Turners Automotive Group – 30 September 2017

Earnings Results18 December 2017TRAConsumer Discretionary

TURNERS
AUTOMOTIVE GROUP
INTERIM REPORT
FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2017

UPCOMING DATES
Record Date for Q2 Dividend 15 December 2017
Dividend Payment Date 22 December 2017
End of 2017 Financial Year 31 March 2018

CONTENTS
HY18 Half Year at a Glance 4
Half Year Review 6
Financial Statements 13
TURNERS AUTOMOTIVE GROUP
IS AN INTEGRATED AUTOMOTIVE
FINANCIAL SERVICES GROUP,
OFFERING STRENGTH IN THREE
KEY AREAS: AUTOMOTIVE RETAIL,
FINANCE & INSURANCE AND DEBT
MANAGEMENT.
Automotive Retail
Turners is the largest second hand vehicle retailer in New Zealand, operating
through a growing group of retailers including Turners Group and Buy Right
Cars. This retail presence allows us direct access to buyers and sellers and the
opportunity to cross sell our finance and insurance offer.
Finance & Insurance
We work with a network of dealers and brokers to offer simple
and attractive finance and insurance products to customers across New
Zealand. Our products are primarily focused on the automotive industry
including motor vehicle financing, mechanical breakdown and loan
repayment insurance.
Debt Management
EC Credit operates across New Zealand and Australia, helping businesses
of any size with better management of their credit challenges.

Turners Automotive Group Limited Half Year Report 2017
32

HALF YEAR FINANCIAL SNAPSHOT
Six months to 30 September 2017
Turners Automotive Group Limited delivered a strong half year result with all divisions
delivering improvements in revenue and operating profit. The company is benefitting
from growing retail sales, an increasing loan book and a scaled up insurance business.
Both Buy Right Cars and the Autosure insurance business contributed a full six months
of earnings, following their acquisition in FY17.
The Board declared a fully imputed dividend of 3.0 cents per share for Q2, taking total
dividends for the FY18 half year to 6.0 cents per share (cps).
$MILLIONSHY18HY17% CHANGE
Operating Revenue163.8113.944%
Net Profit Before Tax14.211.821%
Net Profit After Tax10.08.518%
Finance Receivables269.2176.153%
Shareholder Funds200.7151.333%
Half Year Dividends (cps)6.06.0
EARNINGS PER SHARESHAREHOLDERS’ EQUITY
0
0
0
50
100
150
200
250
300
FY15 FY16 FY17 FY18
FY15 FY16 FY17 FY18
HY15 HY16 HY17 HY18
HY15 HY16 HY17 HY18
$ MILLIONS
$ MILLIONS
$ MILLIONS
CENTS PER SHARE
5
10
15
20
25
30
5
10
15
0
50
100
150
200
250
0
0
0
50
100
150
200
250
300
FY15 FY16 FY17 FY18
FY15 FY16 FY17 FY18
HY15 HY16 HY17 HY18
HY15 HY16 HY17 HY18
$ MILLIONS
$ MILLIONS
$ MILLIONS
CENTS PER SHARE
5
10
15
20
25
30
5
10
15
0
50
100
150
200
250
0
0
0
50
100
150
200
250
300
FY15 FY16 FY17 FY18
FY15 FY16 FY17 FY18
HY15 HY16 HY17 HY18
HY15 HY16 HY17 HY18
$ MILLIONS
$ MILLIONS
$ MILLIONS
CENTS PER SHARE
5
10
15
20
25
30
5
10
15
0
50
100
150
200
250
0
0
0
50
100
150
200
250
300
FY15 FY16 FY17 FY18
FY15 FY16 FY17 FY18
HY15 HY16 HY17 HY18
HY15 HY16 HY17 HY18
$ MILLIONS
$ MILLIONS
$ MILLIONS
CENTS PER SHARE
5
10
15
20
25
30
5
10
15
0
50
100
150
200
250
NET PROFIT AFTER TAX
REVENUE
KEY EVENTS
Expanding our Business
Autosure and Buy Right Cars both successfully integrated into the
group and contributed full six months of earnings
Strong Divisional Performance
All divisions delivered improvements in revenue and operating profit
Strengthening our Company
ASX dual listing completed
Completion of capital raising: $25m placement (plus $5m SPP
completed post-period end) to support growth initiatives
Key Appointments
Appointed Greg Hedgepeth as CEO of the Automotive Retail division
HY18 AT A GLANCE
■ 2H
■ 1H
■ 2H
■ 1H
Turners Automotive Group Limited Half Year Report 2017
54

SECTOR REVIEW
Turners is continuing to grow its vertically integrated business model, which operates
across three key divisions – Automotive Retail, Finance & Insurance and Debt
Management.
All divisions delivered improvements in revenue and operating profit for the first
half year.
Automotive Retail
Revenue $113.5m +32%, Op Profit $8.8m +27%
Our focus on retail customers continues to deliver value, and sales to end users through
Turners Cars were at 72% of all car purchases in the first half (HY17: 64%).
These sales deliver higher margins and provide more opportunities to sell finance and
insurance products. This was reflected in a 23% increase in finance contracts written by
Turners and a 22% increase in sales of mechanical breakdown insurance policies.
We are continuing to invest in purpose built sites in targeted locations for the
automotive group.
The new Trucks & Machinery sites in Wiri and Palmerston North are now operational,
with an additional site being developed in Hamilton. A new site for Cars is being
developed in Porirua and is expected to be operational in April 2018; and a property
has been acquired for the relocation of the Whangarei branch to larger premises in
2019. A new Buy Right Cars site is also under development in Penrose, adjacent to the
main Turners site, and will be operational in the next few weeks.
HY16HY16
00
5
5
10
10
15
15
20
20
25
$ MILLION$ MILLION
HY17HY17HY18HY18
■ Debt Management ■ Finance and Insurance ■ Automotive Retail
SECTOR OPERATING PROFITREVENUE
HALF YEAR REVIEW
The first half of the 2018 financial year was primarily about getting Turners into shape
after several large acquisitions during last year and the rapid growth in the finance
book.
Pleasingly, Autosure and Buy Right Cars have both successfully integrated into the
group and contributed a full half year of earnings after being acquired in FY17.
In addition to acquisitions, organic growth is coming from:
• Strong used car sales and loan origination across the market
• Finance receivables growth across the Turners, MTF and core loan books; and
• Gross written premium growth from both captive and partner networks.
Revenue was $163.8m for the six months (HY17: $113.9m). Net Profit Before Tax,
which is the measure used by Turners as the basis for market guidance, was $14.2m,
an increase of 21%, while Net Profit After Tax was $10.0m, up 18.%. Excluding the
acquisitions of Buy Right Cars and Autosure, organic growth was 14% which was very
pleasing.
Shareholder equity increased to $200.7m as at 30 September 2017, boosted by the
$25m capital placement completed in September 2017.
The Board declared a second quarter, fully imputed dividend of 3cps, taking total half
year dividends to 6cps.
OPERATING ENVIRONMENT
There was some softening in the used vehicle market during the election period but
overall market trends are positive and growth prospects remain strong.
Year on year sales are up across the industry for all vehicle groups – Cars, Trucks &
Machinery, and damaged and end of life vehicles.
This is reflected in the growing number of registered motor vehicle dealers,
demonstrating the confidence in the industry for further growth moving forward.
This growth in competition, combined with an increase in the supply of new and used
vehicles, is putting some pressure on trading margins and the usual seasonal dip in
margins was longer and stronger than expected. However, improvements in trading
margins have been reported for both October and November, post-period end.
Turners Automotive Group Limited Half Year Report 2017
76

