Maestro
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Post by Maestro on Mar 12, 2017 12:45:22 GMT
Only available to subscribers unfortunately. Can you summarise? Auto Trader hit a four-month low on Friday on fears that a glut of used cars will drive its smaller advertisers out of business. Credit Suisse turned negative on Auto Trader, which dropped 4.7 per cent to 382p. Profitability among dealerships is set to suffer from sterling’s depreciation and an influx of nearly-new used cars, caused by a falling off of the leasing cycle, the broker forecast. While Auto Trader’s advertising business will benefit in the short term from higher used-car volumes, the growing supply will squeeze retailer profits even further and could push as many as a fifth of independent dealerships out of business, it said.
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blender
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Post by blender on Mar 12, 2017 12:52:44 GMT
I wonder if you are Austin Maestro, from Cowley? If so I think your experience of the used car market may not be very current.
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Maestro
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Post by Maestro on Mar 12, 2017 18:22:51 GMT
I wonder if you are Austin Maestro, from Cowley? If so I think your experience of the used car market may not be very current. Ha, thats not me, nevertheless you might be right about my knowledge of used car market.
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elliotn
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Post by elliotn on Mar 13, 2017 11:05:27 GMT
/mod hat off You have to hope that, having received £500k (or whatever) to buy stock, then the asset value (over which ABL has some hold) increases by ~£500k, rather than the money doing a quick flit to some other outfit beyond our ken .. Spot on.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 13, 2017 11:34:36 GMT
ablrate do you think the 'no other loans' page should be blank given the self evident connections between this company and multiple other loans to the ACFL group? I know its technically true but I think in the interests of transparency some indication should be made that a large proprtion of ABL loan book is to ACFL via ACI/APF entities. (c£4.5m about 33% of total book) Not a lot of headroom in that CG (1.8m loans guarenteed) if the used car market takes a turn for the worse (plenty of commentary from experts on that possibility)
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jcm9000
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Post by jcm9000 on Mar 13, 2017 11:46:14 GMT
Curious about the company overview section: once installed, the units are tenenated under a rental agreement. Tenants use the units for a range of short and longer term purposes........eh?
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Post by ablrate on Mar 13, 2017 11:51:02 GMT
ablrate do you think the 'no other loans' page should be blank given the self evident connections between this company and multiple other loans to the ACFL group? I know its technically true but I think in the interests of transparency some indication should be made that a large proprtion of ABL loan book is to ACFL via ACI/APF entities. (c£4.5m about 33% of total book) Not a lot of headroom in that CG (1.8m loans guarenteed) if the used car market takes a turn for the worse (plenty of commentary from experts on that possibility) That is something we are working on. Technically, as you say, it is true, because that section was created for the same borrower, but where cross guarantees are concerned there ould be a link. We will add something into the admin section for nowuntil a solution is coded. Regards Ablrate
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blender
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Post by blender on Mar 13, 2017 12:18:31 GMT
Yes, I have quite an investment which is guaranteed by ACF, and would like to see sufficient security for the loan in the business itself. That seems to be only in the stock of cars themselves. The business currently sells from one site, selling a car every two days. The £500k would stock the two new sites proposed with some cash left over for setting up. It worries me that the cars seem to be valued at retail price rather than purchase (balance sheet and security) - have I got that wrong? There is no visible plan for the two sites, which seem hypothetical, so how can we be sure that the cash will result in car assets. And lastly that I do not see any guaranteed minimum value to be held in car stock. If the stock is run down by sales, where is the security? Just concerns, probably easily answered.
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Post by d_saver on Mar 13, 2017 12:32:24 GMT
Curious about the company overview section: once installed, the units are tenenated under a rental agreement. Tenants use the units for a range of short and longer term purposes........eh? I think this is just bleed over from another loan/co description.
