New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Vehicle sales fell by -2% versus the prior comparable period to 3,010</li><li>finance penetration improved to 39% from 31%</li><li>Management continues to describe consumer demand as subdued and price sensitive.</li></ul>

Vehicle sales fell by -2% versus the prior comparable period to 3,010finance penetration improved to 39% from 31%Management continues to describe consumer demand as subdued and price sensitive.

Turners (TRA) - 2 Cheap Cars Group ASM Trading Update Comments

<ul><li>The June 2026 quarter was a mixed one for New Zealand’s used vehicle market, showing a continued improvement in used vehicle registration momentum, while transaction activity remained broadly flat year on year and pricing conditions were subdued relative to a strong end to FY26.</li><li>Our proprietary web-scraping data suggests Turners Automotive (TRA) experienced a softer start to FY27, broadly consistent with management commentary at its FY26 result, with Auto Retail prices resetting materially lower, reflecting both seasonality and a still-cautious consumer.</li><li>We reduce our TRA target price by -5cps to NZ$8.30, reflecting the inclusion of post-balance-date dividends following TRA’s FY26 result (released May 2026) and modestly lower peer multiples.</li></ul>

The June 2026 quarter was a mixed one for New Zealand’s used vehicle market, showing a continued improvement in used vehicle registration momentum, while transaction activity remained broadly flat year on year and pricing conditions were subdued relative to a strong end to FY26.Our proprietary web-scraping data suggests Turners Automotive (TRA) experienced a softer start to FY27, broadly consistent with management commentary at its FY26 result, with Auto Retail prices resetting materially lower, reflecting both seasonality and a still-cautious consumer.We reduce our TRA target price by -5cps to NZ$8.30, reflecting the inclusion of post-balance-date dividends following TRA’s FY26 result (released May 2026) and modestly lower peer multiples.

Forsyth Barr Vehicle Digest: Edition 13—Pricing Takes a Turn

Event-Driven

<ul>
<li>2 Cheap Cars (2CC) has this morning received a takeover notice from Sena &amp; Co, its ~76% majority shareholder.</li>
<li>This does not constitute a formal takeover offer (yet), but is priced at NZ$0.80 per share, and represents a +21% premium to the 9 July closing price.</li>
<li>The offer values 2CC at ~11.4x FY26 group earnings, a material discount to Turners Automotive Group (TRA), which currently trades at 20.9x trailing earnings.</li>
</ul>


2 Cheap Cars (2CC) has this morning received a takeover notice from Sena &amp; Co, its ~76% majority shareholder.
This does not constitute a formal takeover offer (yet), but is priced at NZ$0.80 per share, and represents a +21% premium to the 9 July closing price.
The offer values 2CC at ~11.4x FY26 group earnings, a material discount to Turners Automotive Group (TRA), which currently trades at 20.9x trailing earnings.


Turners (TRA)—2 Cheap Cars (2CC) Takeover Notice

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Peter Warren Automotive Holdin / Equity Capital Markets

Peter Warren Automotive Holdings Limited (PWA) aims to raise around US$200m in its Australia IPO. PWA is an automotive dealership group in Australia. It operates 17 dealerships across Sydney, Northern New South Wales and Southern Queensland. The company offers 27 vehicle brands and operates 70 franchises. PWA represents 18 of the top 30 brands in Australia.PWA gets the bulk of its revenue from new car sales, and it managed to come out of COVID-19 with minimal impact to earnings. Revenue was down 3.34% in FY20 (period ending Jun 20) while NPAT was flat. It also registered a strong rebound in 1H21 with revenue increasing by 6.86% while NPAT was up 4.9x. On the flip side, PWA has a small market share in a highly fragmented market and its organic growth appears to be slow leaving it dependent on M&amp;A for future growth.  In addition, while the offering is being advertised as being a primary offering, most of the proceeds will go to the two controlling families, along with a chunky pre-IPO dividend. In terms of valuation, PWA has been priced at a discount to Eagers but ahead of Autosports. Looking at its past performance, the stock should trade at a discount to Eagers, and hence, in our view, it offers little upside from the IPO pricing.

Peter Warren Automotive Holdings Limited (PWA) aims to raise around US$200m in its Australia IPO. PWA is an automotive dealership group in Australia. It operates 17 dealerships across Sydney, Northern New South Wales and Southern Queensland. The company offers 27 vehicle brands and operates 70 franchises. PWA represents 18 of the top 30 brands in Australia.PWA gets the bulk of its revenue from new car sales, and it managed to come out of COVID-19 with minimal impact to earnings. Revenue was down 3.34% in FY20 (period ending Jun 20) while NPAT was flat. It also registered a strong rebound in 1H21 with revenue increasing by 6.86% while NPAT was up 4.9x. On the flip side, PWA has a small market share in a highly fragmented market and its organic growth appears to be slow leaving it dependent on M&amp;A for future growth.  In addition, while the offering is being advertised as being a primary offering, most of the proceeds will go to the two controlling families, along with a chunky pre-IPO dividend. In terms of valuation, PWA has been priced at a discount to Eagers but ahead of Autosports. Looking at its past performance, the stock should trade at a discount to Eagers, and hence, in our view, it offers little upside from the IPO pricing.

