Turners cautiously upbeat on annual earnings guidance, still hunting acquisitions

Wednesday 16th September 2015

Turners, the financial services firm formerly known as Dorchester Pacific, will probably beat annual earnings guidance, though headwinds facing the economy mean it's too early to upgrade the forecast.

Chief executive Paul Byrnes told shareholders in Auckland the company is expected to lift first-half earnings 70 percent to $9.5 million and will probably exceed the May forecast for pretax profit of $20 million in the 12 months ending March 31, 2016, though it was still too early to formally upgrade guidance.

"With seven months trading to come, and with the potential for some aspects of the local economy to slow down, it is too early to re-forecast this current guidance," Byrne said in speech notes published on the NZX. "Shareholders can be assured that we will continue to achieve organic profit growth and additional growth through merger and acquisition activity through this year and over the financial years following."

Turners this week said it wants to buy about a fifth of Motor Trade Finances, offering a premium of $1.15 a share, to better reflect the business relationship between the two firms, where about 10 percent of Turners' new loans originate through MTF. Turners owns almost 1 percent of MTF, and Byrnes today said the offer price would provide the firm a dividend yield of about 9 percent after tax.

The firm has been on an acquisition spree since recapitalising five years ago, and Byrnes said he's still pursuing potential purchases which match the group's strategy, provide sustainable earnings, offer value, and can be integrated into the company.

"I am now spending up to 50 percent of my time on merger and acquisition activity and the board are actively involved in the process," he said.

Turners shares were unchanged at 29 cents, and have declined 9.4 percent this year.

BusinessDesk.co.nz

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