Turners Group Six Months Results

Turners Group NZ Limited (previously Turners Auctions Limited) has delivered an uplift in its six month result as it continues to build on its new multi-channel sales model. The Fleet and Finance divisions continue to show strong growth and were both up by more than 35% compared to the previous first half year. While revenue from Auction sales was down slightly, the result demonstrates the pleasing recovery of the Auctions division following the loss of a major contract early in the 2013 financial year.

For the second six months in a row, Fleet revenue exceeded Auctions revenue. This is a reflection of the strategic shift from auction sales to higher margin retail sales. The Fleet division, where vehicles are acquired and on-sold by Turners, benefitted from the growing popularity of Turners’ BuyNow and CashNow services, where customers can sell and buy cars for cash, rather than through auction.

Market conditions are moving in favour of customers purchasing used vehicles with a strong New Zealand dollar, heavy discounting on new cars and an influx of imports from Japan leading to a surge in supply. This is having a positive flow-on effect for Turners and they expect good trading conditions for the second half of their financial year.

Changes to the Consumer Guarantees Act came into effect on 18 June 2014, giving consumers who buy through auction, either on-site or online, the same protection as any other business to consumer sales transactions. This is great news for consumers as it reduces the risk associated with buying any product, not just a vehicle, at auction.

Trade Me is one of Turners fastest growing sales channels and they believe that the increased protection and reduction in risk provided under the new Consumer Guarantees Act will encourage even more consumers to buy a used vehicle through their online auction channels.

To meet the increasing demand from customers, Turners will be expanding their operations in Christchurch by establishing a separate site for damaged vehicle storage, trucks and machinery sales.

This is an exciting time for the Company with their blueprint for growth continuing to drive strong and pleasing improvements. Turners are pleased with their performance in the first half of their financial year, and in line with previous experience, they expect to see sales increase in the second half. The outlook for FY14 NPAT is growth in the range of 5% - 10% over 2013 full year profits.

For more information please visit www.turners.co.nz .