When looking at new sites, for both our Cars and Trucks & Machinery businesses, we
consider a number of factors to determine whether we acquire or lease a site, with the
aim of securing strategic locations to support further growth.
We are also continuing to progress with the opportunity to provide service, repairs
and maintenance by leveraging Autosure’s relationship with over 1,500 repairers, and
providing these services to vehicle owners in a more cost effective and convenient way.
According to Statistics NZ, households spend an average of $780 annually on vehicle
parts & accessories, vehicle lubricants, vehicle servicing and repairs.
This fits well within Turners’ integrated model and adds the opportunity for customers
to be recommended to Turner’s own repairer and service network.
We were pleased to welcome Greg Hedgepeth as the new CEO of the Automotive Retail
division with operational responsibility for the Turners Group NZ (Turners Auctions)
business and Buy Right Cars.
FINANCE AND INSURANCE
Combined, Turners finance and insurance divisions provided 24.5% of group revenue
and 40% of group operating profit.
Turners is currently consolidating its finance and insurance businesses into two primary
entities, which will deliver scale and operational efficiencies for the group.
Finance
Revenue 17.8m +39%, Op Profit $5.5m +12%
Turners’ finance book continues to expand and finance receivables were up 30% since
March 2017 to $269m.
80%
70%
60%
50%
40%
30%
20%
September 2013March 2014September 2014March 2015September 2015March 2016September 2016March 2017September 2017
■ Sales to End Users ■ Sales to Wholesale
SALES BY CUSTOMER TYPE
1HY162H17
0
50
100
150
200
250
300
$ MILLION
2H161H181H17
■ Core ■ Turners ■ MTF non-recourse
FINANCE RECEIVABLES
Funding of new receivables is now primarily through securitisation and approximately
75% of the funds from the recent equity raise will also be used to support the growth of
the finance book. We are focused on maximising growth opportunities and improving
the quality of lending and collections efforts. The MTF referral channel is working well
and, as part of ongoing credit quality management, we have made some adjustments
to the credit criteria associated with this channel.
Fintech is becoming an important competitive advantage and we are continuing to
enhance our Autoapp online loan approval platform to deliver a faster, better and
easier response on loan applications. Integration of insurance into this platform is a key
initiative.
The consolidation of our different finance brands into one operating entity “Oxford
Finance” is progressing well and we expect this to be complete by the start of FY19. As
part of this we are focused on building on our existing referral network of dealers and
brokers and encouraging them to write more loans with Oxford Finance.
Turners Automotive Group Limited Half Year Report 2017
98

Insurance
Revenue $22.4m +345%, Op Profit $2.6m (HY17: $0.1m)
The Autosure business has provided the scale required for Turners to operate
competitively and efficiently in the automotive insurance sector.
Autosure’s in-force policies were transferred to Turners at 31 March 2017 and the
Autosure products now represent approximately 70% of Turners’ insurance business.
Pleasingly, Gross Written Premiums are well ahead of expectations YTD. In conjunction
with close monitoring of risk profiles and claims management, we have a conservative
approach to claims reserves which continue to build over and above actual losses.
Innovation is key to our success in this sector and we have a number of new initiatives
including a dealer loyalty share scheme to reward finance and insurance referrals, new
electric vehicle breakdown cover and the development of a refreshed loan repayment
product for retail customers. In addition, we are spending significant effort in data
analysis to better understand claims and pricing by portfolio and vehicle category.
We are also integrating our insurance businesses into a single operating entity. This is
progressing well and is expected to be completed in FY19.
Debt Management
Revenue $10.2m +4%, Op Profit $3.4m (HY17: $3.4m)
EC Credit Control continues to perform well and remains highly cash generative.
Debt load from key corporate accounts continues to increase, reflecting the positive
collections result we achieve for these customers. To drive further efficiencies, we are
building the analytics capability in the contact centre and new Auto Dialler software
has been introduced with encouraging results. This technology is improving our
efficiency and the number of customer connects we can actually make and we expect a
positive impact from the software on second half collections results.
EC Credit has also established a partnership with IODM, an Australian based online
automated accounts receivable solution provider, to resell IODM products and become
their debt collection partner in Australia and NZ.
On the investor front, we completed the dual listing on the ASX, in response to the
growing interest from Australian investors, and completed a $25m placement with
a further $5m raised post period end through a Share Purchase Plan. The board has
reflected on the oversubscribed Share Purchase Plan and acknowledges shareholder
feedback received on the merits of a significantly higher rights issue component.
A STRONG PLATFORM FOR GROWTH
Turners has the funding and capability to continue building scale and increasing share
in each of the sectors in which we operate.
The business is in a strong financial position after the recent $30m capital raise.
Funding remains an important area of focus for Turners. As our loan book grows, it
becomes ever more important to ensure we are accessing the most cost effective
funding possible.
The securitisation programme is now in effect with $114m utilised out of a $150m
approved facility. This is our largest source of funds and we are currently working to
extend this limit with the BNZ.
We are also looking at diversifying our bank funding to reduce our reliance on just one
bank and to increase our access to funds.
OUTLOOK
For the second half of FY18, we will be focused on product and service innovation;
expanding our retail presence in both Cars and Trucks & Machinery; and developing a
bundled approach to finance and insurance; and building on existing capability to offer
servicing and maintenance.
An uplift is expected in the second half in line with annual trends and we remain firmly
on track to deliver a Net Profit Before Tax of between $29m and $31m for the full year.
This represents an 18% to 26% increase on FY17, or 10 to 14% excluding acquisitions.
The automotive sector continues to remain buoyant and Turners is well positioned to
keep delivering profit growth for shareholders into the future.
Todd Hunter Grant Baker
CEO Chairman
Turners Automotive Group Limited Half Year Report 2017
1110

INTERIM FINANCIAL REPORTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017
Turners Automotive Group Limited Half Year Report 2017
1312

