Profit grows in all divisions
Turners Automotive Group says it has again shown its ability to perform in a challenging market by posting a record first-half result despite “subdued consumer conditions”.
The company has continued to make progress in each of its core businesses, and with the broader economy showing tentative signs of recovery its “deliberate strategy and capital discipline position it to drive further growth” through 2025/26.
Revenue in the six months to the end of September came in at $219 million for a year-on-year increase of five per cent, earnings before interest and tax (EBIT) jumped by 10 per cent to $34.1m and net profit before tax (NPBT) was $30.4m – up by 13 per cent. NPAT rose by 13 per cent to $21.9m. Earnings per share came to 24.2 cents each for an 11 per cent rise and the interim dividend declared is eight cents.
Performance by divisions
Automotive retail had a major uplift in marketing spend with the launch of the Tina 2.0 campaign. This drove margin growth on owned stock and improved operational efficiency despite patchy demand. Inventory sourcing remains challenging, says the company, but margins benefited from disciplined buying and tighter inventory management.
Finance was the biggest “growth engine” with 18 per cent year-on-year profit growth. The loan book grew by 13 per cent, supported by strong origination and improving credit quality. Net interest margin remained stable, aided by easing funding rates.
Solid expansion continued in insurance with 10 per cent premium growth underpinned by partnerships with the AA and Vero. Claims ratios were stable, reflecting effective risk pricing.
Servicing and repairs leveraged strong brand recognition, and expansion of the business continues with new VTNZ partnerships.
As for credit management, corporate debt load was down and lower than expected. Consumers have been finding it harder to consistently meet payment arrangements reflecting the weaker economy.
“The first-half result reflects the broader dynamics of the used-vehicle market, which continues to show resilience despite significant structural change,” says the company in a statement to the NZX.
“Registered dealer numbers have fallen to their lowest level since 2012, highlighting ongoing consolidation and pressure across the sector. Transaction volumes have stabilised and are beginning to recover, although supply remains constrained and sourcing stock continues to be challenging.
“Against this backdrop, Turners’ scale, brand strength and diversified business model have proven to be key competitive advantages enabling the group to expand margins in auto retail, grow its finance and insurance portfolios, and maintain steady overall performance during a period when more industry participants left the market.
“Recognising this shifting environment, the board and management are prioritising capital efficiency and disciplined allocation to ensure the business remains agile and focused on the highest-returning opportunities.
“The recently completed $200m securitisation term-out has improved funding costs and reduced capital requirements, further strengthening the balance sheet.
“A deeper capital management framework is being developed, optimising finance structures, reallocating surplus capital from low-return areas, and driving targeted growth in auto retail and finance.”
The company says these initiatives, supported by an engaged workforce with 67 per cent of the team participating in the employee share scheme, position Turners well to capture further upside as market conditions improve.
Financial performance
Group revenue rose by five per cent to $219m in the 2025/26’s first-half with growth across automotive retail, finance and insurance more than offsetting credit management’s “softness”.
EBIT increased 10 per cent to $34.1m, reflecting stronger divisional performance, improved vehicle margins and continued cost discipline. Turners says it’s able to deliver reliable profit growth through operational leverage and diversification.
Cash generation was strong, and the company continues to fund growth initiatives from internal resources. The fully imputed interim dividend of eight cents has maintained its policy of paying out 60-70 per cent of NPAT.
Chairman Grant Baker, pictured above, says: “Delivering record profit in a challenging economic environment is a significant achievement. It reflects the strength of our diversified model and disciplined execution across every part of the business.
“Turners continues to grow shareholder returns while investing for the future. Our balance sheet gives us the flexibility to keep building on this momentum. With a track record of growing dividends for more than a decade, Turners’ blend of consistent performance, prudent funding and strong cash returns delivers enduring value for shareholders.”
Outlook for 2026 fiscal year
The “two-speed economy” is expected to persist into calendar year 2026, bringing some uncertainty around the pace of recovery in demand and broader economic rebuild.
Despite this, Turners is on-track to deliver another record full-year result with NPBT forecast at around $60m supported by “solid operational performance and further gains in capital efficiency”. In-line with dividend policy, such NPBT could result in a full-year dividend of at least 32 cents per share, which compares to 29c last year and 20c five years ago.
Across the business, growth opportunities continue to build. In automotive retail, branch expansion and a recovering lease market are expected to lift volumes, with improving vehicle pricing likely to support margins as the economy strengthens.
Finance remains focused on growing the loan book while maintaining credit quality, benefitting from lower funding costs and improved interest margins. Insurance continues to perform well, with stable claims ratios and incremental contribution from new distribution channels and direct digital sales.
Credit management’s contribution is expected to remain negligible with repayment capacity remaining constrained. As a result, its carrying value will be reviewed at year-end based on the second half’s performance and outlook.
Group chief executive officer, Todd Hunter, says: “Our business has performed exceptionally well through the first half. We’ve strengthened every part from sourcing and lending quality to capital efficiency. As the economy starts to recover, Turners is well-positioned to deliver further record years underpinned by our brand strength, motivated team and reliable execution.”
