly better than our early thinking and planning at the start of level 4. And this has largely been due to the fact that as a country, we have moved back to a little one faster than we anticipated. Clearly, the harsher lockdown ended quicker than what we were planning for at the beginning of April. I think the other thing that’s highlighted for us is just how valuable it’s been to have annuity businesses within the group to really help offset the severe decline that we experienced across our retail business during level 4. So I think we’re in an excellent position.

So some early metrics. And what we’ve tried to do here is give some insight into the critical KPIs for the business through March, April and May in this year for how Turners is tracking. So these numbers compare the difference against the prior year apart from the arrears metrics and the group profit numbers in the bottom row. So in Auto Retail, you can see the impact started in March for us, with revenues and cars units down in a pretty material way. And then there was obviously the substantial drop that we expected in April. And we’re seeing good signs of that recovery happening in May and then sort of an even, sort of better recovery picture in June.

New lending in Oxford was obviously impacted least in March, and largely, that’s because of the focus on retail, whereas the Turners business still has a wholesale kind of auction component to the business. So impacted less in March, but has bounced back really strongly in May and, currently in June, is performing well above the expectation. And just to put some further context around that, we’ve tightened up our credit criteria substantially sort of in the April, May, June period. So actually, that sort of gain is even better in that context.

One thing that we probably didn’t expect was the improvement in arrears. And interestingly, arrears has been a significant beneficiary of the lockdown. So around half the improvement in arrears, from 8.5% to 6.8% is due to people making more payments as a result of the discretionary income levels going up over level 4 and level 3 lockdown. And that’s certainly because people haven’t had the opportunity to spend money like they were pre-COVID. The remaining improvement is due to the capitalization of arrears and the restructuring of loans from customers who have gone into deferred payment holidays over that time.

What we are really pleased about is that over 95% of the people that we’ve put into payment holidays, so that was a mixture of 1-, 2-, 3-month payment holidays, 95% of those customers have returned back to making normal payments once the payment holiday period has expired. And the 5% of roughly who haven’t, they’ve simply asked for a small extension to their time.

Moving on to insurance. So those new policy sales really reflect a level of activity in the used car market, and the claims lodged have reflected a similar pattern.

Credit Management. So March, we recorded flat in terms of revenue. Then we started seeing the impact of the levels of new debt that were being loaded. So most of our large corporate customers within government, financial services, utilities have stopped their collection work to manage their reputational risk over that time.

As you’d expect, we’re having conversation with these customers, and it looks like their stance will start relaxing in July. Interestingly, what it did highlight to us through that lockdown period was it was actually quite a strong annuity portion to the revenue in EC Credit Control, and that’s due to the number of payment arrangements that they have in place where people will be paying debts. And those eventually, those payment arrangements, unlike the arrears, in Oxford have actually held up remarkably well.

So what is it that will translate to in terms of bottom line? So group operating profit was just over $1.2 million in March. And clearly, that was sort of a subpar result due to the COVID impact, particularly in Auto Retail business. And as you can see, due to the trading deals that was materially impacted through April, we’ve seen strong signs of that recovering in May and would expect to see things improve through the — based on what we’re seeing around KPIs in June. So I think all in all, we’re cautiously optimistic, but conscious that wage subsidies and things roll out or roll off over June, and we’re yet to see the sort of wider impact of that.

In terms of our near-term priorities, really, I’m not going to go through each of these. I mean I would imagine they’re reasonably obvious for most people. The one I do want to draw your attention to is the fact that we will be exiting our main Penrose supersite. So that’s a site we leased from Goodman’s and Penrose. So we’ll be exiting that site in December this year. And it’s really about the sort of retail transition that we’re making in this business. The fact that more and more of our customers are spending more and more time researching online, and really we need to be closer to our customers and provide a better retail experience once they come to our physical sites. So that’s very much about further execution around our retail transition. So effectively, the retail business trends — transfers into these new sites that we’re sitting up in Westgate and Mt. Richmond.

