Turners Delivers Record FY26 as Core Divisions Grow and FY31 Targets Remain on Track

About Turners Automotive Group Ltd

Turners Automotive Group Ltd (ASX: TRA) is an integrated financial services group primarily operating in the automotive sector. Its key businesses include used vehicle retailing, automotive finance, insurance, servicing and repairs, and credit management.

Record earnings showed platform strength

The headline result showed a business continuing to compound despite a mixed consumer backdrop. Normalised NPBT increased 16 per cent to $63.2 million, while normalised NPAT rose 18 per cent to $45.6 million. Reported NPAT was $38.2 million, down 1 per cent, after including a non-cash goodwill write-down of $7.5 million relating to EC Credit Management.

The year was split into two clear halves. The first half was affected by soft consumer demand and tighter margins, while the second half improved as consumer confidence recovered and Turners benefited from proactive stock management. The company said Q4 was a record quarter, supported by stronger discipline around stock, margin and credit.

This matters because Turners is not relying on one earnings stream. Each of its three core automotive divisions, Auto Retail, Finance and Insurance delivered profit growth. That diversification helped offset the weaker performance from EC Credit and supported the group’s broader earnings momentum.

Auto Retail recovered strongly in the second half

Auto Retail revenue increased 10 per cent to $315.3 million, while segment NPBT rose 12 per cent to $32.6 million. The division faced constrained sourcing and tight margins in the first half, but stronger sourcing initiatives, pricing optimisation and inventory discipline supported margin expansion through the second half.

Total owned units sold increased 9 per cent, with Turners maintaining its focus on the lower-priced vehicle segment, where demand has been more resilient. Operational efficiency gains also supported higher stock turn and lower working capital.

The company’s Christchurch expansion was another positive. Three new Christchurch branches opened in the first half of FY26 and are now fully operational. Turners said these branches drove a 22 per cent increase in local units sold across the Christchurch region, supporting confidence in its branch rollout economics.

The commercial division also performed strongly, with damaged and end-of-life vehicle revenue up 10 per cent and Trucks and Machinery revenue up 8 per cent. This adds another layer of earnings diversity within Auto Retail.

Finance was a standout performer

Finance delivered one of the strongest results across the group. Revenue increased 13 per cent to $77.0 million, while segment NPBT rose 19 per cent to $19.2 million. The loan book grew 27 per cent to $566 million, up from $447 million in the prior year.

Importantly, this growth was achieved while maintaining disciplined credit settings. Turners said credit policy was tightened through the year, and premium-tier lending now represents 59 per cent of the ledger, up from 56 per cent at March 2025. Consumer arrears were 2.5 per cent at March 2026, compared with an industry average of 5.6 per cent.

Net interest margin improved to 5.7 per cent, helped by stabilising funding costs and continued repricing of the book. Around 85 per cent of finance borrowings are hedged, reducing earnings volatility. The $200 million public securitisation warehouse term-out in October 2025 lowered funding costs and reduced capital commitment, with further capital efficiency benefits expected as the rating process completes.

Insurance continued steady growth

Insurance revenue increased 5 per cent to $50.2 million, while segment NPBT rose 7 per cent to $17.3 million. Growth was supported by dealer and finance broker partnerships, which remain the main driver of premium growth.

Turners also noted progress in direct-to-consumer comprehensive motor insurance, which provides an additional revenue stream. Claims cost inflation was well managed, despite global supply chain pressures. Mechanical breakdown insurance loss ratios edged up slightly to 58 per cent from 57 per cent, but remained consistent with long-term historical trends.

Digital distribution was strengthened during the year, including a new MBI product for the private-to-private car market. New partners were also added, increasing Autosure’s digital footprint.

Servicing and repairs supports integration

Turners Servicing & Repairs completed its rebrand from MyAutoShop, allowing the business to leverage the broader Turners brand. The VTNZ partnership was extended to pre-purchase inspections, and the technician and van network continues to expand. Cross-selling, upselling and reminders across the wider Turners customer base are starting to contribute.

While this division is still smaller than Auto Retail, Finance and Insurance, it strengthens the group’s integrated automotive model by giving Turners more customer touchpoints across the vehicle ownership cycle.

Capital position supports long-term targets

Turners said its capital base now supports its FY31 strategic plan. Total assets increased to $1.071 billion, supported by a $119 million increase in finance receivables and a $35 million increase in property, plant and equipment. Shareholders’ equity increased to $318 million from $299 million.

The group also highlighted its refreshed funding arrangements, including the $200 million securitisation warehouse and new syndicated banking facilities signed in March 2026. These provide capacity to support branch expansion while maintaining disciplined capital allocation.

Dividends continued to grow

The board declared a final dividend of 9.0 cents per share, fully imputed, taking total FY26 dividends to 33.0 cents per share. That was up 14 per cent on FY25 and continued Turners’ 12-year track record of dividend growth.

Outlook

Turners expects to continue making progress towards achieving its previous FY28 target of $65 million NPBT one year early in FY27, despite softer trading following the Iran–US conflict and more subdued April demand. Management has deployed its prior macro downturn playbook, including disciplined inventory positioning, selective buying and maintaining credit quality.

The main positives are strong finance growth, resilient insurance earnings, improved Auto Retail margins, branch rollout benefits and a growing dividend profile. The main risks are weaker consumer demand, used vehicle market softness, credit quality deterioration and the timing of future branch expansion. Overall, Turners appears well positioned, with a diversified platform and clear pathway towards its $100 million FY31 NPBT target.