Turners Faces Supply and Credit Risks Despite Strong First-Half Results

Strong First Half Performance Despite Market Headwinds

Turners Automotive Group has once again demonstrated resilience in a challenging economic environment, reporting a record first-half result for the six months ending September 2025. The group’s revenue rose 5% to NZD 219 million, while net profit after tax (NPAT) climbed 13% to NZD 21.9 million. This performance underscores the strength of Turners’ diversified business model, which spans Auto Retail, Finance, Insurance, Servicing & Repairs, and Credit Management.

Finance and Insurance Lead Growth

The Finance division emerged as the primary growth engine, delivering an 18% increase in profit and expanding its loan book by 13%. This was supported by strong loan origination and improved credit quality, alongside stable net interest margins aided by easing funding rates. Meanwhile, the Insurance segment continued its steady premium growth of 10%, bolstered by partnerships with NZ AA and Vero, maintaining stable claims ratios that reflect effective risk pricing.

Auto Retail Navigates Supply Constraints

Auto Retail faced ongoing challenges with vehicle supply, as sourcing stock remains difficult amid sector consolidation and reduced dealer numbers. Despite patchy demand, Turners managed to grow margins through disciplined buying and tighter inventory management, supported by a significant uplift in brand marketing with the launch of the Tina2.0 campaign. Operational efficiencies also contributed to margin expansion during the period.

Capital Management and Dividend Confidence

Turners completed a NZD 200 million securitisation term-out, which has improved funding costs and reduced capital requirements, strengthening the balance sheet. The Board declared an interim dividend of 8.0 cents per share, fully imputed, reflecting the company’s commitment to delivering consistent shareholder returns. The dividend payout aligns with the policy of distributing 60–70% of net profit after tax.

Outlook – Cautious Optimism for FY26

Looking ahead, Turners anticipates a continued two-speed economy with some uncertainty around consumer demand recovery. Nevertheless, the group is on track to deliver another record full-year result, forecasting net profit before tax (NPBT) around NZD 60 million. This would support a full-year dividend of at least 32 cents per share, up from 29 cents last year. Growth opportunities remain in Auto Retail through branch expansion and a recovering lease market, while Finance aims to grow its loan book with maintained credit quality. Insurance is expected to sustain its solid performance, whereas Credit Management faces ongoing challenges due to constrained consumer repayment capacity.

Group CEO Todd Hunter highlighted the company’s strengthened position, noting, “Our business has performed exceptionally well through the first half. We’ve strengthened every part of our model, from sourcing and lending quality to capital efficiency. As the economy starts to recover, Turners is well positioned to deliver further record years, underpinned by our brand strength, motivated team, and reliable execution.”