And obviously, in all our businesses, digital initiatives are being prioritized, as is disciplined cost. So — and in finance and insurance, we’ll keep adjusting our risk appetite and look for other areas of distribution in both of those businesses.

So just moving through to sort of our key themes for the rest of the year. So 5: opportunity to accelerate market share, leverage the high trust Turners brand, the value of a diversified business, leveraging our digital advantage and the balance sheet capacity which supports growth. So let me just quickly go into each of those.

We feel we’re very well placed to continue the market share gains we’ve made over the last few years. We expect the number of dealers operating in the market to reduce further in this post sort of COVID environment. And the reference point for us is the GFC, where we saw a decrease of around 15% in registered dealer numbers. So with new and revamped sites we have coming on stream, our retail experience will continue to improve and help lift the number of retail sales we are able to make. So we are absolutely looking to keep transitioning wholesale transactions into that retail segment for us.

Some of you may have seen that Turners has just been voted as the winner of the Reader’s Digest most trusted used car business in New Zealand. And we know from our own research how highly the Turners brand is trusted and now is the time to reinforce and leverage that position. And people will revert to known and trusted brands in turbulent times. We feel this is the opportunity to really keep us front of mind with our consumers and really leverage the scale we have to reach customers, to keep promoting this business and particularly do smart things around our purchasing.

Tuners is diversified geographically through New Zealand and has the advantage of annuity revenues from finance and insurance to help offset that short-term decline and the activity-based revenue businesses of Auto Retail and Credit Management. We’re also expecting our Credit Management business, EC Credit Control, to experience high growth over the near to medium term. And just to give you some sense, so that post you see in a couple of years after EC Credit Control revenues doubled over that time. Geographical diversification allows the retail business, in particular, to redeploy inventory if there are any localized lockdowns going forward or just regional differences in demand, which is something that we have done a lot more over the last, particularly, 6 months. And with a business model setup for consignment sales, Turners is able to heavily increase its mix towards consignment, which significantly reduces the working capital requirements on inventory.

We remain committed to creating competitive advantage from technology investments and will double down on these efforts to further broaden our technology advantage. We have a sizable and very capable team. So focus, particularly sort of around digital marketing and 2 key data projects. So we’ve created this customer data platform, which allows us much better online lead identification and management and of the automated communications that flow from that. And we’ve just signed off on a data research around some automated machine learning to help us predict vehicle profitability when we purchase vehicles and also to drill down into our credit defaults and help us lift our performance in that area. So both have very good payback periods and both we see as critical to creating competitive advantage for this business going forward.

Turners is well positioned from a funding capital perspective to take advantage of growth opportunities in the future. The group continues to operate well within its banking covenants. And in March, BNZ extended our securitization facility from $200 million to $250 million. But it’s worth reminding shareholders that over 2/3 of our debt relates directly to finance receivables, and this business is well capitalized, meaning further growth can be supported from the existing capital base.

Now moving through to the financial results for FY ’20. So just quickly on the snapshot, revenues were stable. And as we have covered, there was strong growth and underlying profits in earnings per share, down 8%, as a result of the effective tax rate in FY ’20.

In March ’20, the Board deferred the Q3 dividend payment as a cautionary step due to the uncertainty surrounding the length of the level 4/level 3 lockdown. Now that we have April and May behind us and a better understanding of how business is tracking, the Board has declared a final fully imputed dividend incorporating the Q3 deferred dividend of $0.06 per share, resulting in full year dividends of $0.14 per share. The Board believes this level of payout best ensures our ability to navigate the volatility and also the optionality to take advantage of any upcoming opportunities. The Board’s intention at this stage is to continue dividend payouts at level of the current policy for FY ’21, which is 60% to 70% of net profit after tax.

The first thing to note on the balance sheet is a lift in cash, which was a result of our preemptive lockdown cash drawdown. And that cash drawdown is now subsequently being repaid. Inventory also reflects the COVID-19 slowdown and the lockdown in March. The change in finance receivables reflects quality growth in Oxford Finance, offset by the rundown in the MTF nonrecourse ledger; and property, plants and equipment increases due to the development of new sites in Whangarei, North Shore and Mt. Richmond purchase.

