Turners Automotive Group Limited has reported a 44 per cent increase in revenue and a 21 per cent increase in pre-tax profit growth for the six months as it benefits from growing retail sales, an increasing loan book and a scaled up insurance business.
Revenue was $163.8m for the six months ended 30 September 2017, while Net Profit Before Tax increased to $14.2m. Net Profit After Tax was $10.0m, up 18 per cent on the previous half year.
Shareholder equity increased to $200.8m as at 30 September 2017, boosted by the $25m capital placement completed in September 2017.
Turners CEO, Todd Hunter, commented: “Turners has reported another positive half year of growth and, while some softening in the used vehicle market was seen during the election period, overall market trends are positive and growth prospects remain strong. We are continuing to benefit from our vertically integrated business model. Finance receivables are growing strongly, as are insurance premiums, both on the back of increasing used vehicle sales.
Following the acquisition of Buy Right Cars and the Autosure insurance business, Turners have delivered improvements in revenue and have positioned themselves in a good place for growth.
“We are continuing to innovate with the development and launch of new products and services designed to deliver a superior customer experience. While the market is incredibly fragmented and competition is active, we believe we have unique attributes and competitive advantages which position us well for continuing growth into the future.
“An uplift is expected in the second half in line with annual trends and due to the positive impact of the growing finance book and as scale benefits are realised.”
The company has stipulated that it is on track to deliver a Net Profit Before Tax of between $29 million and $31 million for the full year to 31 March 2018. This would represent an 18% to 26% increase on FY17, or 10% to 14% excluding acquisitions.
In terms of their trading performance, Automotive Retail was up 32 per cent to $113.5m and operating profit was up 27 per cent to $8.8m with a full half contribution from Buy Right Cars.
Turners’ focus on retail customers continues, and sales to end users were 72 per cent of all car purchases in the first half. These sales deliver higher margins and provide more opportunities to sell finance and insurance products.
The usual seasonal dip in trading margins has been longer and stronger this year, due to the increased supply of new and used import vehicles and increasing competition.
Investment is continuing in purpose built sites in targeted locations for the Auto Retail Division. Two new Trucks & Machinery sites in Wiri and Palmerston North are now operational, and an additional site is being developed in Hamilton.
A new Turners Cars site is being developed in Porirua and a new site has just been acquired in Whangarei. A new Buy Right cars site is also under development in Penrose, adjacent to the main site in Auckland.
Turners Automotive Group Limited is an integrated financial services group, primarily operating in the automotive sector www.turnersautogroup.co.nz.