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Turners Automotive Group Limited – Presentation

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On the 24th November we had a good video conference with Turners. Tina (marketing character) was busy enjoying the cars so instead we were provided with an update from Todd Hunter, CEO and Aaron Saunders, their CFO.

The news from them was pretty positive with 24% growth in the first half of this year and whilst Auckland’s lockdown had slowed progress, they were bouncing back well. New sites are being developed with Nelson, Napier and Rotorua sites coming on stream. Rotorua had just become operational and was running profitably already.

Supply constraints are affecting the used car market, particularly imports from Japan but Turners have good supply contracts in place and are managing to maintain stock for the market via contracts with government departments and partners in the fleet and hire car business. If other dealerships struggle with supply this could see Turners extend their market share with potential cross selling opportunities to their financing and insurance businesses.

These areas are doing well with good quality loans on their books. The overall summary was that both Todd and Aaron were confident that their targets were being met and they were on track for a positive year.

They are anticipating profit to be in the region of $40m – $42m in 2022 with a target of $45m annual profit for 2024. Again, both were confident this future target would be met.

Turners are also one of the few companies paying quarterly dividends with a gross dividend yield in excess of 6% so could be a worthwhile consideration for customers seeking an income stream as well as the potential capital growth.

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