Turners targets NZX50 spot
Bosses at Turners Automotive Group have their sights set on soon joining the NZX50 after seeing the company’s market share and profits grow, and with ambitions to keep building on that momentum.
Todd Hunter, chief executive, told an NZX virtual investor event that the business being ranked among the country’s largest stocks would be a “great milestone” to knock off and it has never been closer to achieving that target.
The NZX50 index is designed to measure the performance of the 50 largest, eligible stocks listed on the main NZSX board by float-adjusted market capitalisation and is considered New Zealand's pre-eminent benchmark index.
“We’re 47th on the NZX free float market cap list,” Hunter told the webinar on October 11. “There’s quite a bit of chat around our future inclusion in the NZX50 and according to the investment banks that we deal with and analysts, they think we have got a pretty good chance of being included.
“It would be a great milestone for the business to be included and it’s been a personal goal of mine and Grant Baker, the chairman, for a number of years. It would be great to knock that off.”
The prospect comes as the company focuses on its plan to achieve an annual profit of $50 million by the 2025 financial year.
Turners announced on October 10 it expects to soon announce a record half-year profit for the six months to September 30, with this year’s figure set to reach at least $25m.
Hunter, pictured, told investors the auto retail section of the company had experienced “excellent market share growth” and is on course to soon exceed 10 per cent of all used car trade.
He put the success down to a combination of factors, saying “branch expansion, the building of our vehicle sourcing capability and investment in the brand” has all helped.
Hunter added its damaged and end-of-life vehicle unit continues to grow off the back of an increasing number of older cars being written off by insurers or becoming uneconomic to repair.
“This business is in very good shape but we still see plenty of opportunity,” he said.
“We thought 10 per cent was a good aspirational goal for market share in our auto retail division and it’s clear we’re going to hit that.
“We need to reset our sights again and there’s so much opportunity still in this used car space. There is a lot of latent demand.
“Twenty per cent of registered cars are 20 years or older and we know there’s a big cohort of cars that need to be replaced over the next five or so years. So there’s plenty of opportunity for us to keep growing.”
He explained branches in Timaru and Napier are currently being built and set to open in November, with the company confident of success.
“[That’s] based on the experience of Nelson and New Plymouth where we’ve seen momentum build quickly around market share. Nelson was a standout result where we’ve managed to hit north of 30 per cent inside 12 months.
“In terms of the market size, Timaru is going to be a good test for us. It will be the smallest regional market we’ve been into and we think that should be a half-a-million [dollars] operating profit contribution site, so it’s going to be interesting to see how that plays out.”
Three sites acquired in Christchurch are also due to come on stream from mid-2025 to 2026 as the company shifts from a single-site location to a multi-site operation in the city, which Hunter said is critical for vehicle sourcing and being closer to consumers.
