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Turners delivers higher profit

Last updated 11:11 13/02/2014

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Strong growth in car sales and more customers using financing drove Turners Auctions profit up to $4.8 million last year.

The listed company announced today that its net profit after tax for the year ended December 31, 2013, was up 14 per cent on the previous year.

This was delivered by accelerating revenue of $89.2m, also up 14 per cent on the 2012 year.

Turners said its fleet and finance divisions had provided the growing returns, as it shifted from auction sales to higher-margin retail sales.

Revenue from vehicles acquired to be on-sold by Turners rose 30 per cent, to $46.9m.

In a statement Turners said a shifting emphasis to the retail market had allowed more aggressive pricing, attracting both retail buyers and sellers.

Rising volumes, delivered by buying more "end of life" vehicles, had not disproportionately affected costs, it said.

Turners' consumer finance service, BuyNow, also experienced solid growth, as revenue rose 10 per cent to $6m.

This service allowed customers to buy vehicles using finance provided by Turners, and had resulted in its loan book increasing 20 per cent to $25.6m.

But auction revenue was slightly down, particularly in damaged-vehicle sales. It dropped 1 per cent, to $36.3m.

Turners chairman Michael Dossor said 2013 had been a transitional year, as it focussed on developing new and more profitable business channels.

"Our goal is to grow our market share by creating more opportunities to source and sell vehicles," he said.

"Although we have only recently started to implement our new multi-channel business model, early indications of its success are encouraging and the potential for growth is considerable."

He said the used-car market, which was up 5.4 per cent in 2013, was an enormous opportunity for the company, as it looked to grow its market share in the second-hand vehicle sector.

The company declared a final dividend of 9 cents a share, taking the total dividend 16c for the year.

Shares in Turners were unchanged at $2.35, following the announcement.

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- Fairfax Media

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