Turners buys Southern Finance
Turners [NZX: TNR], formerly known as Dorchester Pacific, has bought Southern Finance for $5 million, giving the finance company greater exposure in the South Island as it continues to expand its loan book.
The acquisition adds assets valued at $3.3 million and goodwill of $1.7 million, and is expected to immediately boost annual earnings before interest and tax by $750,000, growing to more than $1 million after the first year, Auckland-based Turners says.
Christchurch-based Southern Finance is made up of South Island Vehicle Finance and K Finance, and primarily services the used car market.
"This acquisition provides the ideal base for us to significantly increase and then grow our market share in the South Island, complementing the strengths of Dorchester Finance in the greater Auckland area and Oxford Finance in the lower North Island, " chief executive Paul Byrnes says.
Turners gained a new lease of life in 2010 when Auckland private equity firm the Business Bakery became involved with a recapitalisation plan. Some 7200 investors, owed about $84 million, converted their debenture stock for four different types of security to keep the firm afloat while many other finance companies were failing in the wake of the global financial crisis and a local recession.
Since then it has been on an acquisition spree, buying Levin-based lender Oxford Finance and Greenwich Life Insurance as it looks to triple the size of its insurance business over the next two years.
More recently, it bought NZX-listed car auction house Turners Auctions, to complement its automotive-centric loan book and insurance business, and has taken on the Turners name.
In May, Turners reported a 120% gain in profit to $18.1 million in the year ended March 31, reflecting its car auction house acquisition and its financing businesses performing ahead of forecast. At the time the company said it expects its trading profit to increase to $20 million in 2016, from $14 million this year, without any further mergers or acquisitions.
Turners shares last traded at 27 cents and have gained 19% over the past 12 months.