Turners targets $100m profit
Turners Automotive Group has its sights set on achieving net profit before tax (NPBT) of $100 million by 2031 after announcing the company is already on track to hit its 2028 financial goals a year early.
Todd Hunter, chief executive officer, says the group has published three multi-year profit targets since March 2022.
It exceeded its NPBT goals of $45m in the 2024 financial year (FY) and $50m a year later and now expects to meet its 2028 target of $65m in FY2027.
As a result, it outlined its five-year ambitions at the group’s investor day in Auckland on March 24.
Hunter, pictured, says 50 per cent organic growth on top of the company’s NPBT for FY2026, which is forecast to be $63m, plus a small amount of additional inorganic growth will get it to $10m.
“Continued organic growth will come from auto retail with new branches planned plus growth in finance business, direct to consumer growth in insurance, and growth in Turners Servicing and Repairs,” he adds.
“We have gone well in a tough economy and we will go better in an improving economy.”
He told investors that improving consumer confidence, a stronger new car market and the relaxation of used import restrictions will lead to more transactions in the used car sector.
“Recovery in consumer confidence drives higher transaction volumes. which benefit sourcing, sales, finance and insurance, and servicing and repairs.”
Hunter says there will be the opportunity for further market share gains as industry “barriers rise and smaller players continue to exit”, while Turners also plans to continue to expand its physical and digital networks.
He notes dealer numbers continue to track down and predicts sourcing will become increasingly difficult for sub-scale operators. “Ultimately, scale will be the key determinant of long-term success in this category.”
Grant Baker, chairman, opened the investor day and says the group has “great businesses that are even better together”.
He adds the company has a strong focus on growth and opportunities, has proven to be resilient, and is primed to deliver more in a positive environment.
Network expansion
Greg Hedgepeth, chief executive officer of Turners Auto Retail, says that part of the group has provided 89 per cent bottom-line growth in the past five years.
He notes the increase has been driven by network growth, sourcing capability, brand strengthening, digital progress and margin expansion.
Among the key initiatives for the auto retail division over the next five years is opening 15 more branches, to add to the 32 it already operates nationwide.
It also aims to increase its NPBT from $29.1m in FY2025 to $50m in FY2031.
The finance division anticipates lending growth as the network expands, with a goal of NPBT climbing from $16m to $30 over the same timeframe. Meanwhile, its insurance division is targeting NPBT growing from $16.2m to $22.5m.
Aaron Saunders, chief financial officer, outlined to investors how the group anticipates reaching $100m NPBT in five years’ time.
“The majority of growth comes from the auto retail, including property and half share of Turners Servicing and Repairs, and finance segments where we expect profits to grow organically by over 50 per cent,” he says.
“Over 70 per cent of the growth in auto retail profits are expected to come from network expansion, and of the 15 new branches planned we anticipate owning up to 60 per cent of these, with the balance being leased sites.
“Autosure is also expected to continue to deliver profit growth of around 32 per cent over the five-year forecast horizon.”