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Post by ablrate on Mar 13, 2017 12:38:23 GMT
Curious about the company overview section: once installed, the units are tenenated under a rental agreement. Tenants use the units for a range of short and longer term purposes........eh? I think this is just bleed over from another loan/co description. Yes... appears to be an error.. have corrected
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 13, 2017 13:11:42 GMT
ablrate do you think the 'no other loans' page should be blank given the self evident connections between this company and multiple other loans to the ACFL group? I know its technically true but I think in the interests of transparency some indication should be made that a large proprtion of ABL loan book is to ACFL via ACI/APF entities. (c£4.5m about 33% of total book) Not a lot of headroom in that CG (1.8m loans guarenteed) if the used car market takes a turn for the worse (plenty of commentary from experts on that possibility) That is something we are working on. Technically, as you say, it is true, because that section was created for the same borrower, but where cross guarantees are concerned there ould be a link. We will add something into the admin section for nowuntil a solution is coded. Regards Ablrate Thanks. I see there is a note under the CG discussion in the proposal refering to potential exposure to ACFL so its not entirely undisclosed if people read the docs (which of course all investors should do)
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registerme
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Post by registerme on Mar 13, 2017 13:32:17 GMT
The thing that irks me about this situation (and it's not unique to ablrate) is that a) nothing is ever done to address the security situation with existing loans reliant on eg a parent company guarantee and b) lenders on other loans sharing that parent company guarantee have no options other than hold or sell.
At a minimum there should be covenants in place to prohibit dilution of any extant security.
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Post by ablrate on Mar 13, 2017 14:53:04 GMT
Only available to subscribers unfortunately. Can you summarise? Auto Trader hit a four-month low on Friday on fears that a glut of used cars will drive its smaller advertisers out of business. Credit Suisse turned negative on Auto Trader, which dropped 4.7 per cent to 382p. Profitability among dealerships is set to suffer from sterling’s depreciation and an influx of nearly-new used cars, caused by a falling off of the leasing cycle, the broker forecast. While Auto Trader’s advertising business will benefit in the short term from higher used-car volumes, the growing supply will squeeze retailer profits even further and could push as many as a fifth of independent dealerships out of business, it said. Response on this: "January, February, July & Augusts, the months immediately prior to the registration months of March & September are traditionally quiet months for sales of new and used cars. The new car sales in these months are quiet because for another 2 months wait, the purchaser (private or company) gets to drive the latest registrations, and the used are quiet as with 80% of new cars being registered, there is a used car being taken as part exchange or de-fleeted and so the big registration months mean greater used car stock availability, in the registration months and the following 2 months. AutoTrader has for many years enjoyed a monopoly over the motor industry, something which still continues today. Whilst Motors, eBay Motors, PistonHeads, Car Guru, … are making inroads into the market, they are not big enough and do not have the resources to challenge AT, and certainly cannot turn back the clock to eliminate the head start AT has benefited from. It is however a fact that AT are the No 1 ‘go to’ medium for marketing used cars for sale. Their infrastructure has been strengthened, they are reviewing their offering and will by April be offering video, 100 images and a whole host of other benefit packages to their dealers. The fact is, there are cheaper alternatives, but none singularly or collectively have the reach or presence in the market and if you are not in AT you will not reach the customers. I have a general issue with the claims that the market is being flooded with used cars and the greater supply will squeeze profitability. The greater number does not equate to greater number of clean cars being made available. Dealers with fully prepared, full service history, and peace of mind packages will always perform well. People are looking for that perfect buy with the added benefit of the peace of mind packages like bona fide warranties and competitive or ‘sympathetic’ finance. Therefore the niche dealers specialising in the quality, high specification popular models will always perform, whereas dealers with poor quality merchandise will naturally demise. Even if the supply statement was correct, the prices being lowered will not affect the profit margins, as whilst the retail price is driven down, the trade price will also be driven down, maintaining the margins. Sytner auctions are performing at 95 - 100% of CAP Clean, which suggests that the market is not as over burdened with used cars as the article suggests. Indeed if the suggestions were true, Sytner auctions would be the first to suffer as they will not achieve the prices they do for their offerings. It is a good thing that the poorer dealers will naturally demise, leaving the market open for the good dealers to succeed".
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nick
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Post by nick on Mar 13, 2017 15:23:44 GMT
I note there is no instant returns on this loan. I assume interest only starts accruing once the loan agreement has been executed and the loan drawdown. How long has this usually taken post bidding on previous loans? I'm I right to assume it makes sense to leaving bidding as late as possible up to loan fill/biding expiry if funds can earn interest elsewhere?
EDIT: Ignore the above - just noticed that instant returns are enabled!
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gustapher
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Post by gustapher on Mar 13, 2017 15:28:25 GMT
Ditto Nick's post - I must have been blind not seeing where it was written
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