Tuesday 22nd November 2016
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Turners, the financial services firm formerly known as Dorchester Pacific, expects a "significant" earnings uplift after buying motor insurer Autosure from Suncorp New Zealand.
Turners has bought the Autosure brand, mechanical breakdown and payment protection insurance portfolios, for $34 million, with settlement due to occur on Dec.1, the Auckland-based company said in a statement.
Autosure distributes through about 750 dealer agencies in New Zealand, and Turners expects it to contribute earnings before interest, tax, depreciation and amortisation of about $5.5 million in the first full year following transfer of the in-force portfolios, which is subject to regulatory approval from the Reserve Bank.
Turners chair Grant Baker said the firm anticipates group earnings "will lift significantly" for the financial year to March 31, 2018, and said the company is in a strong financial position to keep investing. In the year to March 2016, Turners lifted pretax earnings 13 percent to $21.6 million, exceeding guidance, as revenue jumped 76 percent to $172 million.
Its shares rose 5.2 percent to a 20-month high of $3.45.
About 70 percent of the Autosure acquisition will be funded from Turners' recent bond conversion and share placement capital raising, Baker said.
“Autosure will be run as a stand-alone business and all current management and staff will be retained," Turners chief executive Todd Hunter said. “Additional synergies are expected to arise for the Turners group from utilisation of Autosure’s repairer network by our existing insurance business and from cross selling of insurance and finance to an extended dealer network and customer base."
The company also now has a partnership with Suncorp, under which it will sell private motor vehicle insurance through its brands including Autosure and Mainstream, underwritten by Suncorp's intermediated general insurance provider Vero.
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