Turners Auctions has announced a 55 per cent rise in first half net profit to $812,000, earned in the face of a slumping used car market.
The current environment was the most challenging experienced in the industry for many years, the company said today. A pricing review, increasedsales of add-on finance and insurance products had helped protect revenues.
A combination of rapidly declining consumer confidence, pressure on household incomes, fuel price increases and emission regulations had resulted in the second-hand car market being hit extremely hard.
The rise in net profit for the six months to the end of June was achieved on revenues up 1 per cent on the corresponding period a year ago to $41.8 million.
Auction entries increased 8 per cent over the first half compared to the prior year, reflecting a strong uplift in activity.
But auction unit sales were down 7 per cent, highlighting the large gap between the expectations of vendors and buyers in the current market, Turners said.
The group generated net cash inflows from operating activities of $3m in the half year, a 17 per cent increase.
Sales of repossessed vehicles on behalf of finance companies were strong, up 106 per cent year-to-date, while the commercial business had undertaken more insolvency work.
An extensive review of group property needs had been carried out resulting in some short term savings through the amalgamation of branches or subletting properties.
That had has enabled Turners to keep property costs in line with 2007, which was pleasing given an upward trend in commercial rents.
Staff expenses were higher compared to last year due to the impact of legislative changes affecting holiday pay and the minimum wage.
A new version of online bidding application Turners "Live," which now accounts for 19 per cent of sales, had been launched.
The company also introduced "BuyNow", providing a new way of buying vehicles, and would attract a new type of customer, the company said.
The directors declared a fully imputed interim dividend of 2.5 cents per share.
Shares in Turners Auctions last traded yesterday at 85c, down from a year high of $1.20 last September.
