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Turners joins ASX

Turners Automotive Group Limited has been admitted to the Australian Stock Exchange (ASX), effective from the market opening at 1pm New Zealand time today.

Turners has joined the ASX has a foreign-exempt entity alongside other major Kiwi companies, including Air New Zealand, Fisher & Paykel, and Trade Me.  

“The listing on the ASX will provide the company with access to a larger capital market to support its growth strategy,” Turners Group said in a statement.

The inclusion into the ASX comes after Turners Group announced the new CEO of the retail Turners Group NZ business, which was formerly known as Turners Auctions. Greg Hedgepeth will join the executive team in August.

Turners is now trading on the ASX with the code TRA.  Details of share prices and volumes will be revealed as trading on the ASX gets fully underway.

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Turners expects profit rise, eyes ASX

Todd Hunter, CEO of Turners Ltd

Turners Limited is expecting a 12 per cent rise in annual earnings, according to a business update and guidance released to investors last night. Net profit before tax for the financial year ending March 2017 is expected to be between $24 million and $24.5 million, up from $21.6 million last year.

“The Automotive Retail division continues to perform strongly and the multi-channel approach continues to deliver benefits for margins and finance sales,” Turners said in a statement.

The announcement follows Turner’s acquisition of the Buy Right Cars Group last June, with the business performing in line with expectations, and momentum building.

A $150 million credit limit from the Reserve Bank was approved, which will reduce the cost of funds and facilitate further growth in the vehicle finance arm of the company.

After snapping up Autosure from Suncorp New Zealand last November, Turners expects the insurance firm to be fully integrated within the Turners group by the end of the financial year, with profit contributions to begin flowing in 2018.

The board has declared a third-quarter dividend of 4 cents a share following the financial guidance, which takes the year-to-date dividends up to 10 cents per share. Final dividends are to be paid in June 2017.

With the New Zealand market secure, Turners is also looking to expand overseas, and the company said it is considering a foreign-exempt compliance listing on the Australian ASX, which will significantly grow its potential capital market.

 “We have made good progress on a number of important initiatives, which all contribute and support the future growth of Turners,” said CEO Todd Hunter.

“There are numerous growth opportunities available to us in the fragmented automotive market and we have a disciplined approach to identifying and assessing those that best fit our business and will add value to our shareholders.

Full 2017 financial results and a final dividend will be announced in May.

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Heartland profits increase

Heartland Bank reported an after-tax net profit of $29.1 million for the six months ending December 31, a 14 per cent increase from the previous corresponding period. The increase of motor-vehicle loans resulted in a rise in net receivables, but relatively low income growth in the vehicle finance market.

One of the major movements was in household net receivables, which increased $106.1 million. Reverse mortgages increased $57.1 million, motor-vehicle loans $27.1 million and personal loans $29.9 million.

Despite the growth in household net receivables, particularly consumer receivables, net operating income only increased one per cent over the reported period. This is mostly due to lower earning rates on motor-vehicle and personal loans.

Heartland remained optimistic about continued growth of motor-vehicle loans, citing a lower costs and a competitive advantage over non-bank lenders in the vehicle finance market.

The bank noted higher levels of early repayments for motor-vehicle loans, which helped drive the net interest margin down to 4.4 per cent.

Impairment expenses, or diminishing asset values, in the household division has increased $2.2 million compared to the corresponding period. Heartland attributed this growth to higher write-offs in motor-vehicle loans, and a growth in personal and motor-vehicle loans. Impairments remain acceptable for motor-vehicle loans at 0.7 per cent.

An interim dividend of 3.5 cents per share has been set by the directors, and will be paid on April 7.

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Heartland Bank buys stake in Fuelled Ltd

Heartland Bank Limited has taken a 25 per cent shareholding in small-to-medium business (SME) lender Fuelled Limited. Heartland has also pledged a committed debt facility which enables Fuelled to engage in its Australian growth plans.

Fuelled is a New Zealand-based website where SMEs receive an immediate cash advance on outstanding invoices rather than waiting up to 90 days for customer payment. Last September, Fuelled partnered with Xero and customers are now required to use Xero’s accounting software to access the service. The lending system is the first of its kind in the country and was selected by Xero as its first alternative lender in its ‘financial web’ – a collection of online-based business lenders.

Heartland’s investment in Fuelled is the latest attempt to expand its online SME lending services. Last April, Heartland launched the Open for Business platform, which gives a preliminary quote and approval online. Spotcap Australia is another recent acquisition for Heartland, which primarily serves SME businesses.

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Record profit for Colonial Motors

The Colonial Motor Company has announced a record trading half-yearly profit for the period ending December 2016. The after-tax trading profit is up 8.9 per cent on last year to $10.27 million.

A dividend of 13 cents per share will be paid to shareholders in light of the record profit. The dividend will be paid on April 18, with a supplementary dividend to be paid to eligible shareholders.

The directors attributed this profit increase to the growth of the new vehicle industry and the resurgence of popularity in light commercial and SUV vehicles. Of Colonial Motors’ 20 franchised dealerships, 13 primarily focus on Ford and seven on Mazda, both of which increased their market share in 2016. The remainder focus primarily on commercial and farming vehicles, a segment which also saw growth last year.

The sale of Jeff Gray BMW and MINI dealerships following BMW’s decision not to renew the dealer agreement meant Colonial Motors wrote of $315,000 of intangible assets. The directors said, however, that the sale would not impact future trading profitability.

New development projects are underway. Construction has begun on the new Southpac Truck service facility in Te Rapa, Hamilton, and is expected to finish mid-2017. A new leased service facility for South Auckland Motors Takanini is on track to be completed before the end of 2017. Colonial Motors has also committed to a new site for Macaulay Motors in Queenstown which will double Ford and Mazda service capacity in the region.

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