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 September 2017
Six monthsSix monthsYear
endedendedended
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
Note$'000$'000$'000
Revenue from continuing operations 3162,979113,292249,338
Other income8636571,671
Cost of goods sold(71,430)(50,553)(116,997)
Interest expense(6,532)(5,642)(11,350)
Impairment provision expense(2,276)(739)(2,026)
Subcontracted services expense(5,375)(4,110)(8,520)
Employee benefits (short term)(25,589)(19,220)(40,862)
Commission(5,439)(3,469)(7,446)
Advertising expense(1,905)(1,476)(3,431)
Depreciation and amortisation expense(2,689)(1,247)(2,863)
Property and related expenses(5,118)(4,392)(9,391)
Systems maintenance(870)(709)(1,468)
Claims(15,920)(3,195)(6,491)
Movement in life insurance liabilities(25)(833)(1,056)
Credit legal fee service expense(548)(374)(838)
Other expenses(5,882)(6,228)(13,639)
Profit before taxation
14,24411,76224,631
Taxation expense(4,213)(3,235)(7,057)
Profit from continuing operations
10,0318,52717,574
Other comprehensive income for the period (which may subsequently be
reclassified to profit/loss), net of tax
Cash flow hedges(43)3541
Foreign currency translation differences-(1)(6)
Total comprehensive income for the period
9,9888,56117,609
Earnings per share (cents per share)
Basic earnings per share 13.3613.4025.49
Diluted earnings per share 13.2412.9525.03
The accompanying notes form part of these financial statements
TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2017
Share
Capital
Share
Options
Translation
Reserve
Cash flow
reserve
Retained
EarningsTotal
$’000$’000$’000$’000$’000$’000
Balance at 31 March 2016 (audited) 136,127 - (17) (35) (6,263) 129,812
Transactions with shareholders in their capacity as owners
Capital contributions (net of issue costs)19,309----19,309
Dividend paid----(6,361)(6,361)
19,309 - - - (6,361) 12,948
Comprehensive income
Profit----8,5278,527
Other comprehensive income--(1)35-34
Total comprehensive income for the period, net of tax - - (1) 35 8,527 8,561
Balance at 30 September 2016 (unaudited)
155,436 - (18) - (4,097) 151,321
Transactions with shareholders in their capacity as owners
Capital contributions (net of issue costs)13,373----13,373
Share based payments-208---208
Dividend paid----(2,234)(2,234)
13,373 208 - - (2,234) 11,347
Comprehensive income
Profit----9,0479,047
Other comprehensive income--(5)6-1
Total comprehensive income for the period, net of tax - - (5) 6 9,047 9,048
Balance at 31 March 2017 (audited)
168,809 208 (23) 6 2,716 171,716
Transactions with shareholders in their capacity as owners
Capital contributions (net of issue costs)25,149----25,149
Share based payments-217---217
Dividend paid----(6,334)(6,334)
25,149 217 - - (6,334) 19,032
Comprehensive income
Profit----10,03110,031
Other comprehensive income---(43)-(43)
Total comprehensive income for the period, net of tax
- - - (43) 10,031 9,988
Balance at 30 September 2017 (unaudited)
193,958 425 (23) (37) 6,413 200,736
The accompanying notes form part of these financial statements
CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
For the six months ended 30 September 2017
The accompanying notes form part of these financial statementsThe accompanying notes form part of these financial statements
CONDENSED CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
For the six months ended 30 September 2017
Turners Automotive Group Limited Half Year Report 2017
1514

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
OF FINANCIAL POSITION
As at 30 September 2017
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
Note$'000$'000$'000
Assets
Cash and cash equivalents4
69,472
14,903 69,069
Financial assets at fair value through profit or loss
- Insurance
7,345
16,058 7,190
- Other
3,620
3,206 3,130
Trade receivables
17,538
10,114 12,663
Inventory
42,143
44,028 44,642
Finance receivables5
269,229
176,052 207,143
Derivative financial instruments
-
- 88
Other receivables and deferred expenses
7,945
8,328 8,489
Reverse annuity mortgages5
8,967
9,769 9,222
Investment property
4,000
3,500 4,000
Property, plant and equipment
23,736
13,856 18,909
Intangible assets
171,527
133,269 172,088
Total assets
625,522
433,083 556,633
Liabilities
Other payables
35,164
33,025 28,091
Financial liability at fair value through profit or loss
2,767
5,754 7,611
Deferred revenue
5,766
5,738 5,624
Deferred tax
20,044
10,698 20,173
Tax payable
1,681
276 1,808
Derivative financial instruments
43
- -
Borrowings
306,786
198,849 265,889
Life investment contract liabilities
8,079
15,862 12,847
Insurance contract liabilities
44,456
11,560 42,874
Total liabilities
424,786
281,762 384,917
Shareholders' equity
Share capital
193,958
155,436 168,809
Other reserves
365
(18) 191
Retained earnings
6,413
(4,097) 2,716
Total shareholders' equity
200,736
151,321 171,716
Total shareholders' equity and liabilities
625,522
433,083 556,633
G.K. BakerP.A.Byrnes
ChairmanExecutive Director
Authorised for issue on 28 November 2017
The accompanying notes form part of these financial statements
TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 September 2017
Six monthsSix monthsYear
endedendedended
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Cash flows from operating activities
Interest received 18,873 15,254 27,909
Receipts from customers 138,972 96,386 216,948
Interest paid(5,896) (5,610) (8,237)
Payment to suppliers and employees(132,000) (92,752) (216,489)
Income tax paid(4,465) (3,268) (5,044)
Net cash inflow/(outflow) from operating activities before
changes in operating assets and liabilities 15,484 10,010 15,087
Net increase in finance receivables(54,372) (9,569) (36,403)
Net decrease in reverse annuity mortgages 672 413 1,246
Net decrease of financial assets at fair value through profit or loss 305 386 9,156
Net contribution from life investment contracts(4,877) (90) (2,645)
Changes in operating assets and liabilities arising from
cash flow movements(58,272) (8,860) (28,646)
Net cash (outflow)/inflow from operating activities(42,788) 1,150 (13,559)
Cash flows from investing activities
Proceeds from sale of property, plant, equipment and intangibles 152 163 340
Purchase of fixed assets and intangible assets(6,116) (2,763) (8,401)
Purchase of subsidiaries(3,733) (29,344) (63,346)
Net cash (outflow)/inflow from investing activities(9,697) (31,944) (71,407)
Cash flows from financing activities
Net bank loan advances/(repayments) 34,756 18,450 82,288
Proceeds of share issue 24,466 - 13,374
Proceeds from the issue of bonds - 19,784 19,784
Dividend paid(6,334) (6,361) (8,595)
Net cash inflow/(outflow) from financing activities 52,888 31,873 106,851
Net movement in cash and cash equivalents 403 1,079 21,885
Add opening cash and cash equivalents 69,069 13,810 13,810
Cash included with purchase of subsidiaries - - 33,378
Translation difference - 14 (4)
Closing cash and cash equivalents69,472 14,903 69,069
The accompanying notes form part of these financial statements
CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
For the six months ended 30 September 2017
CHAIRMAN’S & EXECUTIVE DIRECTOR'S REPORT
(Continued)
G.K. BakerP.A. Byrnes
Chairman DirectorExecutive Director
5
The accompanying notes form part of these financial statementsThe accompanying notes form part of these financial statements
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS
For the six months ended 30 September 2017
TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
OF FINANCIAL POSITION
As at 30 September 2017
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
Note$'000$'000$'000
Assets
Cash and cash equivalents4
69,472
14,903 69,069
Financial assets at fair value through profit or loss
- Insurance
7,345
16,058 7,190
- Other
3,620
3,206 3,130
Trade receivables
17,538
10,114 12,663
Inventory
42,143
44,028 44,642
Finance receivables5
269,229
176,052 207,143
Derivative financial instruments
-
- 88
Other receivables and deferred expenses
7,945
8,328 8,489
Reverse annuity mortgages5
8,967
9,769 9,222
Investment property
4,000
3,500 4,000
Property, plant and equipment
23,736
13,856 18,909
Intangible assets
171,527
133,269 172,088
Total assets
625,522
433,083 556,633
Liabilities
Other payables
35,164
33,025 28,091
Financial liability at fair value through profit or loss
2,767
5,754 7,611
Deferred revenue
5,766
5,738 5,624
Deferred tax
20,044
10,698 20,173
Tax payable
1,681
276 1,808
Derivative financial instruments
43
- -
Borrowings
306,786
198,849 265,889
Life investment contract liabilities
8,079
15,862 12,847
Life insurance contract liabilities
44,456
11,560 42,874
Total liabilities
424,786
281,762 384,917
Shareholders' equity
Shard capital
193,958
155,436 168,809
Other reserves
365
(18) 191
Retained earnings
6,413
(4,097) 2,716
Total shareholders' equity
200,736
151,321 171,716
Total shareholders' equity and liabilities
625,522
433,083 556,633
G.K. BakerP.A.Byrnes
ChairmanExecutive Director
Authorised for issue on 28 November 2017
The accompanying notes form part of these financial statements
Turners Automotive Group Limited Half Year Report 2017
1716

