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Turners tips profits to top $35m

Company reports strong demand for used cars as all business units perform ahead of expectations.
Posted on 10 March, 2021
Turners tips profits to top $35m

Turners expects its profits for the 2021 financial year to surpass previous predictions thanks to the “resilience of the used-car market”.

The group says net profit before tax is on course to be at least $35 million, compared to January’s forecast of $33m to $35m

Turners says the shift follows trading results exceeding expectations across automotive retail, finance and insurance business units in January and February this year.

The earnings guidance update to the NZX on March 10 assumes no major escalation of Covid-19 restrictions.

“All three major business units continue to perform ahead of expectations, despite the trading restrictions caused by February’s partial lockdowns,” the company says. 

“This is a further reminder of the geographic diversification within the group, and the structural resilience of the used car market.”

Turners adds the results reflect initiatives over recent years to improve earnings quality. 

“In Oxford Finance, new lending volumes continue to track well ahead of the prior year and arrears are at record low levels, driven by enhanced credit scoring,” it explains. 

“Auto retail demand remained strong and margins have held up well, with continued optimisation of both the retail footprint and purchasing activity. Insurance policy sales continue to track ahead of the prior year.

“The combination of activity and annuity revenue businesses within the group continues to deliver improving results and provides further confidence about the FY22 year ahead.”

The directors are projecting a full-year dividend of 18 cents per share on the back of the strong results and have resolved to declare a third-quarter dividend of six cents per share to be paid on March 30.