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Turners set for record results

Company feels impact of omicron outbreak but predicts profits will still hit a high of $42m-$43m for the year.
Posted on 11 March, 2022
Turners set for record results

Turners Automotive Group says it is on course for record results despite the outbreak of the omicron variant of Covid-19 disrupting the car market and recent demand for used vehicles falling.

The company has upgraded its guidance to the NZX and now expects net profit before tax (NPBT) for the 2022 financial year to be between $42 million and $43m, up from its previous forecast of $40m to $42m.

Todd Hunter, chief executive officer, says the predicted figures reflect the resilience of the business in the face of the pandemic and would top the NPBT of $37.4m achieved in the previous year.

He notes the omicron outbreak has affected the wider used car market as well as Turners’ operations. 

“Vehicle processing capacity has reduced with a number of staff currently isolating due to testing positive or as household contacts,” he explains.

“Demand for used cars has dropped away in the second half of February, however Turners has continued to gain market share in auto retail, reflecting a widening advantage over competitors. 

“Given the nature of the omicron outbreak, Turners expects a return to normal operating conditions reasonably quickly following the peak of this current outbreak.”

Hunter, pictured, says Turners sourcing more than 90 per cent of its vehicle stock domestically has been an advantage as Covid-19 and government regulations “effectively reduces the supply of imported used cars from Japan”. 

 “Our ‘Tina from Turners’ brand campaign has exceeded expectations, enhancing our ability to secure more quality New Zealand cars, and reinforcing our strength of supply,” he adds. 

“The combination of consignment supply and our local purchasing means we are well positioned from a supply perspective.”

The company reports its finance and insurance segments continue to deliver “quality annuity earnings” and the group was navigating well the changes to the Credit Contracts and Consumer Finance Act (CCCFA) and challenges for some potential borrowers.

Turners expects record full-year dividends of at least 23 cents per share fully imputed, up from its previous forecast of 22c per share.

It is set to report its full-year results in late May.