2 Cheap Cars Group / Equity Capital Markets

NZ Automotive Investments Limited (NZAI) was listed on the New Zealand exchange via a direct listing on 25 February 2021.
NZAI is a used automotive business operating throughout New Zealand. NZAI’s business is split across two divisions: Automotive Retail and Vehicle Finance. The Automotive Retail division was founded in 2011 and it operates under the “2 Cheap Cars” brand. The vehicle finance division was founded in 2019 and operates under the “NZ Motor Finance” brand.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/191/984/original/image_10740825521614742012828.png?1614742013" class="editor-image img-responsive" data-smartkarma-image-id="191984"></figure>
Over FY18-20, on average NZAI sold 11,092 cars each year at a price of NZ$6,845/vehicle to generate a revenue of NZ$76m. As per management estimates, NZAI had an 8% market share of all imported used vehicles sold in New Zealand, for 12 months ending 31 March 2020.
We have covered various aspects of the listing in our earlier note, <a href="https://www.smartkarma.com/insights/nz-automotive-investments-limited-direct-listing-one-of-the-largest-used-vehicles-dealerships" target="_blank" rel="noopener">NZ Automotive Investments Limited Direct Listing – One of the largest used vehicles dealerships</a>.
Based on our estimates of FY21 earnings and a 60% NPAT payout ratio, the shares are trading at an implied 4% cash dividend yield. Please note that this is for illustration purposes only and has not been calculated with any inputs from NZAI. In comparison to Turners Automotive, its closest peer, the shares are trading at a discount on EV/EBITDA basis, however, the are trading at a premium in terms of p/e and offer a lower dividend yield, based on our estimates.
NZAI’s yield appears attractive in our view, with the potential growth of the financing business expected to provide some future upside.
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 177.05pt;">
(NZ '000)
</td>
<td style="width: 62.95pt;">
FY18
</td>
<td style="width: 62.95pt;">
FY19
</td>
<td style="width: 59.25pt;">
FY20
</td>
<td style="width: 59.25pt;">
6M20
</td>
<td style="width: 58.35pt;">
6M21
</td>
</tr>
<tr>
<td>
Number of vehicles sold
</td>
<td>
    10,919
</td>
<td>
    11,337
</td>
<td>
   11,020
</td>
<td>
     5,859
</td>
<td>
     3,919
</td>
</tr>
<tr>
<td>
Average revenue per vehicle
</td>
<td>
      6,745
</td>
<td>
      6,918
</td>
<td>
     6,871
</td>
<td>
     6,684
</td>
<td>
     7,741
</td>
</tr>
<tr>
<td>
Revenue
</td>
<td>
    73,652
</td>
<td>
    78,433
</td>
<td>
   76,012
</td>
<td>
   39,163
</td>
<td>
   30,418
</td>
</tr>
<tr>
<td>
Gross profit
</td>
<td>
    15,645
</td>
<td>
    14,886
</td>
<td>
   16,875
</td>
<td>
     8,349
</td>
<td>
     6,829
</td>
</tr>
<tr>
<td>
Pro forma EBITDA
</td>
<td>
      7,133
</td>
<td>
      5,943
</td>
<td>
     8,637
</td>
<td>
     4,393
</td>
<td>
     3,950
</td>
</tr>
<tr>
<td>
NPAT
</td>
<td>
      4,392
</td>
<td>
      3,386
</td>
<td>
     4,229
</td>
<td>
     1,884
</td>
<td>
     1,867
</td>
</tr>
<tr>
<td>
 
</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td>
 
</td>
</tr>
<tr>
<td>
Dividend
</td>
<td>
      2,064
</td>
<td>
      4,256
</td>
<td>
        957
</td>
<td>
        532
</td>
<td>
     1,064
</td>
</tr>
<tr>
<td>
Total assets
</td>
<td>
    15,434
</td>
<td>
    18,889
</td>
<td>
   29,413
</td>
<td>
   27,459
</td>
<td>
   30,491
</td>
</tr>
<tr>
<td>
Cash and cash equivalent
</td>
<td>
      5,623
</td>
<td>
      5,024
</td>
<td>
     1,775
</td>
<td>
     5,868
</td>
<td>
     8,304
</td>
</tr>
<tr>
<td>
Total debt
</td>
<td>
      4,066
</td>
<td>
      8,000
</td>
<td>
     7,999
</td>
<td>
     7,439
</td>
<td>
     7,870
</td>
</tr>
<tr>
<td>
Total liabilities
</td>
<td>
    27,629
</td>
<td>
    31,998
</td>
<td>
   39,194
</td>
<td>
   39,250
</td>
<td>
   39,512
</td>
</tr>
<tr>
<td>
Pro forma total liabilities
</td>
<td>
      7,629
</td>
<td>
    11,998
</td>
<td>
   19,194
</td>
<td>
   19,250
</td>
<td>
   19,512
</td>
</tr>
<tr>
<td>
Net cash flows from operations
</td>
<td>
      2,653
</td>
<td>
         467
</td>
<td>
        (56)
</td>
<td>
     3,392
</td>
<td>
     8,577
</td>
</tr>
</tbody>
</table>

