Turners set for record result
Turners Automotive Group has announced it expects the 2024 financial year to set a new record for the company and it is on course to eclipse the $45.5 million net profit before tax achieved in the year to the end of April 2023.
Bosses have made the prediction after reporting that trading results have been positive in recent months and the company’s dividend is forecast to be at least 24 cents per share, an increase of four per cent.
They predict further upside in the automotive retail segment of the business from the second half of the current financial year with new branches in Timaru and Napier set to open in November.
In an announcement to the NZX on August 23, Turners says it expects the market to remain supply-constrained “with supply of vehicles an advantage for Turners”.
The transition of wholesale auction units into its retail sales channel is also set to underpin further market share growth.
Looking ahead in other areas, the company adds quality and margin management remain key priorities within the finance division in the short term.
“The economic downturn is impacting arrears but they remain within expected levels,” it says. “Margins are expected to expand in near term although still some sensitivity to the OCR track.”
In insurance, new policy sales are benefiting from its distribution and market share gains and claims ratios are stable. Investment returns continue to improve.
When it comes to credit management, debt load levels are increasing along with the volume of payment arrangements in place.
“As the economic conditions worsen, we expect to see further lift in debt loads from corporate and small and medium-sized enterprise clients. We are well positioned for the next stage of the NZ credit cycle.”
Retail boost
Grant Baker, chairman, delivered a presentation to the company’s annual meeting on August 23 and said the 2023 financial year record result was achieved despite macro headwinds.
The auto retail division’s profit grew 28 per cent year-on-year following a focus on domestic sourcing and retail optimisation.
“NZ and global economic challenges will persist over the next 12-24 months,” he added. “[But we] still see opportunities in the markets we operate in and are well position to take advantage of these.”
Baker adds Turners is on track to achieve its goal of 10 per cent market share in automotive retail in the near term and if that part of the business is strong it has a halo effect for finance and insurance.
Todd Hunter, chief executive officer, added that car sales for the company rose 14 per cent between the 2022 and 2023 financial years, and the year-to-date figures for the 2024 period are tracking ahead of the prior year.
