How Turners Automotive Group Achieved Record Profit Amid Market Headwinds
Turners Automotive Group has posted a resilient and record first-half result for FY26, with net profit before tax up 13% despite ongoing economic challenges. The company’s diversified model and strategic capital moves underpin its confident outlook.
- 13% increase in net profit before tax to NZ$30.4 million
- 5% revenue growth to NZ$219 million driven by Auto Retail and Finance
- New NZ$200 million securitisation warehouse improves capital efficiency
- Used car market remains resilient despite lower dealer numbers and import constraints
- Dividend guidance maintained at a minimum of 32 cents per share for FY26
Resilience in a Challenging Market
Turners Automotive Group has once again demonstrated its resilience with a record first-half result for the six months ending September 30, 2025. Despite a tough consumer environment marked by a two-speed economy and regulatory headwinds, the company reported a 13% increase in net profit before tax (NPBT) to NZ$30.4 million on revenues of NZ$219 million, up 5% from the previous year.
The New Zealand used car market, while facing challenges such as a decline in registered dealers to the lowest level since 2012 and a 13.5% drop in used import registrations, continues to show surprising strength. Turners has capitalised on this by improving vehicle margins in its Auto Retail division and expanding its Finance and Insurance segments.
Diversified Growth and Strategic Capital Management
Turners’ diversified business model has been a key factor in its success. The Auto Retail division saw a 9% increase in segment profit, driven by disciplined stock purchasing and improved margins on owned vehicles. Meanwhile, the Finance division grew its loan book by 13%, with credit quality improving and net interest margins stabilising around 6%. The Insurance segment also contributed positively, with a 10% increase in gross written premiums and the launch of a digital direct platform in partnership with NZ AA.
Capital effectiveness remains a priority, highlighted by the establishment of a new NZ$200 million securitisation warehouse. This move has significantly reduced Turners’ capital requirements from 8% to 1.4%, freeing up resources to support growth initiatives without the need for additional capital. The company continues to focus capital allocation on its highest-return areas – Auto Retail expansion and Finance book growth.
Branch Expansion and Brand Strength
Turners is actively expanding its physical footprint, with several new branches completed or underway across New Zealand, including Invercargill, Christchurch, Napier, and Dunedin. The rebranding of MyAutoShop to Turners Servicing and Repairs leverages the strong Turners brand equity and positions the company for scalable growth in the fragmented auto repair market.
Employee engagement remains high, with 67% share ownership among staff and a strong internal promotion culture, underscoring the company’s robust corporate culture as a competitive advantage.
Outlook and Market Dynamics
Looking ahead, Turners anticipates a continued two-speed economy with a gradual recovery in consumer demand. The company is on track to deliver another record full-year NPBT of around NZ$60 million and expects to maintain a dividend payout of at least 32 cents per share, translating to a gross yield of approximately 5.8% based on the current share price.
Regulatory changes, particularly the easing of the Clean Car Standard, are expected to benefit Turners by increasing vehicle replacements and transactions, supporting margins and financing opportunities. However, the Credit Management division faces ongoing challenges due to economic pressures affecting consumers’ ability to meet payment arrangements, warranting close monitoring.
Bottom Line?
Turners’ strategic agility and diversified model position it well for growth, but economic and regulatory uncertainties will test its resilience in the months ahead.
Questions in the middle?
- How will Turners manage credit risks amid ongoing economic pressures on consumers?
- What impact will the easing of the Clean Car Standard have on vehicle sourcing and margins?
- Can Turners sustain its loan book growth and net interest margins in a competitive finance market?
