Turners Automotive Group (TRA) H1 2025 earnings summary

Executive summary

• Achieved record net profit before tax (NPBT) of $26.9m for HY24/HY25, up 5% year-over-year, despite a challenging macroeconomic environment and significant retail downturn.

• Diversified business model enabled resilience, with strong Finance and Insurance segments offsetting weaker Auto Retail; credit management also contributed.

• Maintained high employee engagement and share ownership, with industry recognition including finalist in Deloitte Top 200 Awards and multiple marketing awards.

• Profit mix shifted: Auto Retail down, Finance up; used car volumes resilient, new car demand weak.

• 2H25 trading expected to strengthen across all divisions, with positive outlook for margin recovery.

Financial highlights

• Revenue for HY24/HY25 was $209.0m, down 2% year-over-year; EBIT $31.0m, up 3%; NPBT $26.9m, up 5%; NPAT $19.3m, up 4%.

• Earnings per share 21.8 cps, up 2%; Q2/interim dividend declared at 7.0 cps; full-year dividend forecast at least 27 cps, up 6% year-over-year.

• Shareholders' equity at $287.7m as of 30 Sept 2024; total assets reached $875.5m.

• Operating cash flow improved to $26.9m from $14.6m in the prior period.

• Dividend payout ratio maintained at 60-70% of NPAT, with a gross yield of 8.3% pa based on projected dividend.

Outlook and guidance

• Reaffirmed guidance to exceed $50m NPBT for FY25, with positive trading and margin conditions expected in H2.

• Expecting improved trading conditions as interest rates drop over the next 6–9 months; interest rate environment turning favorable for Finance.

• Ongoing branch expansion in Christchurch, Tauranga, Napier, and other regions, with incremental benefits expected.

• Auto Retail: Build phase with new sites, focus on wholesale-to-retail transition, and stabilizing vehicle pricing.

• Insurance: Earned premium and claims ratios stable, with new distribution and direct sales expected to contribute.