Oxford Finance taken off market
Turners Automotive Group has decided Oxford Finance isn’t for sale despite “significant interest” in the business.
The decision, announced to the NZX today, follows a strategic review to consider alternative ownership and growth options for the finance company.
Investment bank Jarden was appointed to run a process for interested parties, which has now been concluded and, while there was significant interest in Oxford Finance above its book value, in the board’s view offers failed to fully reflect the intrinsic value of the business now and what it thinks can be achieved through the continued growth.
The company says its view was informed by separate valuations by two corporate advisers, so the board had decided to conclude the strategic review and is excited to focus all efforts on the execution of the growth strategy.
Chairman Grant Baker says: “As we indicated to shareholders, we were only prepared to sell Oxford if we were offered a premium price. Our strong view is that shareholder value continues to be optimised by retaining ownership.
“Oxford Finance is a well-performing and growing business with a strong network of active dealers across the country, and we’re excited by opportunities to continue reshaping and growing the business.”
Turners will continue with its growth plans for Oxford Finance, which were laid out at its recent annual general meeting. These include targeting higher-quality lending, using data and technology initiatives to improve risk-pricing, system integration (API development) to broaden distribution, and ramping up origination from Turners Cars.
“Oxford’s operating profit to August year to date is tracking well ahead of budget and last year,” says Todd Hunter, Turners’ chief executive officer. “A number of initiatives we have implemented are delivering improved credit metrics and improved profitability.
“Our auto retail channel is delivering solid volume with excellent quality origination. We have plans to further enhance the business in-line with our group strategy of simplification, derisking and focusing on capital-efficient growth opportunities.”
Over five years, Turners has successfully grown Oxford Finance from returning NPBT of $2.9 million at time of its acquisition in 2014 to $11.1m in 2019. Its three-year forecast shows further significant growth for this business.