We believe Turners’ funding remains at conservative levels. Turners’ borrowings are $350 million, of which we have $75 million undrawn — or $78 million undrawn in the facilities. The increase in securitization warehouse reflects Turners Cars origination being directed into Oxford and away from MTF. And the securitization funding facility limit is now $250 million.

Let’s just move through to the segment results now, starting with Auto Retail. So in a softening market, the Auto Retail business, we think, has actually performed really well. Our retail market share has continued to grow, and the retail sales is stable with FY ’19, despite the market being soft and despite that impact of March with COVID. Unit sales of our owned stock were up 8%, with average gross profit up 12% on those units. We have done a really good job of increasing our margin through the year. It was around 26% less consignment stock from lease and other consignment vendors, really due to a cyclical uplift in FY ’19. And we had the successful transition of Buy Right Cars into Turners Cars and the integration into the full Auto Retail business, which has been now fully completed and we’re very pleased with.

We have a nice little lift in damaged vehicle units as well, up 12%, due primarily to a hailstorm at Timaru. Our average Net Promoter Score has continued to lift. So we know we’re giving a good customer experience with a significant improvement up over FY ’19.

I’ll have to say, considering the finance result being the key result of the group for FY ’20, our strategy of implementing a 3-tier risk pricing model and combining comprehensive credit reporting metrics with the traditional negative reporting has worked very, very well. And it’s helped us improve the risk profile of the book, particularly over the last 9 months. The improvement in credit underwriting standards has unsurprisingly led to improvement in arrears and better underlying performance. And in particular, the Turners Cars origination has ramped up really well and will continue to grow off the back of higher retail sales in their business. Since April, we’ve closed off the bottom risk bucket of lending. So that’s what we call Tier 2. And we see a good opportunity to keep investing in technology to help build our competitive advantage even further.

In insurance, we’ve continued to improve our underwriting standards. However, sales and policies are definitely there for the line with softer used car market. The partnership struck with MARAC has given us a blueprint for more of these integrated system and distribution arrangements, and we now have a pipeline of these opportunities building. We’ve been pleased with further improvements in our claims loss ratios as a result of better pricing, procurement and smarter claims management. Technology investment, particularly in a system integration level with the use of APIs we see is a key competitive advantage.

In credit management, our segment profit is up 3% over FY ’19, largely as a result of the increased debt collected and the commission we earned from those. This is largely down to the improvement and debt collected on behalf of New Zealand corporate clients. I’m also very pleased with the uptake from SME customers connecting to easy credit through Xero and MYOB and looking forward to improve the traction on this.

We’ve covered the results overview. So I’ll just get through to the outlook. Unsurprisingly, due to the level of unprecedented uncertainty in the economy, it will be difficult to issue guidance for FY ’21 at this point. We will update over coming months with progress and plan to give guidance around the AGM in September.

At the beginning of lockdown, we modeled out 3 scenarios. We took a worst, likely and best case. And we’re currently tracking above the best case. April and May have been significantly better than what we expected, as we’ve moved through the year alert levels faster. The benefits of cost focus, rent reductions and wage subsidies have been material. The offset of having annuity revenue businesses, particularly finance and insurance, within the group are proving very valuable at this time.

Thank you, everyone, and we’ll now open up for questions. (Operator Instructions) Okay. Christian, can we start with you?

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Questions and Answers

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Christian Bell, Jarden Limited, Research Division – Research Analyst [1]

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Firstly, just looks like a pretty good result. So well done. It seems like you’ve weathered the storm pretty well. But I was just looking at the Auto Retail sort of things. Just at an underlying operating profit level, a slight softening there. I was just wondering if you could talk to that a little bit. Is it sort of because there’s 6 weeks of COVID, continuing to pay salaries and stuff like that without getting the revenue to make up for it?

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Aaron D. Saunders, Turners Automotive Group Limited – Group CFO [2]

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Yes, that’s right, Christian. I mean, essentially, inquiry levels started dropping from the middle of February and it became very difficult to do any business once the move to Level 4 had been announced late in March. So essentially, probably cost us 10% to 15% in February and significantly more than that in March. So the business was tracking pretty well before that. My estimate is that we would have been in line with last year, not from — at end of the year.

