Turners Automotive Group Ltd · NZX:TRA
Turners Automotive — H1 FY2019 Earnings Presentation
21 slides from Turners Automotive's earnings presentation, Nov 27, 2018
Slide 1: Interim Results Presentation
For personal use only Interim Results Presentation For six months ending 30 September 2018 Turners Automotive Group HY19 Interim Results Presentation
Slide 2: Turners: an integrated automotive group
TURNERS: AN For personal use only INTEGRATED AUTOMOTIVE GROUP I NEED TO FINANCE AND INSURE MY VEHICLE • Turners is the biggest seller of used cars, trucks and machinery in NZ. We finance them and I NEED TO BUY A I NEED TO REPAIR insure them for mechanical VEHICLE AND SERVICE MY breakdown, accident a
Slide 3: The Kiwi car economy
THE KIWI CAR ECONOMY For personal use only NZ Used 74,666 3.85m Light vehicles in the NZ vehicle fleet 10,250 EVs import sales 8.6% down used imported car sales were New passenger and light commercial vehicles sold into NZ for 6 months ended Sept 18 As at Sept 2018, double the fleet size down to 76,
Slide 4: HY19 operating environment
HY19 OPERATING ENVIRONMENT For personal use only Ex-overseas registrations lower than record 1H18, consistent with 1H17 which was highest on record. • Softening demand with pressure from increased Ex-Overseas Registrations living and fuel costs First Half Financial Year - Auckland used import sales
Slide 5: HY19 highlights and key events
HY19 HIGHLIGHTS AND KEY EVENTS For personal use only RETAIL FINANCE & INSURANCE EC CREDIT CONTROL • Retail sales through Turners Cars • Oxford Finance new consumer • Dialler technology has delivered up 3% v 1H18 lending up 23% to $52m significant increase in outbound activity, up 96%, leading to a 2
Slide 6: HY19 results snapshot
HY19 RESULTS SNAPSHOT Year on year improvement in revenue and profit For personal use only REVENUE 350 300 Revenue $168.3m, +3% 250 Millions 200 Net Profit Before Tax $16.8m, +18% 2H 150 1H 100 Net Profit After Tax $12.9m, +28% 50 0 NPATA $13.7m, +26% FY15 FY16 FY17 FY18 FY19 Shareholders’ Equity $2
Slide 7: HY18 to HY19 profit before tax bridge
HY18: HY19 PROFIT BEFORE TAX BRIDGE For personal use only • Turners Group improvement in retail sales & market share, however commercial business soft • Buy Right Cars impacted by old stock clearance and reduced margins due to challenging import market conditions (demand, stink bug and Takata airbag
Slide 8: Reconciliation: NPBT to underlying NPBT
RECONCILIATION: NPBT TO UNDERLYING NPBT For personal use only $000s HY19 HY18 Var • Property sale and lease back in line with Turners’ property strategy Underlying Operating Result 13,256 12,864 3% Other Adjustments • Total “unredeemed voucher liability” for Sale of 133 Roscommon Road 3,457 0 ECCC s
Slide 9: Balance sheet
BALANCE SHEET For personal use only $000s HY19 HY18 Cash and cash equivalents 24,085 69,472 Financial assets at fair value 55,272 10,965 • Reduction in cash balances due to Finance Receivables 290,091 269,229 investment of insurance reserves into longer Inventory 42,877 42,143 dated term deposits Pr
Slide 10: Funding mix
FUNDING MIX For personal use only BORROWINGS BY UTILISATION As at 30 Sept 2018 Borrowings $Millions Limit Drawn Undrawn Receivables – Securitisation (BNZ) 150 134 16 Inventory Receivables - Banking Syndicate (ASB/BNZ) 70 44 26 Receivables – MTF 70 55 15 Corporate Corporate & Property [incl Bond] 88
Slide 11: HY19 sector results
HY19 SECTOR RESULTS For personal use only DebtHY19 REVENUE $M REVENUE Manageme 200 nt 150 Annual trends reflect acquisition vs organic growth. Finance & 100 Insurance Auto Retail HY19 – focus on growth of existing 50 businesses after period of sustained acquisition activity 0 HY16 HY17 HY18 HY19 Str
Slide 12: Automotive Retail: Turners Group
AUTOMOTIVE RETAIL Revenue 111.8m -1.5%, Op Profit $8.0m -8.6% For personal use only TURNERS GROUP REVENUE $79.6M, DOWN 6%. OP PROFIT $7.5M, UP 1.4% • Continuing increase in fixed price sales (cf auction or tender) - up 3% YoY, with sales to end users at 68% of all car purchases • Owned fleet reduced
Slide 13: Automotive Retail: Buy Right Cars
AUTOMOTIVE RETAIL Revenue 111.8m -1.5%, Op Profit $8.0m -8.6% For personal use only BUY RIGHT CARS REVENUE $32.2M, UP 11%. OP PROFIT $0.5M, DOWN 63% • New branch opened in Hamilton in September…performing above expectation. • Gross margins per vehicle down 20% to $1,926 per vehicle due to clearance
Slide 14: Automotive Retail expansion and property strategy
AUTOMOTIVE RETAIL EXPANSION & PROPERTY STRATEGY For personal use only • Opened three new sites at end of 1H19 – Hamilton BRC, Wellington City Turners, New Plymouth Turners in start up phase • Lease or buy options considered on merit • Sold 133 Roscommon Road, Wiri to Argosy Property for $8.6M to pro
Slide 15: Finance
FINANCE Revenue 21.6m +21%, Op Profit $5.4m -2% For personal use only Improving Customer Credit Scores Average Customer VEDA 500 • Good progress on repositioning towards lower credit score 450 risk borrowers through tightening of credit 400 policy with particular focus on affordability assessments 3
Slide 16: Insurance
INSURANCE Revenue $25.7m +15%, Op Profit $6.4m +144% For personal use only Net Written Premiums by Policy Type • Improvements in loss ratios across all insurance products. First Half FY19 Combined loss ratio 65% (1H18: 69%) • MBI loss ratio at 76% (1H18 at 78%) Extended Life Payment Warranty • Re-pr
Slide 17: Credit Management
CREDIT MANAGEMENT Revenue $9.3m – 9% Op Profit $3.1m -10% For personal use only 96% increase in outbound calls, leading to a 20% increase in customer connects EC Credit Control Call Performance • Continue to increase debt load from key NZ corporate accounts at expense of competitors (debt load up 24
Slide 18: 2H19 outlook
2H19 OUTLOOK For personal use only • The business has shown some resilience through tough market conditions through Q1 and bounced back strongly in Q2 and the diversified revenue streams have really demonstrated their value through the first half of this year. • However, market conditions, particula
Slide 19: Key focus for 2H19 and FY20
KEY FOCUS FOR 2H19 KEY FOCUS FOR FY20 For personal use only • AUTO RETAIL – lift finance attach rate through training • AUTO RETAIL – develop and extend retail footprint, and development, establish new branches into operating deliver better digital and mobile customer experience, rhythm, managing in
Slide 20: Contact
For personal use only Contact: Todd Hunter CEO Turners Limited T: 64 21 722 818 E: todd.hunter@turners.co.nz HY19 Interim Results Presentation 20
Slide 21: Disclaimer
DISCLAIMER For personal use only Turners Automotive Group the (company) is solely responsible for the content of this document. This document is not an investment statement or prospectus and does not constitute an offer of securities. This document or any other written or oral statements made by, or
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