Repo'd vehicle sales soar: Turners

Friday 22nd August 2008

Sales of vehicles repossessed by finance companies have soared 106% this year, a bright spot in a gloomy market for second-hand cars, according to Turners Auctions.

The company today posted a 55% gain in first-half profit to NZ$812,000, mainly reflecting a NZ$1.2 million one-time provision for fraud by an employee in the year earlier period. Excluding the item, profit fell 38% in the latest period. Sales rose 1% to NZ$41.8 million.

"Most of the 106% would be run-of-the-mill vehicles," chief executive Graham Roberts said in an interview. "These are tough times, with people not being able to keep up their payments."

Sales of repossessed vehicles hit the news this month after Turners rolled out auctions of prestige cars like Ferraris and Aston Martins, the aftermath of the slump in the property development industry that forced high-fliers to sell assets. Home building consents tumbled 20% in June, according to government figures and the Treasury has said the economy fell into recession in the first half.

Roberts said Turners is "being very cautious" about the earnings outlook.

"The current environment is the most challenging experienced in the industry for many years," he said.

"Rapidly declining consumer confidence, pressure on household incomes, fuel price increases and emission regulations" hurt the second-hand car market.

Shares of Turners have gained 10% in the past month and last traded at 85 cents.

By Jonathan Underhill

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