The Turners Automotive Group Ltd (ASX: TRA) share price was a standout performer on the ASX today. Turners shares finished 28.24% higher at $2.18 after the group released its full-year FY20 results for the year ending 31 March 2020.

Turners Automotive Group is an integrated financial services group that, as its name suggests, primarily operates in the automotive sector. The group has three main business segments: automotive retail, finance and insurance, and debt management systems. 

Alongside the cornerstone Turners business, the group has a number of brands under its banner, including Oxford Finance, Autosure, and EC Credit Control.

Headline results

Starting from the top line, FY20 group revenue declined by 1% to NZ$333 million. Turners noted that trading towards the back end of the financial year was impacted by the early effects of COVID-19.

Nonetheless, the group delivered an 11% increase in underlying net profit before tax (NPBT), which rose from NZ$26 million in FY19 to NZ$28.8 million in FY20.

The group attributed this growth to gains made in the insurance, finance and credit divisions, which were partially offset by a drop in auto retail due to COVID-19.

Reported NPBT came in at NZ$29.1 million, in line with the group’s guidance range of NZ$28 million to NZ$30 million and flat on FY19 NPBT of NZ$29 million.

Automotive retail

Turners observed a softening of the used car market throughout FY20 due to reduced consumer confidence. Unsurprisingly, this decline was exacerbated during late February and March in the wake of the coronavirus pandemic.

The group highlighted a cyclical reduction in consignment vehicles in FY20. However, this was partially offset by an increase in the sales of owned inventory, with average gross profits per unit up 12% to $529.

Overall, the group’s automotive retail segment delivered revenue of NZ$224.9 million and underlying profit of NZ$13.3 million.

Other segment performance

The group’s finance business, Oxford Finance, delivered marginal revenue growth of 4% to come in at NZ$45.7 million. Operating profit also jumped 10% to NZ$12.2 million. Turners attributed this improvement to writing higher quality new business and the resulting improved arrears performance.

Meanwhile, the group’s insurance arm, Autosure, recorded a 9% drop in revenue as a result of market conditions and focusing on lower risk portfolios and vehicles. Operating profit saw a steeper decline, falling 25% to NZ$6.2 million.

Finally, credit management business EC Credit Control booked in a 1% drop in revenue, while operating profit increased by 3%.

What next?

Looking forward, Turners noted its auto retail business is fully operational, with sales stronger than expected.

The finance segment is seeing arrears performing well, while new insurance policy claims are recovering, with claims tracking below expectations.

On the whole, the group stated that trading in April and May has been “significantly better than what we expected”. This comes as New Zealand moved through its COVID-19 alert levels and the benefits of cost reductions, rent reductions and wage subsidies materialised.

At the end of FY20, the group had net debt of NZ$317.6 million, comprising NZ$32.8 million cash and NZ$350.4 million debt. Turners has an additional NZ$78 million of undrawn funding.

After today’s strong gains, the Turners Automotive share price is down 3.11% year-to-date.

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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According to the latest cash rate futures, the market is currently pricing in a 57% probability of a rate cut to zero next month.

While I’m not convinced that another rate cut is coming, I feel quite sure that rates will be staying at these ultra low levels for the foreseeable future.

This is good news for borrowers, but the very opposite for savers and income investors who will have to live with meagre interest rates for some time to come.

Fortunately, the Australian share market is home to a large number of dividend shares with generous yields. Two which I would buy today are listed below:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

If you don’t have exposure to the banking sector already, then I think ANZ would be worth considering. With its shares down by a third from their 52-week high, I estimate that they are changing hands for 13x estimated FY 2021 earnings and 0.9% FY 2021 book value. This is lower than average and a level that I think is attractive for patient investors.

Another positive is that although it is highly likely to cut its dividend materially next year, its share price decline means it should still offer an above-average yield. As things stand, I expect ANZ to pay a partially franked dividend of $1.05 per share next year. This equates to a 5.5% yield today.

BWP Trust (ASX: BWP)

Another dividend share to consider buying is BWP Trust. It is a real estate investment trust which owns 75 properties across Australia. The majority of its properties are warehouses that are leased to the Wesfarmers Ltd (ASX: WES) owned Bunnings business. At the last count the company’s occupancy rate stood at 97.5% and it was generating over $150 million in rent each year.

