Turners Auctions feeling pressure from Trade Me

Turners Auctions, under pressure from on-line auction house Trade Me, today reported its December year net profit dropped 28 per cent to $5.02 million.

The company cut its final fully-imputed dividend to 6cps from 10c, to be paid on April 13. The full-year payout of 14c compares with 20c in 2004.

Its second half profit fell to $2m after it reporting a first half net profit of $2.98m.

The result was $400,000 below forecast. Chairman Michael Dossor said most of the reduction against forecast profit was due to restructuring of the company's North American businesses.

He said that the company had now secured control of its North America operations during the year.

Operating revenue grew 1 per cent to $79.5m, "which was encouraging given some difficult market conditions in New Zealand", Mr Dossor said.

Operating expenses rose to $71.8m from $68.7m and the pre-tax profit fell to $7.7m from $10.2m.

Turners Finance delivered a strong performance for the year, increasing earnings by four-fold to $900,000, he said.

Turners Auctions and Turners Fleet revenues were below last year, mainly due to a slowing market for used vehicle sales caused by a glut in Japanese imports, and high fuel prices affecting the price of larger vehicles, Mr Dossor said.

The company made significant investments in technology in the year, launching a new website.

It invested in "Turners Live", allowing customers to bid, from their home or office and is seen as move to counter Trade Me.

During the year, Turners opened a new "Supersite" in Christchurch and a new branch in Napier. The company also opened Smart Autocentre in Auckland, a repair service.

Turners shares closed yesterday at $2.25 and have fallen from $4.20 a year ago.

- NZPA