Turners still hunting for acquisitions
Turners [NZX: TNR], the financial services firm formerly known as Dorchester Pacific, will probably beat annual earnings guidance, though headwinds facing the economy mean it's too early to upgrade the forecast.
Chief executive Paul Byrnes says the company is expected to lift first-half earnings 70% to $9.5 million and will probably exceed the May forecast for pretax profit of $20 million in the 12 months ending March 2016, though it is still too early to formally upgrade guidance.
"With seven months trading to come, and with the potential for some aspects of the local economy to slow down, it is too early to reforecast this current guidance.
"Shareholders can be assured that we will continue to achieve organic profit growth and additional growth through merger and acquisition activity through this year and over the financial years following," Mr Byrnes says.
Turners this week said it wants to buy about a fifth of Motor Trade Finances [NZDX: MTFHC], offering a premium of $1.15 a share, to better reflect the business relationship between the two firms. Wbout 10% of Turners' new loans originate through MTF.
Turners owns almost 1% of MTF, and Mr Byrnes says the offer price will provide the firm a dividend yield of about 9% after tax.
The company has been on an acquisition spree since recapitalising five years ago, and Mr Byrnes said he's still pursuing potential purchases which match the group's strategy, provide sustainable earnings, offer value, and can be integrated into the company.
"I am now spending up to 50% of my time on merger and acquisition activity and the board is actively involved in the process," he says.
Turners shares were unchanged at 29c, and have declined 9.4% this year.