Turners Automotive has seen its half-year after-tax profit rise 8 percent. Photo: RNZ / Nate McKinnon
Strong growth in used car revenue has driven Turners Automotive to a better half year result, despite challenging economic conditions.
Key numbers for the six months ended September compared with a year ago:
- Net profit $18.5m vs $17.1m
- Revenue $213.9m vs $185m
- Underlying earnings $30.2m vs $26m
- Interim dividend 6 cents a share
The automotive retail and finance company saw revenue increase 16 percent, while its after-tax profit rose 8 percent.
Auto revenue was 20 percent higher at $156.1 million.
Chief executive Todd Hunter said the result showed it was well-positioned to grow when market conditions eventually improved.
"With the NZ used car market growing 6 percent year to date, Turners has grown market share and volumes to produce a stand-out result," he said.
Hunter said the number of used car dealers in the country had fallen 18 percent from its peak in 2017, and Turners was able to capitalise by growing its share in the used car market to about 10 percent.
"As market conditions stabilise, we are well placed to continue our strong growth underpinned by our network expansion as well as our agile sourcing strategy that is driving additional sales."
Hunter said despite the weaker economic conditions, the used car market performed well as cars were a necessity for most households.
He said demand for cars at the lower end of the market was stronger, particularly within the $10-15,000 price range.
The higher interest rate environment negatively affected its net interest margin, but Turners said it had stabilised and expected a gradual recovery.
It said finance arrears had increased from historic lows, but were performing better than market levels.
Turners reaffirmed its full year guidance, which it said would be ahead of 2023.