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 September 2017
Six monthsSix monthsYear
endedendedended
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
RECONCILIATION OF NET SURPLUS WITH CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) 10,031 8,527 17,574
Adjustment for Non-cash items
Movement in impairment provisions 2,281 739 2,026
Net (profit)/loss on sale of fixed assets(227) (24) (84)
Depreciation and amortisation 2,689 1,247 2,863
Capitalised reverse annuity mortgage interest(432) (456) (885)
Deferred revenues 282 2,508 4,678
Change in value of financial assets at fair value through profit or loss(929) (114) (1,012)
Net annuity and premium change to policyholders accounts 109 (1,183) (137)
Non-cash long term employee benefits 238 323 179
Non-cash adjustments to finance receivables effective interest rates 51 (14) 83
Deferred expenses(5,909) 45 (3,901)
Adjustment for Movements in Working Capital
Net increase receivables and pre-payments(1,823) (3,860) (6,518)
Net decrease/(increase) in inventories 2,578 (2,870) (3,585)
Net decrease/(increase) in current tax receivable(266) - 2,159
Net increase/(decrease) in payables 6,797 5,178 1,575
Net increase in finance receivables(54,372) (9,569) (36,403)
Net decrease in reverse annuity mortgages 672 413 1,246
Net decrease of insurance assets at fair value through profit or loss 305 386 9,156
Net contributions from life investment contracts(4,877) (90) (2,645)
Net decrease/(increase) in deferred tax 1,214 (33) 76
Net increase in tax payable(1,200) (3) (4)
Net Cash inflow/(outflow) from Operating Activities(42,788) 1,150 (13,559)
The accompanying notes form part of these financial statements
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
These unaudited consolidated condensed interim financial statements of Turners Automotive Group Limited formerly Turners
Limited (the Company) and its subsidiaries (the Group) have been prepared in accordance with NZ IAS 34: Interim Financial
Reporting Standard.
The Company is registered under the Companies Act 1993, listed on the NZX and ASX
and is a FMC reporting entity for the
purposes of the Financial Markets Conduct Act 2013.
The unaudited consolidated condensed interim financial statements of the Group for the six months ended 30 September
2017 have been prepared using the same accounting policies and methods of computation as, and should be read in
conjunction with the financial statements and related notes included in the Group's annual report for the year ended 31
March 2017.
The same significant judgments, estimates and assumptions (including basis of segmentation) included in the notes to the
financial statements in the Group's Annual Report for the year to 31 March 2017
have been applied to these interim financial
statements. The business does not experience notable seasonal variations. There has been no change to the basis of
segmentation from that applied at 31 March 2017.
To ensure consistency with audited figures, 30 September 2016 comparatives have been regrouped where appropriate
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS
For the six months ended 30 September 2017
The accompanying notes form part of these financial statements
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
Turners Automotive Group Limited Half Year Report 2017
1918

TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
2. SEGMENTAL INFORMATION
2.1 OPERATING SEGMENTS
RevenueRevenueRevenueRevenue
TotalInter-fromTotalInter-fromTotalInter-from
segmentsegmentexternalsegmentsegmentexternalsegmentsegmentexternal
revenuerevenuecustomersrevenuerevenuecustomersrevenuerevenuecustomers
30/09/201730/09/201730/09/201730/09/201630/09/201630/09/201631/03/201731/03/201731/03/2017
UnauditedUnauditedUnauditedUnauditedUnauditedUnauditedAuditedAuditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Automotive retail 115,694 (2,211) 113,483 86,182 - 86,182 193,472 (783) 192,689
Finance 17,791 - 17,791 12,801 - 12,801 26,818 - 26,818
Collection Services - New Zealand 6,978 (2,171) 4,807 6,932 (1,836) 5,096 13,127 (3,804) 9,323
Collection Services - Australia 5,382 - 5,382 4,721 - 4,721 9,783 - 9,783
Insurance 22,369 - 22,369 5,025 - 5,025 12,255 - 12,255
Corporate & Other 10 - 10 293 (169) 124 466 (325) 141
168,224 (4,382) 163,842 115,954 (2,005) 113,949 255,921 (4,912) 251,009
Operating profit30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Automotive retail 8,771 6,918 15,397
Finance 5,537 4,937 10,156
Collection Services - New Zealand 3,285 3,279 6,006
Collection Services - Australia 128 116 239
Insurance 2,627 130 928
Corporate & Other(6,104) (3,618)(8,095)
Profit/(loss) before taxation14,24411,76224,631
Income tax(4,213) (3,235)(7,057)
Profit attributable to shareholders 10,031 8,527 17,574
Interest revenueInterest expense
30/09/201730/09/201631/03/201730/09/201730/09/201631/03/201730/09/201730/09/201631/03/2017
UnauditedUnauditedAuditedUnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Automotive retail 4,289 3,735 7,590 2,302 1,812 3,753 1,242 1,010 2,286
Finance 15,710 11,079 22,907 2,643 1,915 3,648 152 122 329
Collection Services - New Zealand 5 4 13 - 1 - 39 42 92
Collection Services - Australia - - - - - - 1 - -
Insurance 993 415 875 - - - 105 43 91
Corporate & Other92474181,7482,0834,2741,1503065
21,00615,48031,8036,6935,81111,6752,6891,2472,863
Eliminations(161)(169)(325)(161) (169)(325) - --
20,84515,31131,4786,5325,64211,3502,6891,2472,863
Depreciation and
amortisation expenses
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
2. SEGMENTAL INFORMATION
2.1 OPERATING SEGMENTS
RevenueRevenueRevenueRevenue
TotalInter-fromTotalInter-fromTotalInter-from
segmentsegmentexternalsegmentsegmentexternalsegmentsegmentexternal
revenuerevenuecustomersrevenuerevenuecustomersrevenuerevenuecustomers
30/09/201730/09/201730/09/201730/09/201630/09/201630/09/201631/03/201731/03/201731/03/2017
UnauditedUnauditedUnauditedUnauditedUnauditedUnauditedAuditedAuditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Automotive retail 115,694 (2,211) 113,483 86,182 - 86,182 193,472 (783) 192,689
Finance 17,791 - 17,791 12,801 - 12,801 26,818 - 26,818
Collection Services - New Zealand 6,978 (2,171) 4,807 6,932 (1,836) 5,096 13,127 (3,804) 9,323
Collection Services - Australia 5,382 - 5,382 4,721 - 4,721 9,783 - 9,783
Insurance 22,369 - 22,369 5,025 - 5,025 12,255 - 12,255
Corporate & Other 10 - 10 293 (169) 124 466 (325) 141
168,224 (4,382) 163,842 115,954 (2,005) 113,949 255,921 (4,912) 251,009
Operating profit30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Automotive retail 8,771 6,918 15,397
Finance 5,537 4,937 10,156
Collection Services - New Zealand 3,285 3,279 6,006
Collection Services - Australia 128 116 239
Insurance 2,627 130 928
Corporate & Other(6,104) (3,618)(8,095)
Profit/(loss) before taxation14,24411,76224,631
Income tax(4,213) (3,235)(7,057)
Profit attributable to shareholders 10,031 8,527 17,574
Interest revenueInterest expense
30/09/201730/09/201631/03/201730/09/201730/09/201631/03/201730/09/201730/09/201631/03/2017
UnauditedUnauditedAuditedUnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Automotive retail 4,289 3,735 7,590 2,302 1,812 3,753 1,242 1,010 2,286
Finance 15,710 11,079 22,907 2,643 1,915 3,648 152 122 329
Collection Services - New Zealand 5 4 13 - 1 - 39 42 92
Collection Services - Australia - - - - - - 1 - -
Insurance 993 415 875 - - - 105 43 91
Corporate & Other92474181,7482,0834,2741,1503065
21,00615,48031,8036,6935,81111,6752,6891,2472,863
Eliminations(161)(169)(325)(161) (169)(325) - --
20,84515,31131,4786,5325,64211,3502,6891,2472,863
Depreciation and
amortisation expenses
Turners Automotive Group Limited Half Year Report 2017
2120

NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
2. SEGMENTAL INFORMATION
2.1 OPERATING SEGMENTS (continued)
Other material non-cash items
RevenueExpenses
30/09/201730/09/201631/03/201730/09/201730/09/201631/03/2017
UnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000
Automotive retail - impairment provisions - - - 207 121 297
Finance - impairment provisions - - - 2,016 601 1,710
Insurance - impairment provisions - - - 53 14 16
Automotive retail - revaluation of investment 590 523 729 - - -
Finance - investment property - - 500 - - -
Collection services - New Zealand - deferred revenue 241 597 1,061 - - -
Insurance - reverse annuity mortgage interest 432 396 825 - - -
Corporate & Other - reverse annuity mortgage interest - 60 60 - - -
1,2631,5763,1752,2767362,023
2.2 SEGMENT ASSETS AND LIABILITIES
30/09/201730/09/201631/03/201730/09/201730/09/201631/03/2017
UnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000
Automotive retail 140,406 119,932 134,160 108,698 95,565 103,821
Finance 228,077 143,886 174,134 178,439 99,215 126,528
Collection Services - New Zealand 26,625 28,163 25,974 7,824 13,908 9,246
Collection Services - Australia 1,852 1,570 1,908 758 683 890
Insurance 117,862 43,030 118,722 64,413 33,980 66,503
Corporate & Other285,026280,569266,40372,386101,43079,169
799,848617,150721,301432,518344,781386,157
Eliminations(174,326)(184,067)(164,668)(7,732)(63,019)(1,240)
625,522433,083556,633424,786281,762384,917
2.3 AUTOMOTIVE RETAIL SEGMENT ANALYSISRevenueRevenueRevenue
TotalInter-fromTotalInter-fromTotalInter-from
segmentsegmentexternalsegmentsegmentexternalsegmentsegmentexternal
revenuerevenuecustomersrevenuerevenuecustomersrevenuerevenuecustomers
30/09/201730/09/201730/09/201730/09/201630/09/201630/09/201631/03/201731/03/201731/03/2017
UnauditedUnauditedUnauditedUnauditedUnauditedUnauditedAuditedAuditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Auctions 21,899 (607) 21,292 18,851 - 18,851 38,169 (272) 37,897
Finance 7,313 (194) 7,119 7,109 - 7,109 12,700 - 12,700
Fleet 56,114 - 56,114 49,216 - 49,216 97,858 - 97,858
Buy Right Cars 30,368 (1,410) 28,958 11,006 - 11,006 44,745 (511) 44,234
115,694(2,211)113,48386,182-86,182193,472(783)192,689
Segment assetsSegment liabilities
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
2. SEGMENTAL INFORMATION
2.1 OPERATING SEGMENTS (continued)
Other material non-cash items
RevenueExpenses
30/09/201730/09/201631/03/201730/09/201730/09/201631/03/2017
UnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000
Automotive retail - impairment provisions - - - 207 121 297
Finance - impairment provisions - - - 2,016 601 1,710
Insurance - impairment provisions - - - 53 14 16
Automotive retail - revaluation of investment 590 523 729 - - -
Finance - investment property - - 500 - - -
Collection services - New Zealand - deferred revenue 241 597 1,061 - - -
Insurance - reverse annuity mortgage interest 432 396 825 - - -
Corporate & Other - reverse annuity mortgage interest - 60 60 - - -
1,2631,5763,1752,2767362,023
2.2 SEGMENT ASSETS AND LIABILITIES
30/09/201730/09/201631/03/201730/09/201730/09/201631/03/2017
UnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000
Automotive retail 140,406 119,932 134,160 108,698 95,565 103,821
Finance 228,077 143,886 174,134 178,439 99,215 126,528
Collection Services - New Zealand 26,625 28,163 25,974 7,824 13,908 9,246
Collection Services - Australia 1,852 1,570 1,908 758 683 890
Insurance 117,862 43,030 118,722 64,413 33,980 66,503
Corporate & Other285,026280,569266,40372,386101,43079,169
799,848617,150721,301432,518344,781386,157
Eliminations(174,326)(184,067)(164,668)(7,732)(63,019)(1,240)
625,522433,083556,633424,786281,762384,917
2.3 AUTOMOTIVE RETAIL SEGMENT ANALYSISRevenueRevenueRevenue
TotalInter-fromTotalInter-fromTotalInter-from
segmentsegmentexternalsegmentsegmentexternalsegmentsegmentexternal
revenuerevenuecustomersrevenuerevenuecustomersrevenuerevenuecustomers
30/09/201730/09/201730/09/201730/09/201630/09/201630/09/201631/03/201731/03/201731/03/2017
UnauditedUnauditedUnauditedUnauditedUnauditedUnauditedAuditedAuditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Auctions 21,899 (607) 21,292 18,851 - 18,851 38,169 (272) 37,897
Finance 7,313 (194) 7,119 7,109 - 7,109 12,700 - 12,700
Fleet 56,114 - 56,114 49,216 - 49,216 97,858 - 97,858
Buy Right Cars 30,368 (1,410) 28,958 11,006 - 11,006 44,745 (511) 44,234
115,694(2,211)113,48386,182-86,182193,472(783)192,689
Segment assetsSegment liabilities
Turners Automotive Group Limited Half Year Report 2017
2322

TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
3. REVENUE
Revenue from continuing operations includes:
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Interest income
20,845 15,311 31,478
Sales of goods
83,928 59,532 139,153
Commission and other auction revenue
22,499 20,087 37,942
Finance related insurance commissions
2,401 1,148 6,839
Loan fee income
1,244 1,038 2,187
Insurance and life investment contract income
21,299 5,402 10,467
Collection income
10,090 9,813 19,093
Bad debts recovered
529 538 1,058
Other revenue
144 423 1,121
162,979 113,292 249,338
Other income includes:
Revaluation gain on investments
590 5231229
Dividend income
105 103 358
Gain of sale of property, plant and equipment
168 31 84
863 657 1,671
4. CASH AND CASH EQUIVALENTS
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Cash and cash equivalents
69,472 14,903 69,069
5. FINANCE RECEIVABLES AND REVERSE ANNUITY MORTGAGES
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Gross finance receivables
272,525 183,153 213,130
Deferred fee revenue and commission expenses
4,410 (1,346) 41
Provision for impairment
(7,706) (5,755) (6,028)
269,229 176,052 207,143
The Group's insurance business is required to comply with the solvency standards for licensed insurers issued by the Reserve Bank of New
Zealand. The solvency standards specify the level of assets the insurance business is required to hold in order to meet solvency requirements,
consequently all cash and cash equivalents held in the insurance business may not be available for use by the wider Group. The Group's
insurance business' cash and cash equivalents at 30 September 2017 were $48.1m (30 September 2016: $6.2m; 31 March 2017: $55.6m).
Cash and cash equivalents at 30 September 2017 of $8.0m (30 September 2016 :$nil; 31 March 2017 : $2.1m) belongs to the Turners Marque
Warehouse Trust 1 and is not available to the Group.
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
5. FINANCE RECEIVABLES AND REVERSE ANNUITY MORTGAGES (continued)
30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Reverse annuity mortgages
9,050 9,831 9,291
Provision for impairment
(83) (62) (69)
8,967 9,769 9,222
Fair value
Finance receivables
263,963 175,727 206,786
Reverse annuity mortgages
11,854 13,400 10,721
Securitisation
The fair value of finance receivables are based on cash flows discounted using a weighted average interest rate of 15.38% (30 September 2016:
15.98% and 31 March 2017: 15.51%) and the fair value for reverse annuity mortgages is estimated using a discounted cash flow model based on
a current market interest rate for similar products after making allowances for impairment.
The Group has a wholesale funding facility with the Bank of New Zealand (BNZ) under which it securtises finance receivables through The
Turners Marque Warehouse Trust 1 (the Trust). Under the facility, BNZ provide funding to the Trust secured by finance receivables sold to the
Trust from the finance sector. The facility is for a 24 month term that will be renewed annually. The facility is for $150m.
The Trust is a special purpose entity set up solely for the purpose of purchasing finance receivables from the finance sector with the BNZ funding
up to 92% of the purchase price with the balance funded by sub-ordinated notes from the Group. The New Zealand Guardian Trust Company
Limited has been appointed Trustee for the Trust and NZGT Security Trustee Limited as the security trustee. The Company is the sole
beneficiary.
The Group has the power over the Trust, exposure, or rights, to variable returns from its involvement with the Trust and the ability to use its
power over the Trust to affect the amount of the Group's returns from the Trust. Consequently the Group controls the Trust and has consolidated
the Trust into the Group financial statements.
The Group retains substantially all the risks and rewards relating to the finance receivables sold and therefore the finance receivables do not
qualify for derecognition and remain on the Group's consolidated statement of financial position.
During the reporting period $80.3m finance receivables were sold to the Trust (30 September 2016: $nil; 31 March 2017: $74.8m). As at 30
September 2017 the carrying value of financial receivables in the Trust was $117.6m (30 September 2016: $nil; 31 March 2017: $73.0m).
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
Turners Automotive Group Limited Half Year Report 2017
2726

TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
6. DIVIDENDS
Six monthsSix months Year
endedendedended
30/09/201730/09/201631/03/2017
$'000$'000$'000
Interim dividend for the year ended 31 March 2017 of $0.03 (2016: $0.00) per fully paid
share, imputed paid on 30 September 2016.
- 1,921 1,921
Interim dividend for the year ended 31 March 2017 of $0.03 (2016: $0.006) per fully
paid share, imputed paid on 23 December 2016 (15 December 2015, un-imputed).
-- 2,234
Interim dividend for the year ended 31 March 2017 of $0.04 (2016: $0.00) per fully paid
share, imputed paid on 12 April 2017.
2,980
--
Final dividend to the year ended 31 March 2017 of 0.045 cents (2016: $0.07) per fully
paid share, imputed, paid on 21 July 2017 (2016: 28 July 2016, un-imputed).
3,354 4,440 4,440
Total dividends provided for or paid 6,334 6,361 8,595
Dividends not recognised at the end of the half year:
Interim dividend for the year ended 31 March 2018 of $0.03 (2016: $0.00) per fully paid
share, fully imputed paid on 3 November 2017.
2,540
--
An interim dividend for the year ended 31 March 2018 of $0.03 per fully paid share,
fully imputed, (2016: $0.03), payable on 22 December 2007 (2016: 23 December
2016).
2,540 2,234 2,234
7. FAIR VALUE DISCLOSURES
Fair value of borrowings30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Fair value 306,969 199,254 266,416
Carrying value 306,786 198,849 265,889
Fair value of financial assets and liabilities carried at fair value are determined as follows:
Level 1 the fair value is calculated using quoted prices in active markets.
As at 30 September 2017, 30 September 2016 and 31 March 2017, the carrying value of cash and cash equivalents, other receivables and other
payables approximate their fair values due to the short-term nature of the financial assets or liabilities.
In addition to the above dividends, since the end of the period the directors have recommended the payment of the following dividends expected
to be paid our of retained earnings at 30 September 2017, bur not recognised as a liability at the end of the period:
The fair value of borrowings is based on cash flows discounted using a weighted average interest rate of 4.39% (30 September 2016: 5.0% and
31 March 2017: 4.65%).
Level 2 the fair value is estimated using inputs other than quoted prices in level 1 that are observable for the assets or liability, either directly (as
prices) or indirectly (derived from prices).
Level 3 the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
7. FAIR VALUE DISCLOSURES (continued)
30 September 2017Level 1Level 2Level 3Total
$’000$’000$’000$’000
Financial assets:
- 7,345-
7,345
- 3,620- 3,620
Investment property
-
-4,0004,000
- 10,965 4,000 14,965
Financial liabilities:
Derivative cash flow hedges- 43- 43
Financial liability at fair value through profit or loss-- 2,767
2,767
- 43 2,767 2,810
30 September 2016Level 1Level 2Level 3Total
$’000$’000$’000$’000
Financial assets:
-16,058-16,058
-2,800-2,800
406--406
40618,858-19,264
Financial liabilities:
Financial liability at fair value through profit or loss
--5,7545,754
31 March 2017Level 1Level 2Level 3Total
$’000$’000$’000$’000
Financial assets:
-7,190-7,190
-3,008-3,008
122--122
Investment property
--4,0004,000
Derivative cash flow hedges
-88-88
12210,2864,00014,408
Financial liabilities:
Financial liability at fair value through profit or loss
--7,6117,611
The fair value of financial assets and liabilities carried at fair value as well as the methods used to calculate fair value are summarised in the
table below.
Financial assets at fair value through profit or loss - investment equities
Financial assets at fair value through profit or loss - investment equities
Financial assets at fair value through profit or loss - investment equities
Financial assets at fair value through profit or loss - insurance
Financial assets at fair value through profit or loss - insurance
Financial assets at fair value through profit or loss - other
Financial assets at fair value through profit or loss - insurance
Financial assets at fair value through profit or loss - term deposits
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
6. DIVIDENDS
Six monthsSix months Year
endedendedended
30/09/201730/09/201631/03/2017
$'000$'000$'000
Interim dividend for the year ended 31 March 2017 of $0.03 (2016: $0.00) per fully paid
share, imputed paid on 30 September 2016.
- 1,921 1,921
Interim dividend for the year ended 31 March 2017 of $0.03 (2016: $0.006) per fully
paid share, imputed paid on 23 December 2016 (15 December 2015, un-imputed).
-- 2,234
Interim dividend for the year ended 31 March 2017 of $0.04 (2016: $0.00) per fully paid
share, imputed paid on 12 April 2017.
2,980--
Final dividend to the year ended 31 March 2017 of 0.045 cents (2016: $0.07) per fully
paid share, imputed, paid on 21 July 2017 (2016: 28 July 2016, un-imputed).
3,354 4,440 4,440
Total dividends provided for or paid 6,334 6,361 8,595
Dividends not recognised at the end of the half year:
Interim dividend for the year ended 31 March 2018 of $0.03 (2016: $0.00) per fully paid
share, fully imputed paid on 3 November 2017.
2,540--
An interim dividend for the year ended 31 March 2018 of $0.03 per fully paid share,
fully imputed, (2016: $0.03), payable on 22 December 2007 (2016: 23 December
2016).
2,540 2,234 2,234
7. FAIR VALUE DISCLOSURES
Fair value of borrowings30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Fair value 306,969 199,254 266,416
Carrying value 306,786 198,849 265,889
Fair value of financial assets and liabilities carried at fair value are determined as follows:
Level 1 the fair value is calculated using quoted prices in active markets.
The fair value of borrowings is based on cash flows discounted using a weighted average interest rate of 4.39% (30 September 2016: 5.0% and
31 March 2017: 4.65%).
Level 2 the fair value is estimated using inputs other than quoted prices in level 1 that are observable for the assets or liability, either directly (as
prices) or indirectly (derived from prices).
Level 3 the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
As at 30 September 2017, 30 September 2016 and 31 March 2017, the carrying value of cash and cash equivalents, other receivables and other
payables approximate their fair values due to the short-term nature of the financial assets or liabilities.
In addition to the above dividends, since the end of the period the directors have recommended the payment of the following dividends expected
to be paid our of retained earnings at 30 September 2017, bur not recognised as a liability at the end of the period:
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
6. DIVIDENDS
Six monthsSix months Year
endedendedended
30/09/201730/09/201631/03/2017
$'000$'000$'000
Interim dividend for the year ended 31 March 2017 of $0.03 (2016: $0.00) per fully paid
share, imputed paid on 30 September 2016.
- 1,921 1,921
Interim dividend for the year ended 31 March 2017 of $0.03 (2016: $0.006) per fully
paid share, imputed paid on 23 December 2016 (15 December 2015, un-imputed).
-- 2,234
Interim dividend for the year ended 31 March 2017 of $0.04 (2016: $0.00) per fully paid
share, imputed paid on 12 April 2017.
2,980--
Final dividend to the year ended 31 March 2017 of 0.045 cents (2016: $0.07) per fully
paid share, imputed, paid on 21 July 2017 (2016: 28 July 2016, un-imputed).
3,354 4,440 4,440
Total dividends provided for or paid 6,334 6,361 8,595
Dividends not recognised at the end of the half year:
Interim dividend for the year ended 31 March 2018 of $0.03 (2016: $0.00) per fully paid
share, fully imputed paid on 3 November 2017.
2,540--
An interim dividend for the year ended 31 March 2018 of $0.03 per fully paid share,
fully imputed, (2016: $0.03), payable on 22 December 2007 (2016: 23 December
2016).
2,540 2,234 2,234
7. FAIR VALUE DISCLOSURES
Fair value of borrowings30/09/201730/09/201631/03/2017
UnauditedUnauditedAudited
$'000$'000$'000
Fair value 306,969 199,254 266,416
Carrying value 306,786 198,849 265,889
Fair value of financial assets and liabilities carried at fair value are determined as follows:
Level 1 the fair value is calculated using quoted prices in active markets.
As at 30 September 2017, 30 September 2016 and 31 March 2017, the carrying value of cash and cash equivalents, other receivables and other
payables approximate their fair values due to the short-term nature of the financial assets or liabilities.
In addition to the above dividends, since the end of the period the directors have recommended the payment of the following dividends expected
to be paid our of retained earnings at 30 September 2017, bur not recognised as a liability at the end of the period:
The fair value of borrowings is based on cash flows discounted using a weighted average interest rate of 4.39% (30 September 2016: 5.0% and
31 March 2017: 4.65%).
Level 2 the fair value is estimated using inputs other than quoted prices in level 1 that are observable for the assets or liability, either directly (as
prices) or indirectly (derived from prices).
Level 3 the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
Turners Automotive Group Limited Half Year Report 2017
2928

TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
7. FAIR VALUE DISCLOSURES (continued)
Fair value insurance
Fair value assets - investment in equities
Fair value liability - term deposits and fixed interest securities
Fair value - investment property
Financial liability at fair value through profit or loss – contingent consideration
Buy Right Cars
Autosure
At 31 March 2017, a charge of $0.5m was recognised in profit or loss for the contingent consideration arrangement as the assumed probability
adjusted earn out consideration was increased from $3.4m to $3.5m and the discount rate changed from 4.8%to 4.55%. Assuming all other
variables are held constant, and an increase in net profit before tax of 1% in each earn out period, the contingent consideration would increase
by $68,000.
At acquisition date contingent consideration of $0.8m was recognised and not re-measured at 31 March 2017 as the acquisition took place on
that date. The maximum consideration to be paid is $1.0m. There was no change to the fair value at 30 September 2017.
The fair value of the contingent consideration was determined using estimates of the expected pay out discounted at current borrowing rates.
The financial assets in this category back life investment contract liabilities and are investments in managed funds. The fair value of the
investments in the managed funds are determined by reference to published exit prices, being the redemption price based on the market price
quoted by the fund manager, ANZ Investments Limited.
These financial liabilities are exposed to interest rate risk as disclosed above.
The fair value of the investment in equities has been estimated by reference to recent transactions with MTF shares.
The fair value of investment property at 31 March 2017 was determined by an independent registered valuer using the comparable sales
methodology.
Term deposits are recognised at fair value based on quoted bid market price.
This is a level 3 fair value measurement and the key unobservable assumption used in determining the consideration is the probable sales price.
A change in sales price of +/- 5% would increase/(decrease) the total fair value and profit or loss by $0.2m/($0.2m).
At the 30 September 2016, the contingent consideration at acquisition date was provisionally recognised at $5.8m. At 31 March 2017, the
contingent consideration at acquisition date was revised to $6.3m and re-measured to $6.8m at 31 March 2017. At 30 September 2017, following
the July 2017 earn out payment, the contingent consideration was remeasured to $2.8m.
The fair value estimate, at acquisition date, of the contingent consideration was determined by discounting the probability adjusted earn out
consideration of $6.8m by 4.8%.
At 30 September 2017 a release of $0.4m was recognised in the profit or loss for the contingent consideration arrangement as the assumed
probability adjusted earn out consideration for the second period changed from $3.4m to $3.0m, there was no change to the discount rate.
Assuming all other variables are held constant, and an increase in net profit before tax of 1% for the earn out period, the contingent
consideration would increase by $30,000.
This is a level 3 fair value measurement and the key unobservable assumptions used in determining the probability adjusted earn out
consideration was the probability of achieving 65% to 150% of the annual net profit performance target established in the sales and purchase
agreement for the two earn out periods.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
7. FAIR VALUE DISCLOSURES (continued)
Future development may require further revisions to the contingent considerations for Buy Right Cars and Autosure.
Derivative cash flow hedge
Reconciliation of recurring level 3 fair value movements:30/09/201631/03/2017
AssetsUnauditedUnauditedAudited
$'000$'000$'000
Opening balance 4,000--
-- 3,500
-- 500
Closing balance 4,000-4000
Liabilities
Opening balance 7,611--
- 5,754 6,342
-- 775
(4,416)--
(428)- 494
Closing balance 2,767 5,754 7,611
8. COMMITMENT & CONTINGENT LIABILITIES
9. SUBSEQUENT EVENTS AFTER BALANCE DATE
30 September 2017
There were no material events subsequent to balance date.
30 September 2016
Autosure
MTF exclusive partnership
The fair value estimate, at acquisition date, of the contingent consideration was determined by discounting the probability adjusted earn out
consideration of $ 0.8m by 4.55%.
On 15 November 2016, the Group announced that it had signed and exclusive partnership with Motor Trade Finance (MTF) to provide a non-
recourse lending product to MTF's network of franchisees and dealers.
On 21 November 2016, the Group announced it had reached an agreement to purchase the Autosure business including the Autosure brand,
mechanical breakdown and payment protection insurance portfolios for a consideration of $34.0m. Settlement occurred on 1 December 2016,
with the transfer of the in-force portfolio by 31 March 2017, subject to Reserve Bank approval.
The Group had no capital commitment at 30 September 2017 (30 September 2016: $4.4m; 31 March 2017: $3.4m, principally relating to the
purchase of the land).
On acquisition contingent consideration - Buy Right Cars
Payment of period one and part of period two earn out consideration
On acquisition contingent consideration - Autosure
Revaluation at reporting date - Buy Right Cars
Transfer from finance receivables (exercise security interest)
Revaluation at reporting date - investment property
This is a level 3 fair value measurement and the key unobservable assumptions used in determining the probability adjusted earn out
consideration was the probability of achieving 96% to 100% of the gross written premium target established in the sales and purchase
agreement.
The fair value of forward exchange contracts is determined using forward exchange rates at balance date, with the resulting value discounted to
present value.
30/09/2017
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
7. FAIR VALUE DISCLOSURES (continued)
Fair value insurance
Fair value assets - investment in equities
Fair value liability - term deposits and fixed interest securities
Fair value - investment property
Financial liability at fair value through profit or loss – contingent consideration
Buy Right Cars
Autosure
At 31 March 2017, a charge of $0.5m was recognised in profit or loss for the contingent consideration arrangement as the assumed probability
adjusted earn out consideration was increased from $3.4m to $3.5m and the discount rate changed from 4.8%to 4.55%. Assuming all other
variables are held constant, and an increase in net profit before tax of 1% in each earn out period, the contingent consideration would increase
by $68,000.
At acquisition date contingent consideration of $0.8m was recognised and not re-measured at 31 March 2017 as the acquisition took place on
that date. The maximum consideration to be paid is $1.0m. There was no change to the fair value at 30 September 2017.
The fair value of the contingent consideration was determined using estimates of the expected pay out discounted at current borrowing rates.
The financial assets in this category back life investment contract liabilities and are investments in managed funds. The fair value of the
investments in the managed funds are determined by reference to published exit prices, being the redemption price based on the market price
quoted by the fund manager, ANZ Investments Limited.
These financial liabilities are exposed to interest rate risk as disclosed above.
The fair value of the investment in equities has been estimated by reference to recent transactions with MTF shares.
The fair value of investment property at 31 March 2017 was determined by an independent registered valuer using the comparable sales
methodology.
Term deposits are recognised at fair value based on quoted bid market price.
This is a level 3 fair value measurement and the key unobservable assumption used in determining the consideration is the probable sales price.
A change in sales price of +/- 5% would increase/(decrease) the total fair value and profit or loss by $0.2m/($0.2m).
At the 30 September 2016, the contingent consideration at acquisition date was provisionally recognised at $5.8m. At 31 March 2017, the
contingent consideration at acquisition date was revised to $6.3m and re-measured to $6.8m at 31 March 2017. At 30 September 2017, following
the July 2017 earn out payment, the contingent consideration was remeasured to $2.8m.
The fair value estimate, at acquisition date, of the contingent consideration was determined by discounting the probability adjusted earn out
consideration of $6.8m by 4.8%.
At 30 September 2017 a release of $0.4m was recognised in the profit or loss for the contingent consideration arrangement as the assumed
probability adjusted earn out consideration for the second period changed from $3.4m to $3.0m, there was no change to the discount rate.
Assuming all other variables are held constant, and an increase in net profit before tax of 1% for the earn out period, the contingent
consideration would increase by $30,000.
This is a level 3 fair value measurement and the key unobservable assumptions used in determining the probability adjusted earn out
consideration was the probability of achieving 65% to 150% of the annual net profit performance target established in the sales and purchase
agreement for the two earn out periods.
TURNERS AUTOMOTIVE GROUP LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017
7. FAIR VALUE DISCLOSURES (continued)
Future development may require further revisions to the contingent considerations for Buy Right Cars and Autosure.
Derivative cash flow hedge
Reconciliation of recurring level 3 fair value movements:30/09/201631/03/2017
AssetsUnauditedUnauditedAudited
$'000$'000$'000
Opening balance 4,000--
-- 3,500
-- 500
Closing balance 4,000-4000
Liabilities
Opening balance 7,611--
- 5,754 6,342
-- 775
(4,416)--
(428)- 494
Closing balance 2,767 5,754 7,611
8. COMMITMENT & CONTINGENT LIABILITIES
9. SUBSEQUENT EVENTS AFTER BALANCE DATE
30 September 2017
There were no material events subsequent to balance date.
30 September 2016
Autosure
MTF exclusive partnership
The fair value estimate, at acquisition date, of the contingent consideration was determined by discounting the probability adjusted earn out
consideration of $ 0.8m by 4.55%.
On 15 November 2016, the Group announced that it had signed and exclusive partnership with Motor Trade Finance (MTF) to provide a non-
recourse lending product to MTF's network of franchisees and dealers.
On 21 November 2016, the Group announced it had reached an agreement to purchase the Autosure business including the Autosure brand,
mechanical breakdown and payment protection insurance portfolios for a consideration of $34.0m. Settlement occurred on 1 December 2016,
with the transfer of the in-force portfolio by 31 March 2017, subject to Reserve Bank approval.
The Group had no capital commitment at 30 September 2017 (30 September 2016: $4.4m; 31 March 2017: $3.4m, principally relating to the
purchase of the land).
On acquisition contingent consideration - Buy Right Cars
Payment of period one and part of period two earn out consideration
On acquisition contingent consideration - Autosure
Revaluation at reporting date - Buy Right Cars
Transfer from finance receivables (exercise security interest)
Revaluation at reporting date - investment property
This is a level 3 fair value measurement and the key unobservable assumptions used in determining the probability adjusted earn out
consideration was the probability of achieving 96% to 100% of the gross written premium target established in the sales and purchase
agreement.
The fair value of forward exchange contracts is determined using forward exchange rates at balance date, with the resulting value discounted to
present value.
30/09/2017
Turners Automotive Group Limited Half Year Report 2017
3130

