Turners Auto Group's 2024 Annual Meeting Highlights Resilience and Growth
TRA (TRA) Share Update September 2024 Tuesday 17th
Turners Auto Group Reports Strong Financial Performance Despite Economic Challenges
Turners Auto Group has demonstrated strong financial performance and strategic growth initiatives during its 2024 Annual Meeting, showcasing resilience in a challenging economic environment.
Instant Summary:
- Record result despite economic pressures.
- Auto Retail division profits grew by 27%, Insurance by 15%, and Credit by 9%.
- Full year dividend at 25.5 cps, yielding approximately 9% annually.
- Revenue increased by 7% to $417.0M.
- Net Profit Before Tax (NPBT) rose by 8% to $49.1M.
- Earnings per share remained stable at 37.7 cps.
Financial Performance
Turners Auto Group reported a record financial performance despite significant economic pressures. The company's revenue increased by 7% to $417.0 million, while Net Profit Before Tax (NPBT) rose by 8% to $49.1 million. Earnings per share remained stable at 37.7 cents per share.
The Auto Retail division saw a 27% increase in profits, while the Insurance and Credit divisions grew by 15% and 9%, respectively. The Finance division, however, continued to face challenges due to rising interest rates.
Dividend and Shareholder Value
Turners Auto Group declared a full-year dividend of 25.5 cents per share, yielding approximately 9% based on the current share price. This marks a significant achievement for the company, reflecting its commitment to delivering strong, sustainable, and growing dividends.
Strategic Investments
The company has made strategic investments to position itself for future growth. Turners invested $3.35 million for a 50% stake in My Auto Shop, a vehicle repair platform with over 300 MTA approved repairers. This investment is expected to capitalize on the $3 billion auto repair market in New Zealand.
Additionally, Turners invested $1 million in Quashed, a Kiwi company that allows consumers to compare, shop, and manage insurance policies. This investment aligns with Turners' strategy to provide more value to its customer base.
Market Conditions and Outlook
Despite regulatory changes impacting the used car market, Turners Auto Group's unit sales tracked 7% ahead year-to-date. The company remains optimistic about opportunities in the markets it operates in and is well-positioned to take advantage of these opportunities.
Turners has set a new medium-term target of $65 million NPBT by FY28, with plans for organic growth in the Auto Retail division and continued expansion of its Finance and Insurance businesses.
The strong financial performance and strategic investments are likely to positively impact Turners Auto Group's stock. The company's ability to deliver robust results despite economic challenges demonstrates its resilience and effective management. The strategic investments in My Auto Shop and Quashed are expected to drive future growth and enhance shareholder value.
Investor Reaction:
Analysts are likely to react positively to Turners Auto Group's strong financial performance and strategic growth initiatives. The company's ability to maintain stable earnings per share and deliver a high dividend yield will be viewed favorably by investors. However, the ongoing challenges in the Finance division due to rising interest rates may warrant cautious optimism.
Conclusion:
Investors should consider Turners Auto Group's strong financial performance and strategic investments as indicators of the company's resilience and growth potential. The company's commitment to delivering shareholder value through dividends and strategic growth initiatives makes it an attractive investment opportunity. Stay informed on Turners Auto Group's developments and assess the potential long-term impacts on your portfolio.