Turners Auto defies downturn, reports record earnings

Turners Automotive has reported record earnings for the March 2024 year. Photo / Supplied

Turners Automotive says diversification helped the used car dealer and financier defy the economic slowdown and report record earnings for the March year.

The company’s after-tax net profit rose by 1.5 per cent to $33.0 million.

Before tax, the profit rose by 8 per cent to $49.1m, while earnings before interest and tax gained 12 per cent to $58.6m.

The company, which is also involved in credit management and insurance, declared a dividend of 7.5 cents per share (cps), taking the full-year dividend to 25.5cps, up 11 per cent.

Turners said that despite economic challenges and soft consumer demand, it was well-placed to exceed its 2025 net profit before tax target of $50m. It also announced its new medium-term target of $65m net profit before tax in 2028.

“Turners’ 2024 result demonstrated strong earnings in challenging conditions, thanks to its resilient, diversified business model, and is well-placed to implement its next phase of development and growth,” the company said.

Turners’ auto segment profit was up 27 per cent and constituted more than 50 per cent of group profits.

“The finance segment has weathered the interest rate shock as we deliberately sacrificed some top-line growth over the last two years to focus on higher quality borrowers, positioning the segment well as interest rates ease.”

Turners said its net interest margin is expanding, following an “inflection point” during the second half.

Meanwhile, arrears remained significantly below industry benchmarks.

Looking ahead, Turners said 2025 would be “testing”.

“Our near-term focus remains on exceeding the $50m net profit before tax goal in 2025, despite the economic backdrop.

“Beyond 2025, Turners is well-placed to continue to make strong progress, thanks to the resilience of a diversified business model (activity and annuity), and clear strategy for further growth,” the company said.

Chief executive Todd Hunter said the company continued to improve margins across all segments. “Our Auto Retail segment again excelled and is now entering a build phase for our next growth push.”

“We expect New Zealand’s trading conditions to remain challenging throughout the half year to September 2024. However, we expect to see a recovery in the second half of the year,” the company said.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.