NZ Automotive Investments Limited (NZAI) was listed on the New Zealand exchange via a direct listing on 25 February 2021.
NZAI is a used automotive business operating throughout New Zealand. NZAI’s business is split across two divisions: Automotive Retail and Vehicle Finance. The Automotive Retail division was founded in 2011 and it operates under the “2 Cheap Cars” brand. The vehicle finance division was founded in 2019 and operates under the “NZ Motor Finance” brand.

Over FY18-20, on average NZAI sold 11,092 cars each year at a price of NZ$6,845/vehicle to generate a revenue of NZ$76m. As per management estimates, NZAI had an 8% market share of all imported used vehicles sold in New Zealand, for 12 months ending 31 March 2020.
We have covered various aspects of the listing in our earlier note, NZ Automotive Investments Limited Direct Listing – One of the largest used vehicles dealerships.
Based on our estimates of FY21 earnings and a 60% NPAT payout ratio, the shares are trading at an implied 4% cash dividend yield. Please note that this is for illustration purposes only and has not been calculated with any inputs from NZAI. In comparison to Turners Automotive, its closest peer, the shares are trading at a discount on EV/EBITDA basis, however, the are trading at a premium in terms of p/e and offer a lower dividend yield, based on our estimates.
NZAI’s yield appears attractive in our view, with the potential growth of the financing business expected to provide some future upside.




(NZ '000)


FY18


FY19


FY20


6M20


6M21




Number of vehicles sold


    10,919


    11,337


   11,020


     5,859


     3,919




Average revenue per vehicle


      6,745


      6,918


     6,871


     6,684


     7,741




Revenue


    73,652


    78,433


   76,012


   39,163


   30,418




Gross profit


    15,645


    14,886


   16,875


     8,349


     6,829




Pro forma EBITDA


      7,133


      5,943


     8,637


     4,393


     3,950




NPAT


      4,392


      3,386


     4,229


     1,884


     1,867




 






 




Dividend


      2,064


      4,256


        957


        532


     1,064




Total assets


    15,434


    18,889


   29,413


   27,459


   30,491




Cash and cash equivalent


      5,623


      5,024


     1,775


     5,868


     8,304




Total debt


      4,066


      8,000


     7,999


     7,439


     7,870




Total liabilities


    27,629


    31,998


   39,194


   39,250


   39,512




Pro forma total liabilities


      7,629


    11,998


   19,194


   19,250


   19,512




Net cash flows from operations


      2,653


         467


        (56)


     3,392


     8,577





NZ Automotive Investments Limited Direct Listing - Trading Updates

New Zealand

2 Cheap Cars Group Limited retails automobiles. The Company offers new and used passenger cars, utility vehicles, and trucks, as well as provides finance and insurance services. 2 Cheap Cars Group serves customers in New Zealand.

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2 Cheap Cars Group (2CC NZ)

Turners (TRA) - 2 Cheap Cars Group ASM Trading Update Comments

Vehicle sales fell by -2% versus the prior comparable period to 3,010 finance penetration improved to 39% from 31% Management continues to...

Forsyth Barr

Forsyth Barr Vehicle Digest: Edition 13—Pricing Takes a Turn

The June 2026 quarter was a mixed one for New Zealand’s used vehicle market, showing a continued improvement in used vehicle registration...

Forsyth Barr

Turners (TRA)—2 Cheap Cars (2CC) Takeover Notice

2 Cheap Cars (2CC) has this morning received a takeover notice from Sena & Co, its ~76% majority shareholder. This does not constitute a...

Forsyth Barr

Peter Warren IPO - Delicately Poised

Peter Warren Automotive Holdings Limited (PWA) aims to raise around US$200m in its Australia IPO. PWA is an automotive dealership group in Australia.

Sumeet Singh

NZ Automotive Investments Limited Direct Listing - Trading Updates

NZ Automotive Investments Limited was listed on the New Zealand exchange via a direct listing on 25 February 2021. NZAI is a used automotive...

Sumeet Singh

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