While having the majority of your properties leased to a single customer is usually a risk, I don’t believe it is anything to be too concerned about. This is because Wesfarmers is a major BWP shareholder with a stake of almost 24% and unlikely to do anything that would negative impact its investment. All in all, I’m confident BWP can continue growing its income and distribution at a modest rate for the foreseeable future. At present I estimate that its shares offer investors a forward 4.9% yield.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There can be no doubting that 2020 has been a tumultuous year for the ASX. At the height of the coronavirus panic-selling in March, millions were wiped off the market caps of many ASX growth companies.

Buy now, pay later fintech Afterpay Ltd (ASX: APT) saw its share price slump almost 80% to a multi-year low of $8.01. Cloud accounting software developer Xero Limited (ASX: XRO) and healthcare blue-chip Cochlear Limited (ASX: COH) also shed over 30% of their values.

While some companies have staged incredible recoveries – Afterpay shares are up 620% since 23 March – there is still plenty of value left in the market. But separating the diamonds from the rough can be difficult. Here are 3 companies I think may have been neglected in the recent market recovery and could still offer big potential.

Nearmap Ltd (ASX: NEA)

ASX aerial imaging company Nearmap is one of the most promising ASX growth companies on the market. Nearmap is a leader in a niche industry and has rapidly expanded its footprint across Australia and North America. Statutory revenue for H1 FY20 surged 31% over the prior comparative period to $46.3 million. And the company was positioning itself for even greater things during the second half.

But then coronavirus happened. Nearmap investors fled despite the assurance that Nearmap had seen no adverse financial impacts from COVID-19. Nearmap shares dropped over 50% in value to a 52-week low of just $0.83 by 25 March. The company has recovered much of its losses, currently sitting around $2. But it’s still well short of the 52-week high of $4.29 in June 2019.

Livetiles Ltd (ASX: LVT)

LiveTiles is a perennially undervalued ASX software company and should be surging higher in the current climate. Software developers like MNF Group Ltd (ASX: MNF) and Objective Corporate Limited (ASX: OCL) have found themselves the unlikely market darlings of this emerging economy. But despite a modest recovery, LiveTiles shares are languishing well below their pre-coronavirus highs. 

LiveTiles develops intranet portals and online working environments for corporate clients. Given many businesses are still working remotely, you would think the demand for software that enables online collaboration would be accelerating.

And according to LiveTiles, it is. Cash receipts for the Q3 FY20 quarter were up 109% over the prior comparative period to $10.9 million. Annualised recurring revenue also rose 5% for the quarter to $55.7 million. And yet, LiveTiles shares are still trading for just 25 cents, 60% short of the 52-week high of 60 cents they recorded last July.

Audinate Group Ltd (ASX: AD8)

Audinate shares took a real hammering during the coronavirus selloff. After opening the year trading at over $7, Audinate shares crashed to $2.51 by 23 March. Despite a strong rebound, they still haven’t recovered all those losses. Audinate is trading at just $6.03 at the time of writing. And to think, as recently as December they were valued at $9.30.

This stunning collapse is, in large part, pretty understandable. Audinate was a promising ASX growth company pre-coronavirus, but demand for its services has been severely dampened by lockdowns. Audinate specialises in the technology required for complex and large sound systems. Past projects have included a theatre in Buffalo, New York, a shopping mall in Mexico City, and even a zoo and aquarium in Ohio.

Audinate was forced to withdraw its FY20 guidance in April in response to the pandemic. It will be interesting to see how much financial damage the company will have sustained. However, as restrictions ease and event spaces re-open, the global leader in sound technology is well-positioned for a rebound.

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Rhys Brock owns shares of AFTERPAY T FPO, AUDINATEGL FPO, Cochlear Ltd., LIVETILES FPO, and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO, Cochlear Ltd., LIVETILES FPO, Nearmap Ltd., Objective Limited, and Xero. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended AUDINATEGL FPO, Cochlear Ltd., LIVETILES FPO, and Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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