Turners Automotive Group, New Zealand's largest second-hand vehicle retailer, says its non-recourse financing tie-up with Motor Trade Finance has continued to be popular, though the finance market is still very competitive.
This morning, Turners said revenue rose 44 percent to $163.8 million in the six months ended Sept. 30, while net profit increased 18 percent to $10 million. The company is forecasting full-year pre-tax earnings of between $29 million and $31 million, compared with $24.6 million in the 2017 financial year.
On a conference call following the release, chief executive Todd Hunter said improvements in the company's finance sector result was down to a $62 million increase in the loan book since March 2017, with growth from MTF and Turners' own retail channels.
Earnings from the automotive retail division rose 33 percent to $115.7 million, with Turners saying organic growth has been underpinned by strong used-car sales and loan origination across the market. Finance revenue gained 39 percent to $17.8 million, while earnings from insurance more than quadrupled to $22.4 million from $5 million a year earlier. The company's organic growth rate is at just under 19 percent, Hunter said.
The two companies announced the non-recourse lending partnership last November. The offering allows MTF franchisees and dealers to sell vehicles to people with higher credit risk, with Turners funding the lending and left to chase defaulters. When it was announced, Hunter said the company had projected that it could become "a $50 million ledger within two years." Today's results showed the MTF loan book was worth $51 million at the end of the first half.
