Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Turners shares tumble 7.4% on possible profit downgrade

Shares in Turners Automotive Group fell as much as 7.4 percent after it warned market conditions have deteriorated markedly.

Turners’ shares sank as much as 20 cents to $2.53, taking their year-to-date decline to 23 percent.

Investors were reacting to the company’s comments that it had a bad October and that if such conditions persist, pre-tax annual profit could be 5-to-10 percent below previous guidance of $34-to-36 million.

The company has just reported a 28 percent jump to $12.8 million in first-half net profit, but that included the $3.4 million it made on the sale-and-lease back of a property at Wiri, south of Auckland.

First NZ Capital analyst Greg Main says the underlying result excluding the property sale showed growth of just three percent.

The market will be wary “until we get some clarity” on how well sales go heading into Christmas and the summer when people tend to buy more cars.

The company says trading conditions through the first half were variable, with tough market conditions in the first quarter and a bounce-back in the second quarter.

"The diversified revenue streams have really demonstrated their value through the first half of this year. However, market conditions, particularly in the used import car market, remain challenging and pressure is being placed on vehicle margins right across the industry," says chair Grant Baker.

The company says the Wiri sale is in line with its strategy of optimising its real estate.

Chief executive Todd Hunter says Turners has more than a five-year pipeline of such property opportunities as it shifts its on-the-ground operations from industrial areas to higher-profile retail sites and looks to recycle capital.

The company currently has potential deals in Whangarei and on Auckland’s North Shore, he says.

The results show retail sales through Turners Cars in the six months ended September were up 3 percent on the prior year. Buy Right Cars also increased its market share with unit sales up 9 percent.

However, Turners’ retail sales were down one percent in dollar terms at $111.8 million and operating profit from the retail operations fell 9 percent to $8 million.

The company’s finance division, now branded Oxford Finance, also reported a 2 percent fall in operating profit for the six months.

The company says that reflects a disappointing performance from its non-recourse lending through Motor Trade Finance to more than 300 dealers and franchisees with impairments higher than expected.

It has now imposed stricter lending criteria on its non-recourse loan offering.

Turners’ debt management arm, EC Credit, also reported an operating profit fall of 10 percent to $3.1 million, reflecting the loss of a large Australian customer which decided to take its credit control functions in house.

The star of Turner’s results was its insurance Autosure business which lifted operating profit 144 percent to $6.4 million, but that included the profit from the Wiri sale.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Grey Power: Is Disappointed To Learn Of More Bank Closures

Many older people are being left without essential services because of cost cutting and the march of modern technology. It is now expected that most banking transactions can occur via the internet or telephone. Jan Pentecost, President of the Grey Power ... More>>


Economy: Supply Chain On Brink Of Overload Says National Road Carriers

The New Zealand supply chain is on the brink of overload and it looks like the upcoming peak imports season may push it over the edge says National Road Carriers Association (NRC) CEO David Aitken. “Worldwide supply chains are in disarray,” says Mr Aitken. ... More>>

Retail: Supermarkets Announced As Government’s Second Market Study

The Government has today launched a market study to ensure New Zealanders are paying a fair price for groceries. More>>


Statistics New Zealand: Retail Sales Recover In The September 2020 Quarter

Retail sales values recorded the largest September quarter rise since the series began in 1995, Stats NZ said today. Spending on major household items, vehicles, and groceries contributed to the strong 7.4 percent ($1.8 billion) rise in total ... More>>

Kea Aerospace: New Zealand Flies Into The Stratosphere

Development has started on a solar-powered, unmanned aircraft that can fly in the stratosphere continuously for months at a time. The zero-emission aircraft will carry a suite of imagery equipment that will be game-changing for many industries, vastly ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>


Forest & Bird: Kākāpō Wins Bird Of The Year 2020

The nation has voted and Aotearoa New Zealand has a new Bird of the Year. New Zealand’s moss-colored flightless parrot has climbed to the top-spot for the second time in Forest & Bird’s annual Te Manu Rongonui o Te Tau/Bird of the Year competition. ... More>>