KEY POINTS:
Turners Auctions has posted an improved earnings result despite a slump in sales.
Net profit after tax for the six months ended June 30 was $812,000 - up from $528,000 for the previous corresponding period when the company had to contend with a $2.8 million fraud by a
former employee.
Revenues for the half year were up 0.9 per cent to $41.75 million, despite a 6.5 per cent - or 33,000 units - drop in sales. The half-year had the lowest number of second-hand car sales since 2002.
Chief executive Graham Roberts attributed the improved earnings to "doing the basics well". Yields were improved through pricing and increased selling of add-ons such as finance and insurance, helping offset the fall in auction sales. Finance contracts alone were up 17 per cent.
"I guess it just reflects that it's a bit harder to find finance elsewhere in the market."
Sales of repossessed vehicles on behalf of finance companies have been strong - up 106 per cent year to date - and the commercial business has undertaken more insolvency work, as the economic climate takes its toll.
"Turners is good when things are going well, but our commercial business is there when the economy gets into a bit of a rocky road."
More auction sales were also being driven through the web. Roberts said its online auction facility, Turners Live, now accounted for 19 per cent of total sales, up from 16 per cent at the end of December. The company has also introduced a "Buy Now" facility which it hopes will attract a new type of customer to Turners Auctions.
Property costs have remained stable at $3.7 million as a result of savings through the subletting or the amalgamation of branches. Staff expenses crept up from $9.6 million to $10.7 million due to legislative changes affecting holiday pay and the minimum wage.
Roberts said it was a good result as the current environment was the most challenging experienced for many years. The combination of declining consumer confidence, pressure on household incomes, fuel price increases and emission regulations has resulted in the second-hand car market being hit extremely hard, he said.
"People do need to upgrade their cars, maybe they've postponed that, and that will have to come through at some stage."
An interim dividend of 2.5c per share was declared.
Turners Auction shares closed at 81c, down 4c.