Turners says pretax earnings may rise 14% in first half

The company gave guidance for pretax profit of $11.6 million in the six months ending Sept. 30.

Turners Group [NZX: TNR], the financial services firm formerly known as Dorchester Pacific, said pretax earnings may rise 14 percent in the first half, putting the company on track for annual profit growth.

The company gave guidance for pretax profit of $11.6 million in the six months ending Sept. 30, from $10.3 million a year earlier. Earnings on that basis are expected to grow at least 10 percent in the year ending March 31, it told shareholders at their annual meeting in Auckland today.

Turners has built itself into an integrated automotive financial services group, with a finance and insurance business which generated 41 percent of operating profit last year, retail arm trading in vehicles and equipment that contributed 37 percent of earnings and debt management, which contributed 22 percent.

Last month, the company announced a new offer of up to $30 million of convertible bonds, subject to approval by shareholders at today's meeting. Proceeds of the new issue will be used to finance the redemption of the existing bonds that aren't converted, which will amount to about $5.6 million, while the balance would be held for potential acquisition opportunities.

Approval is needed under NZX listing rules covering related parties because the biggest shareholders in Turners, Hugh Green Investments with 22 percent, the Business Bakery (13 percent), Harrigens Trustees (7.6 percent) and Bartel Holdings (6.9 percent) plan to participate in the bond issue and would increase their shareholdings when they converted. Those four shareholders own 49.8 percent of the existing bonds that mature this month and would be entitled to up to 46 percent of the new issue under the maximum allocation priority for existing bondholders.


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