Turners net profit up 16pc to record, macro headwinds ahead

Turners Automotive has reported a strong lift in annual net profit. Photo / File

Turners Automotive said its net profit rose by 16 per cent to a record $31.3 million in the March year, despite Covid-19 disruption.

The car auction firm said its earnings before interest and tax rose by 11 per cent to $47.7m while its underlying net profit before tax gained 29 per cent o $44.1m.

The pre-tax figure was in line with Turners' earnings guidance issued in March.

Revenue for the year lifted 15 per cent to $342.0m.

Turners declared a final dividend of 7.0 cents, bringing the full-year dividend to 23.0 cents.

Market share continued to grow in Turners' auto retail division, with a good pipeline of new branches building.

However, Turners said macro headwinds - such as inflation and higher interest rates - were starting to impact.

Much like the previous pandemic-affected year, Turners said it had demonstrated earnings resilience and strong growth credentials.

By division, Turners' profit grew by 24 per cent in insurance, 14 per cent in finance and 26 per cent in automotive retail.

Revenue in the credit management business was down on last year's result.

"Whilst the near-term economic outlook is looking much more uncertain, our business has never been in better shape and we are ready for whatever comes next," chief executive Todd Hunter said.

Chairman Grant Baker said Turners' organic growth was its real success story.

"Our internal confidence to keep expanding our auto retail footprint is very high, and combined with the property investments we have made into network expansion, is delivering further gains to shareholders.

"Unrecognised property gains across our property portfolio now add up to 22 cps, on top of the share price growth and dividends they have received over the last 12 months.

"Our company continues to extend its competitive moat and build scale."

Despite the Omicron impacts still being felt, the year had started well, with April-2022 results ahead of April-2021.

"However, whilst pandemic uncertainty has decreased, New Zealand's economic uncertainty has increased," Turners said.

"Looking beyond 2023 we remain very confident about further growth over the medium to longer term and we have updated our three-year rolling target to cross over $50m of profit before tax by 2025."