Savings, margins boost Turners
Turners Auctions is looking to go on a buying spree after lifting its full-year net profit by 14 per cent on the back of online cost savings and profit margin gains.
The car auctioneer yesterday reported full year net earnings of $4.2 million for the 12 months to December, up from $3.7m in the same period a year ago.
The earnings, which follow a 22 per cent improvement in 2011, pushed the firm's shares 4.7 per cent higher to close at $2.21 yesterday, about 50 per cent above where they were 12 months ago.
Chief executive Graham Roberts said the improved earnings provided a base to fund a number of potential acquisitions this year, but the board had taken the additional step of not paying a special dividend, to boost its balance sheet.
Turners Auctions declared a fully imputed final dividend of 8 cents per share, up 33 per cent on last year, taking the total dividend for 2012 to 15cps.
That was shy of last year's 17cps payment, which included a 6cps special dividend. Cash holdings, meanwhile, stood at $13.9m, up $2m on a year ago.
"Obviously we have cash but we want to hold onto it to make those investments within that period," Graham said, without giving any detail on what the acquisitions might be.
The firm is also looking to extend operational improvements in the new financial year, with a website relaunch and shift to a new business operating system waiting in the wings.
Last year the firm reduced its operating and finance costs (excluding $31m in expenses related to fleet division acquisitions) by 1.2 per cent to $41.5m, largely by shifting bricks and mortar operations online.
Revenue rose 4 per cent to $78.2m in the period, with a pick- up in the new car buying flowing through into the used car side of the market as people traded in their old vehicles.
Roberts said the additional supply had a flow-on effect, luring consumers into the market who had been holding onto older vehicles since the global financial crisis.
Revenue gains were led by the firm's car divisions, although activity in the fleet, damaged vehicle and commercial and truck divisions was steady.
The firm said its policy of ramping up vehicle purchases paid off for its fleet business, helped by tighter supply of vehicles from Japan due to tougher emission standards which came into effect last year.
Taranaki Daily News