Turners Auto upgrades outlook, sees record pre-tax profit

Turners Auto says it sources 90 per cent of its cars domestically. Photo / NZ Herald

Turners Automotive Group said it now expects to report a record pre-tax profit for the March year of $42m-$43m, despite the impact of Covid-19 on its business.

The company had previously forecast a pre-tax profit of $40m to $42m.

Turners expects to pay record full-year dividends of at least 23 cents per share, fully imputed, from 22cps previously.

For the March 2021 year, Turners reported a pre-tax profit of $37.4m and a net profit of $26.9m.

Turners said its upcoming result would demonstrate its resilience in the face of Covid-19, its diversification strategy, and would include annuity income from its insurance and finance business.

Chief executive Todd Hunter says the Omicron outbreak was disrupting both the wider used car market, as well as Turners' operations.

Vehicle processing capacity had reduced with a number of staff currently isolating due to testing positive or as household contacts, he said.

"Demand for used cars has dropped away in the second half of February, however, Turners has continued to gain market share in auto retail, reflecting a widening advantage over competitors."

Given the nature of the Omicron outbreak, Turners said it expects a return to normal operating conditions reasonably quickly following the peak.

Turners' finance and insurance segments continued to deliver quality annuity earnings despite the widely publicised regulatory changes to the Credit Contracts and Consumer Finance Act and challenges for some potential borrowers.

In auto retail, the ability to source vehicles domestically - more than 90 per cent of Turners' stock - continued to prove an advantage as Covid-19 and government regulation effectively reduced the supply of imported used cars from Japan.

Hunter also said the company's "Tina from Turners" brand campaign had exceeded expectations.

Shares in Turners Automotive last traded at $4.10 - up 10c or 2.5 per cent from Friday's close.