Turners Automotive Posts Record FY26 Profit and Raises Dividend

Record Profit Amid Challenging Market Conditions

Turners Automotive Group (NZX:TRA) has extended its track record of resilience with record FY26 financial results, posting revenue of NZ$451.2 million, a 9% increase on the prior year, and normalised EBIT of NZ$70.6 million, up 14%. The company declared a fully imputed dividend of 33.0 cents per share, up 14% on FY25, marking over a decade of sustained dividend growth.

The robust performance was driven by strong contributions from the Auto Retail, Finance, and Insurance divisions, which offset a modest decline in Credit Management. The company highlighted that its diversified earnings base remains a key strength, cushioning it against the softer conditions experienced in some segments.

Funding Improvements and Branch Expansion Plans

Turners has enhanced its funding position with new bank facilities and a NZ$200 million securitisation warehouse, which have improved pricing, increased capacity, and lowered capital requirements. This solid financial footing supports an ambitious branch expansion pipeline, with six new or replacement branches across New Zealand scheduled to open between late FY27 and FY28.

Notable projects include the transformation of the Wiri site in Auckland into a 10,000 square metre car branch expected to add NZ$700,000 in annual profit, alongside developments in Tauranga, Whanganui, Hastings, Hamilton, and Drury. While these expansions will not impact profits in FY27, they are expected to contribute incremental earnings from FY28 onwards.

Market Headwinds and Consumer Confidence

Despite the strong FY26 results, Turners acknowledged headwinds stemming from the ongoing Middle East conflict, which has dampened New Zealand’s economic recovery and consumer confidence. Higher fuel prices have materially reduced demand for diesel and larger petrol vehicles, leading to tougher trading conditions in the first half of FY27 compared to prior periods.

The company noted a more pronounced impact on vehicle margins and lower sales volumes of ex-lease diesel utilities and SUVs, with consignment units sold down 14% year-to-date. These are viewed as timing issues expected to resolve as vendor pricing expectations adjust.

Strong Growth in Finance and Insurance Divisions

Turners’ Finance division is back in growth mode, with a 7.5% loan book increase in the first four months of FY27 and strong operating leverage demonstrated in FY26. Consumer lending has expanded while commercial lending has tightened, supported by disciplined credit policies and a new unsecured lending product.

The Insurance division continues to deliver stable growth driven by strong premium increases through dealer and finance broker partnerships, alongside a growing direct-to-consumer digital platform. Claims cost inflation has been managed effectively despite global supply chain pressures.

Medium-Term Targets and Strategic Confidence

Management reaffirmed its medium-term NPBT target of NZ$100 million by FY31, which represents a 50% organic growth uplift from FY26 results, supplemented by modest inorganic growth. This target remains unchanged despite short-term risks linked to geopolitical uncertainty and consumer demand fluctuations.

CEO Todd Hunter emphasised the company’s confidence in its long-term strategy, highlighting a strong culture of employee engagement and ownership, a unique used car platform, and ongoing branch expansion as key pillars for future growth.

Turners’ diversified business model and improved funding position provide a buffer against current market volatility, with the group tracking ahead of last year’s NPBT in the April-July FY27 period by 4%, thanks to Finance growth offsetting softer Auto Retail profits. The company continues to monitor risks closely while progressing its growth agenda.

Governance and Shareholder Support

The 2026 Annual Meeting included the reappointment of auditor Baker Tilly Staples Rodway and the re-election of directors Matthew Harrison, Lauren Quaintance, and John Roberts, all receiving strong shareholder backing. Voting was conducted by poll, with proxies representing 28.53% of shares on issue.