Turners Automotive Group Limited Analysis

Overview

Turners Automotive Group has been formed through the 2014 merger of New Zealand's largest vehicle and machinery retailer, Turners Auctions, and leading consumer finance and insurance business, Dorchester. Turners Auctions was established in 1967 when Turners and Growers Limited began auctioning cars and trucks alongside its fruit and produce business. Today, Turners is New Zealand's largest auction house and vendor of second hand cars, trucks and machinery. Dorchester was incorporated in 1984 as Venture Pacific Limited. The company became Dorchester Pacific Limited in 1992 and over the following years, Dorchester developed a core financial services base through the acquisition of a number of finance companies throughout New Zealand aligned to its consumer finance and insurance strategy. In 2014, Dorchester launched a successful takeover offer for Turners Auctions and consolidated its interests into a single entity that carried the Turners name. The decision to continue the Turners brand recognised the rich history and consumer recognition attached to it. In 2017, Turners Limited changed its name to Turners Automotive Group to enable a Foreign Exempt Listing on the ASX and to reflect the focus of the group on the automotive sector.

The Turners Automotive Group has 3 core operating divisions.

1. The Automotive Retail Division where we control the buying and selling of second hand cars, trucks and machinery to earn a transactional margin and deliver cross-sell opportunities for our Finance and Insurance products. Turners is the largest second hand vehicle retailer in New Zealand.

2. The Finance and Insurance Division where we help customers with simple and attractive finance and insurance products, and through this build annuity revenue streams. Turners has a portfolio of reputable businesses offering finance and insurance products to customers across New Zealand, including personal, motor vehicle loans and insurance.

3. The Debt Management and Credit Collection Division where we help businesses of any size in New Zealand and Australia with collecting debt from customers who are not paying. Turners has a growing presence in the debt management sector in both New Zealand and Australia through its EC Credit Control business.

Performance

The following information was extracted from Turners Limited's half year results, released on 26 May 2025:

Turners’ FY25 result caps off a decade of sustainable growth

Turners Automotive Group (NZX/ASX: TRA) has further strengthened its track record of resilience through the cycle by delivering another record profit and dividend for the financial year to March 31, 2025 (FY25).

The result caps off a decade of sustainable growth. Turners has grown dividends almost threefold, from 10 cps in FY15 to 29 cps in FY25.

The resilience of this result demonstrates a diversified platform to navigate extremely challenging economic conditions. With strong momentum in place, the business now moves into its next stage of growth and is on track to reach its FY28 targets earlier than expected.

Key Financial Highlights:

● Revenue $414.2m -1%

● EBIT 1 $62.3m +6%

● NPBT $54.3m +10%

● NPAT $38.6m +17%

● Earnings per share (EPS) 43.3 cps +17%

● Final dividend declared of 9.0 cps

● Full year dividend of 29 cps +14%

1 EBIT adjusted for interest expense in Finance (non-IFRS measure)

Financial results

Turners continued to achieve record financial results in FY25. EBIT was up 6% to $62.3m. It lifted NPBT 10% on the previous year to $54.3m. NPAT rose 17% to $38.6m. Earnings per share was 43.3cps, up 17%.

After a final dividend of 9.0 cps, annual dividends reached 29 cps, up 14% on the previous year. This represents a yield of approximately 6.6% per annum based on a $6.10 share price.