Turners Auctions Ltd 2008 Half Year Results

Turners Auctions Ltd 2008 Half Year Results Summary

Turners Auctions today announced its unaudited half year net profit after tax of $812,000, up 55 percent on the same time last year. The company reported a 1 percent increase in revenues to $41.8m. Auction entries have increased 8 percent over the first half compared to the prior year, reflecting a strong uplift in activity. The group generated net cash inflows from operating activities of $3.0m, a 17 percent increase on the prior period.

Auction unit sales have decreased by 7 percent over the same period last year, highlighting the large gap between the expectations of vendors and buyers in the current market. Initiatives around yield improvement, including pricing reviews and increased sales of add-on finance and insurance products, have helped protect revenues from the overall decline in the used car market. Sales of repossessed vehicles on behalf of finance companies have been strong (up 106 percent year to date) and the commercial business has undertaken more insolvency work.

This is a very good result, given that the current environment is the most challenging experienced in the industry for many years. The combination of rapidly declining consumer confidence, pressure on household incomes, fuel price increases and emission regulations has resulted in the second-hand car market being hit extremely hard in the first half of the year. The market was down 6.5 percent (or 33,000 units) compared to 2007 levels. This is the lowest number of second-hand cars sold in a 6 month period since 2002.

An extensive review of the property requirement for the group has been carried out resulting in some short-term savings through amalgamation of branches or subletting properties. This has enabled the company to keep property costs in line with 2007, which is pleasing given the upward trend in commercial rents. Staff expenses are higher compared to last year due to the impact of legislative changes affecting holiday pay and the minimum wage. As indicated at the AGM in April, the company committed to investing in a repositioning of the Turners brand with a large advertising and public relations campaign completed over the May to July period which has resulted in a significant increase in awareness levels. Two further initiatives have been launched in the first half. Firstly the new version of our online bidding application, Turners “Live,” which now accounts for 19 percent of sales. Secondly we have introduced “BuyNow” which provides a new way of buying vehicles and will attract a new type of customer to Turners Auctions.

The directors declared an interim dividend of 2.5 cents per share fully imputed.

Results summary:
• Net Profit after Tax $812,000, up 55%
• Operating Revenues $41.8 million, up 1%
• Total Group Assets $41.2 million, down 10%
• Interim fully imputed dividend payment 2.5 cps

ENDS

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