Turners Posts 17% EPS Growth and Raises Dividends to 29 Cents in FY25

• Record FY25 NPBT of NZD 54.3 million, up 10%
• Dividends nearly tripled over the past decade, reaching 29 cps
• Auto Retail segment rebounds in H2 despite overall revenue decline
• Strong growth in Finance, Insurance, and Credit Management segments
• Strategic investments in servicing platforms and branch expansion underway

A Decade of Steady Growth Culminates in Record FY25

Turners Automotive Group has capped off a decade of sustainable growth with a robust financial performance for the year ended March 31, 2025. Despite a challenging economic environment in New Zealand, the company posted a 10% increase in net profit before tax (NPBT) to NZD 54.3 million, alongside a 17% rise in net profit after tax (NPAT) to NZD 38.6 million. This result reflects Turners’ diversified business model, which has allowed it to navigate market cycles with resilience.

Dividends have nearly tripled over the past ten years, growing from 10 cents per share (cps) in FY15 to 29 cps in FY25, delivering a yield of approximately 6.6% based on the current share price. This steady increase underscores the company’s commitment to returning value to shareholders while investing in future growth.

Segment Performance: Challenges and Opportunities

The Auto Retail division, Turners’ largest segment, experienced a revenue decline of 4% and an 8% drop in profit, reflecting the broader economic downturn and subdued consumer sentiment in New Zealand. However, the second half of FY25 saw a notable recovery, with improved margins and volumes driven by disciplined pricing strategies, a shift towards domestic sourcing, and inventory repositioning towards more affordable vehicles. Market share gains and a strategic pivot from wholesale auctions to retail sales are expected to continue, supported by plans to open eight new dealerships by FY27.

Meanwhile, the Finance segment delivered strong growth, with revenue up 9% and profit surging 31%. The segment benefited from a favourable interest rate environment, expanding net interest margins and a growing loan book with improving credit quality. Arrears remained well below market levels, highlighting prudent risk management.

Insurance also contributed solidly, with revenue up 3% and profit increasing 13%. The launch of the CONNECT digital platform has enhanced direct-to-consumer engagement and expanded distribution partnerships, positioning the business well for future growth. Claims inflation has stabilized, and effective risk-based pricing has maintained policy sales despite economic headwinds.

Credit Management saw increased demand amid tightening economic conditions, with debt referrals rising across corporate and SME sectors. Revenue grew 5%, and profit rose 11%, reflecting the division’s role in managing rising debt loads.

Strategic Investments and Future Outlook

Turners is expanding beyond its core operations with strategic investments in vehicle servicing and repair platforms. The acquisition of a 50% stake in My Auto Shop and a 13% stake in Quashed complements its existing offerings, aiming to cross-sell services to its customer base and enhance digital capabilities. The servicing business is being rebranded under the Turners name, with break-even targeted by FY26.

Looking ahead, Turners anticipates a gradual economic recovery in New Zealand, which should support margin growth and further profit increases in FY26. The company is on track to reach its FY28 NPBT target of NZD 65 million earlier than expected, driven by branch expansion, brand investment, and operational efficiencies across its diversified segments.

CEO Todd Hunter highlighted the team’s efforts to maintain momentum despite tough conditions, noting the resilience of used vehicle demand and the strength of Turners’ diversified platform. Chairman Grant Baker emphasized the company’s competitive advantages, including a strong culture and shareholder alignment, as key to sustaining long-term value creation.

Bottom Line?

Turners’ FY25 performance not only celebrates a decade of growth but also sets the stage for accelerated profit milestones, making FY26 a pivotal year to watch.

Questions in the middle?

• How will Turners manage credit risk amid rising debt loads in a tightening economy?
• What impact will the servicing and repair acquisitions have on overall profitability?
• Can Turners sustain margin improvements in Auto Retail as economic conditions evolve?