Turners Automotive Eyes $100M Profit Target After 12th Straight Year of Dividend Growth
Record FY26 result caps 12 years of dividend growth for Turners Automotive
In its FY26 results presentation covering the full year ending 31 March 2026, Turners Automotive Group (ASX: TRA) detailed a record normalised result, with normalised NPBT of $63.2M (up +16%) and normalised NPAT of $45.6M (up +18%), on revenue of $451.2M (up +9%). The presentation noted a fully imputed FY26 dividend of 33.0 cents per share, up +14% on FY25 and marking the 12th consecutive year of dividend growth at a 10.5% CAGR.
Management highlighted that Q4 FY26 was the strongest quarter on record, though momentum softened from late March following the Iran/US conflict. Growth was driven across four divisions: Auto Retail, Finance, Insurance, and the emerging Servicing and Repairs business. The presentation also detailed a new five-year target of $100M NPBT by FY31.
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FY26 by the numbers — a diversified engine firing on three cylinders
Group headline metrics
The results snapshot below covers the key group-level metrics for FY26 as presented.
| Metric | FY26 Value | YoY Change | Note |
|---|---|---|---|
| Revenue | $451.2M | +9% | Growth across Auto Retail, Finance, and Insurance |
| Normalised EBIT | $70.6M | +14% | Adjusted for Finance interest expense and impairment |
| Normalised NPBT | $63.2M | +16% | Excludes EC Credit Control intangible impairment |
| Normalised NPAT | $45.6M | +18% | Excludes $7.47M EC Credit Control impairment |
| Reported NPAT | $38.2M | -1% | Includes impairment charge |
| Earnings Per Share | 50.4 cps | +16% | Normalised basis |
| Shareholders’ Equity | $318M | — | As at 31 March 2026 |
| FY26 Total Dividend | 33.0 cps | +14% | Fully imputed; final dividend 9.0 cps |
The gap between reported and normalised NPAT reflects the $7.47M impairment of the EC Credit Control intangible asset. Management excluded this charge from normalised figures, noting it reflects revised medium-term earnings expectations for that division rather than a group-wide deterioration.
Divisional performance at a glance
The four operating segments each contributed to the FY26 result, with Finance the standout performer and Credit Management the only segment to record a decline.
- Auto Retail: Revenue $315.3M (up +10%), segment profit $32.6M (up +12%). Second-half revenue accelerated to +15% year-on-year, versus +4% in the first half, reflecting improving consumer confidence through the year.
- Finance: Revenue $77.0M (up +13%), segment profit $19.2M (up +19%). The standout segment, driven by loan book expansion and disciplined credit quality.
- Insurance: Revenue $50.2M (up +5%), segment profit $17.3M (up +7%). Consistent annuity-style contributor with growing direct-to-consumer traction.
- Credit Management: Revenue $8.5M (down -17%), normalised segment profit $1.8M (down -49%). The decline was attributed to temporary holds placed by large banking clients undertaking system implementations, not structural deterioration in the division’s underlying performance.
What’s driving the growth — and why it’s built to last
Finance division: loan book momentum with best-in-class credit quality
The presentation positioned the Finance division as the highest-growth, highest-quality segment in the group. The total loan book grew from $447M to $566M, a +27% increase, while the net interest margin (NIM) reached 5.7%, the highest level in three years.
Credit quality metrics reinforced the division’s position. Total consumer arrears fell to 2.5% (down from 3.0% at March 2025), running at approximately half the industry level according to management. Customers in hardship declined to 96 from 111 at March 2025, a meaningful improvement from the COVID-era peak of 511.
A new NZ$200M securitisation warehouse, established in October 2025, improved pricing, reduced capital commitment, and brought the hedged proportion of Finance borrowings to 85% (up from 79% at March 2025). The receivables funding facility carries $70M in available headroom, with management stating the structure supports up to 50% further loan book growth.
From the FY26 results presentation
“Maintaining credit quality continues to be a non-negotiable for us.”
Auto Retail: branch expansion fuelling long-term market share gains
Auto Retail delivered owned unit sales growth of +9% for FY26, with margin per owned unit up +3%. The Christchurch multi-branch expansion offered a clear proof point for the branch network strategy: operating three locations through part of the year generated 15% more sourcing leads compared to a single full-year branch, driving a 22% increase in local units sold across the region.
The committed development pipeline for FY28 comprises four new branches and two replacement sites:
- Tauranga – Greerton (Cars, 7,600m², Q1 FY28): expected additional profit contribution of $600k
- Whanganui (Cars, 3,400m², Q1 FY28): expected additional profit contribution of $500k
- Hastings (Cars, 4,300m², Q1 FY28): expected additional profit contribution of $600k
- Drury (Commercial replacement, 18,000m², Q2 FY28): expected additional profit contribution of $200k
- Hamilton Te Rapa (Cars replacement, 8,000m², Q3 FY28): expected additional profit contribution of $400k
The presentation noted FY27 is a year of network groundwork rather than expansion, with no new retail branches scheduled to open. Management framed this as investment timing, with the pipeline building strongly for FY28. Turners owns 23 of its sites at a carrying value of $164M, underscoring the asset backing behind the network.
Insurance: annuity-style earnings with digital growth optionality
Insurance delivered another consistent year, with Gross Written Premium (GWP) growing from $41.8M to $44.5M and segment profit reaching $17.3M (up +7%). The MBI loss ratio of 58% (FY25: 57%) remained consistent with long-term historical trends.
Digital distribution continued to build momentum. New partners added during the year include VTNZ, Gaspy, and Quashed, and a new Mechanical Breakdown Insurance (MBI) product was launched for the private-to-private car market, with management describing early sales activity as encouraging. The presentation also noted that Insurance is a direct beneficiary of higher fuel prices, given that fewer kilometres driven translates directly to lower claims frequency.
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New $100M NPBT target set as Turners eyes FY27 ahead of schedule
The presentation detailed a consistent track record of target delivery: Target 1 ($45M NPBT by FY24) was exceeded, Target 2 ($50M NPBT by FY25) was exceeded, and Target 3 ($65M NPBT by FY28) is now expected to be achieved in FY27, one year ahead of schedule. Against that backdrop, management announced a new Target 4: $100M NPBT by FY31.
The Iran/US conflict was acknowledged as a near-term headwind. Q4 FY26 was a record quarter for the business, but trading progressively softened from late March and into April. Management outlined its response, describing a re-deployment of the “tough macro” playbook applied in FY24 and FY25: a strong cost focus, more selective buying, and repositioning inventory toward smaller, cheaper, and hybrid vehicles.
From the FY26 results presentation
“The result extends our track record of resilience, by again delivering another record, despite an extremely challenging consumer environment.”
The annuity-style earnings from Finance and Insurance were highlighted as providing resilience should Auto Retail face continued short-term headwinds. On the capital return side, the final FY26 dividend of 9.0 cents per share (fully imputed) takes total FY26 dividends to 33.0 cps, with the Dividend Reinvestment Plan (DRP) applying to the final payment. The 10.5% CAGR over 12 consecutive years of dividend growth underpins what management presented as one of the more durable income track records among ASX-listed consumer companies.
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