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Christian Bell, Jarden Limited, Research Division – Research Analyst [3]

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Cool. And then just thinking about finance. So the premium tier risk now accounts for 11% of the total book. Just wondering, like, do you guys sort of have, like, a target level of the compensation of how much premium we’ll end up making, what it’s like you’re sort of going?

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Todd William Hunter, Turners Automotive Group Limited – CEO [4]

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I think it will end up being kind of somewhere between 1/3 and 1/2.

[Josephine], have you unmuted yourself? I think if you unmute yourself, you’ll be able to ask a question if you want to. Or we can move through to Jack?

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Unidentified Analyst, [5]

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First one from me, I guess, if we kind of look at where you’re trading more recently, I guess, it seems just the way that maybe we’ll have some impact from kind of level 3 in there, but it’s only kind of 35% or so down on last year and you’re circling that kind of trend actually up on a year-to-date basis on the prior year. I guess is there any color that you can provide on the extent to which kind of short-term rent relief or kind of wage subsidy kind of contributions that you’re getting at the moment kind of supporting that? And if there’s kind of an underlying decline that we should be thinking about at the moment once those type of things kind of roll off? Or is it a fair assumption that things have reverted back to relatively normal levels from a trading perspective?

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Aaron D. Saunders, Turners Automotive Group Limited – Group CFO [6]

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Good question, Jack. I guess the way I look at it is take April, May and June together, and the business won’t have recovered the lost ground from the lockdown. The operating profit numbers we provided excluded any wage subsidy, and the rental relief has been around about $250,000 a month. So that is included in there. So that essentially lasts through April, May and June.

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Unidentified Analyst, [7]

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That’s very helpful. Next one from me, I guess, just thinking about the way that you guys have previously flagged, consignment sales could be one helpful uplift with the kind of vehicle repositions that potentially get [out of the door] that could be quite significant. Just wanted to kind of tease out the commentary around FY ’20 in the soft consignment sales? Is that purely just cycling kind of a strong comp last year, but with an outlook that’s now been same in consignment sales? Or…

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Todd William Hunter, Turners Automotive Group Limited – CEO [8]

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That’s right. Yes, so in FY ’19, we had one lease customer who had a very large retail (inaudible) 1,200, 1,300 units.

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Unidentified Analyst, [9]

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Got it. Yes. And then third, are you guys starting to see that kind of consignment uplift come through? Or is that kind of more something you think that comes to fruition if we see a kind of a broader macro downturn from here that provides some kind of downside protection, but may or may not kind of be something that is a real loss?

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Todd William Hunter, Turners Automotive Group Limited – CEO [10]

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I think we’ve seen a short-term lift. I suspect that part of that will be just backlog. So consignment units are definitely up at the moment. I think the transition kind of happens over the — over time. So I would put that mostly down to the fact that it was a lockdown and nothing happened.

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Unidentified Analyst, [11]

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Got it. Okay. That makes perfect sense. And then just kind of thinking about from a balance sheet perspective. Obviously, it’s kind of sitting with that $30 million or so of cash at the end of the year. Could you talk about, I guess, your approach, kind of as things seem to have normalized somewhat, but still with considerable uncertainty out there in terms of what you’ve done with that level of liquidity as well as maybe just some color on, I guess, there’s reference that with finance book within that, you think there’s sufficient capital that provides the room to grow? I suppose, would be interested to get a bit of a sense about kind of how many years’ growth, do you think, kind of sits in your current capital position in your finance book? Or kind of how much downside protection you’ve got if you were to see a kind of an uplift in [defaults occur]?

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Aaron D. Saunders, Turners Automotive Group Limited – Group CFO [12]

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Yes, the way I look at that, Jack, is currently in Oxford, we have equity of 22%. So equity is share capital, retained earnings to total assets. And the primary vehicle for growth is that securitization facility, which has a minimum equity requirement from us of 8%.

