Turners annual earnings beat guidance, CEO Byrnes to exit top job
Turners Group [NZX: TNR], the financial services firm, beat annual earnings guidance as its finance units performed ahead of forecast and its debt collection business delivered a record year. Chief executive Paul Byrnes said he will hand over the top job to focus on a mergers and acquisitions role.
Pretax earnings rose 13 percent to $21.6 million in the year ended March 31, exceeding this month's guidance for earnings to be between $21.3 million and $21.5 million, which was itself an upgrade. Revenue jumped 76 percent to $172 million.
"It had been a very positive year with all trading operations delivering increased operating profits with a number of the businesses significantly ahead of both last year and budget," Byrnes said. "The company continues to strengthen its positioning as an integrated financial services group across vehicle buying and selling, loan and insurance origination through to debt management and recovery."
Turners became the name for the group after Dorchester Pacific acquired Turners Auctions in 2014 to complement its largely automotive loan book and insurance business. It survived the collapse of many finance companies in the wake of the global financial crisis. Since then, it has been on a buying spree, adding Levin-based lender Oxford Finance, Greenwich Life Insurance and Christchurch-based Southern Finance.
The company's auctions and fleet business, Turners' biggest segment, more than tripled operating profit to $10 million on a 165 percent boost in external revenue to $117.8 million, while its finance business lifted earnings 63 percent to $9.8 million on a 25 percent gain in revenue to $24.4 million.
Collection services in New Zealand boosted earnings 23 percent to $5.8 million on largely flat revenue of $9.8 million.
"The EC Credit debt recovery business had a record year with increased contingency commission revenue from the major New Zealand banks and institutional clients," Byrnes said.
The Australian division posted earnings of $213,000 on sales of $8.6 million. The insurance unit lifted operating profit 75 percent to $1.4 million on a 52 percent increase in revenue to $10.6 million.
The financial services group today said chief operating officer Todd Hunter will take over as CEO from next month, while Byrnes will remain an executive director focusing on M&A under a two-year contract.
Chairman Grant Baker said the group is actively considering a number of targets, and "will hope to announce at least one further acquisition in coming months."
The board declared a final dividend of 7 cents per share, payable on July 28 with a July 21 record date. That takes the annual payout to 13 cents.
Net profit fell 14 percent to $15.6 million as Turners provided for an increased tax expense.
The shares rose 1 percent to $3.15 and have gained 4 percent so far this year.