Turners' profit surges 120%
Turners' profit surges 120% on the back of acquisitions, bolstered loan book
By Suze Metherell
May 27
(BusinessDesk) - Turners, formerly known as Dorchester
Pacific, more than doubled annual profit, beating guidance,
reflecting its car auction house acquisition and its
financing businesses performing ahead of forecast.
Profit rose to $18.1 million in the year ended March
31, up from $8.2 million a year earlier, the Auckland-based
company said in a statement. Profit before tax was $19
million, ahead of earlier guidance of $17.5 million and up
from $5 million a year earlier. Sales rose 208 percent to
$96.6 million.
The company got a new lease of life in
2010 when Auckland private equity firm the Business Bakery
got involved with a recapitalisation plan in which some
7,200 investors owed about $84 million converted their
debenture stock for four different types of security to keep
the firm afloat while many other finance companies were
failing in the wake of the global financial crisis and a
local recession. Since then it has been on an acquisition
spree, buying Levin-based lender Oxford Finance in March
last year, while post balance date it also bought Greenwich
Life Insurance as it looks to triple the size of its
insurance business over the next two years.
It also
bought the NZX-listed car auction house Turners Auctions
last year, to complement its automotive-centric loan book
and insurance business. Since then it has taken the name and
delisted the company.
"Trading performance of Turners
Group has not missed a beat following acquisition," said
chief executive Paul Byrnes. "The rebranding of the business
from Turners Auctions was completed in the year and the
continuing focus away from wholesale to retail as part of
the multi-channel strategy is evolving as
planned."
Looking ahead, the company expects its trading profit to increase to $20 million in 2016, from $14 million this year, without any further mergers or acquisitions.
In the past year, operating profit at its finance
unit lifted 53 percent to $5.2 percent, while its New
Zealand collection services unit increased 49 percent to
$4.7 million.
“All three finance books (Dorchester
Finance, Oxford Finance and Turners Finance) performed at or
ahead of forecast with acceptable arrears and bad debt
write-off metrics maintained over the year," Byrnes said.
"Total receivables increased by $105 million primarily as a
result of the Oxford Finance and Turners Group
acquisitions."
Operating profit for its Australian collection services fell 36 percent to $223,000, as the strength of the New Zealand dollar against its trans-Tasman counterpart impacted earnings. Meanwhile, its insurance division recorded a 33 percent drop in profit to $799,000 as it was affected by a one-off "reserving rate" due to the lower 10-year interest discount rate, Turners said.
The company will pay a final dividend of 0.6 cents a
share on July 17, up from 0.5 cps the previous
year.
Turners' shares last traded at 31 cents, and
have fallen 3.1 percent since the start of the year.
(BusinessDesk)