So we have a fairly significant cushion for either an increase in arrears or a reasonable sort of growth path over the next couple of years. So I don’t anticipate that we will be needing to put in any further capital into Oxford in the foreseeable future. And it’s probably likely that we’ll be able to take some out, but we’re being a bit cautious about that until we see how the wider economy plays out.

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Unidentified Analyst, [13]

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Got it, makes sense. And just from the context of having a pretty significant cushion there, your kind of cash levels now have reverted back to normal levels, because you’ve got the comfort of maybe existing undrawn facilities or what are you kind of…

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Aaron D. Saunders, Turners Automotive Group Limited – Group CFO [14]

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That’s right. I mean our banks have been great, very supportive, very interested in how the business is tracking, obviously, because vehicle sales, in particular, are a lead indicator. But yes, essentially, we’ve spent the last sort of 4 or 5 weeks deleveraging, paying down facilities, because we’ve got, I guess, the comfort of the fact that the businesses are all open and trading now and the banks have been very supportive.

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Todd William Hunter, Turners Automotive Group Limited – CEO [15]

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Is there anyone else who’d like to ask a question. If you would like to ask a question, just hit the raise-your-hand button, and I will try and unmute you. All yours, [Andrew].

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Unidentified Analyst, [16]

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Just coming back to your outlook statement. Like, are you anticipating — I’m assuming that for ’21, you’re not expecting profit growth on what you just delivered in ’20 under your sort of — even though you’re tracking above your best scenario. Is that fair?

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Todd William Hunter, Turners Automotive Group Limited – CEO [17]

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Yes.

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Unidentified Analyst, [18]

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Okay. And then just related to the second bullet point where you’ve got your worst, likely and best. Are you able to just give us a sense, like, in the context of which will be difficult for us to kind of assess independently, like, what the sort of variances, on-site impairments or — within that business in terms of how your modeling is paid out?

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Aaron D. Saunders, Turners Automotive Group Limited – Group CFO [19]

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Yes. I mean, I think bearing in mind this was a worst-case scenario prepared early to mid-April when things were looking quite bleak, our modeling was for a tripling of the unemployment rate, which would result in roughly a doubling of arrears, and in over time, a doubling of credit losses. The difference between that and best case is best case assumes a further reduction in arrears and a consequent reduction in credit losses over time. So it’s quite a wide spread between those 2 sets of results. But I think our sense now is that there has been quite a deleveraging across the economy and people have used some of that surplus disposable income to pay down debt, which has certainly helped us. And I guess we sort of enter into this, the next stage, which is as the wage subsidies roll off and perhaps as redundancies start to increase across the economy, in a much better position than we were at the end of March, [Andrew].

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Unidentified Analyst, [20]

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Okay. No, that’s helpful. And I’m just assuming, if I can just ask one further question. When the Board, I guess, declared the final dividend, was that more of a reflection of the fact that the last couple of months are better than expected, and hence you’re sort of distributing some of that? Or is it more a reflection that your probability on the worst case in terms of avoiding a dilutive capital raising, which you sort of signified early in the presentation, the probability on that has obviously dramatically reduced? Or both?

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Todd William Hunter, Turners Automotive Group Limited – CEO [21]

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I would say both. I mean — yes, I mean, we’re looking to ensure that shareholders get some reward for the year we’ve just had. We deferred — I mean they deferred the Q3 dividend, because at that time, everyone was uncertain about what was kind of coming at us. So yes, I would think, that’s a long way of saying you, both.

Okay. If anyone else would like to ask a question? Okay. I think we’re — it seems like we’ve come to a natural conclusion here, given the lack of raised hands. Okay. Well, we’ll wrap it up there. Thanks, everyone, for coming on the call for listening. If you have any further questions or something comes up, please get in touch with Aaron or I directly. And we’re very happy to take your questions from you. Enjoy your day. Thanks, everyone.

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Aaron D. Saunders, Turners Automotive Group Limited – Group CFO [22]

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Thanks, everyone.

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Todd William Hunter, Turners Automotive Group Limited – CEO [23]

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Thank you.

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