Turners Automotive Group Limited has announced an upgrade to its 2024 financial year guidance to a net profit before tax of at least $48 million, ahead of the $45.5 million achieved in FY23.
Now an NZX top 50 company, this will be Turners’ fourth consecutive record profit result. With more certainty around the full-year result, the forecast dividend has been increased to 25 cents per share (+9 per cent year-on-year), up from prior guidance of 24 cents per share.
Turners says it’s approaching a decade of sustainable dividend growth, with an 11 per cent compound annual dividend growth rate since the 2015 financial year.
The third quarter 2024 dividend will be paid in late March, with the final dividend for FY2024 to be paid in late July. Dividends will be fully imputed and the Directors expect that the Turners’ Dividend Reinvestment Plan (DRP) will continue to apply to both these dividends.
“The NZ used car market and the Turners’ business continue to demonstrate strong resilience despite a broader economy under pressure,” Turners said in a statement.
“Meanwhile, stabilisation in the official cash rate (OCR) is turning from a headwind into a tailwind for the Finance business.”
The company will report its full-year results in late May.
Turners also reported several updates regarding other segments of the business, including the opening of its new Napier branch last week.
In the ‘Auto Retail’ segment, the company reports that vehicle margins on owned stock continue to hold up well and progress is being made in the transition of wholesale auction units into the retail sales channel. Turners also reports that damaged and of life vehicle volumes, excluding one-off weather events, continue to grow.
As for the ‘Finance’ segment, interest margins have stabilised and the company says it has seen a small expansion in the past few months. The loan book is growing at a modest pace and arrears are performing well within expected levels, but there is still some sensitivity with the official cash rate (OCR) track.
On the ‘Insurance’ side of things, Turners says new policy sales are “tracking well” and ahead of FY23. It also says investment returns are continuing to improve.
Concerning ‘Credit Management’, debt load levels are increasing, as is the volume of payment arrangements in place, although economic conditions are making payment arrangements more difficult.