DIRECTORY
CORPORATE
DIRECTORY
DIRECTORS
Grant Baker
Chairman
Appointed10 September 2009

Paul Byrnes
Deputy chairman & executive director
Appointed 2 February 2004

Matthew Harrison
Non-executive director
Appointed 12 December 2012

Alistair Petrie
Non-executive director
Appointed 24 February 2016

John Roberts
Independent Director
Appointed 1 July 2015

Antony Vriens
Independent Director
Appointed 12 January 2015

REGISTERED OFFICE
Level 8
34 Shortland Street
Auckland
New Zealand

PO Box 1232
Shortland Street
Auckland 1140
New Zealand

Freephone: 0800 100 601
Email enquiries: info@turnersautogroup.co.nz
Web: www.turnersautogroup.co.nz
SHARE REGISTRAR
Computershare Investor Services Limited
Level 2,
59 Hurstmere Road,
Takapuna, Auckland
New Zealand

Private Bag 92119
Victoria Street West
Auckland 1142,
New Zealand

Telephone: +64 9 488 8777
Email: enquiry@computershare.co.nz
Website: www.computershare.co.nz

AUDITOR
Staples Rodway

NOTES
Turners Automotive Group Limited Half Year Report 2017
3332

NOTESNOTES
Turners Automotive Group Limited Half Year Report 2017
3534

Turners Automotive Group
Limited
Level 8, 34 Shortland Street
PO Box 1232, Auckland 1140
T: 0800 100 601
E: info@turnersautogroup.co.nz
www.turnersautogroup.co.nz

TRA – Australian Interim Results Roadshow Presentation TURNERS REPORTS MINIMAL IMPACT FROM STINK BUG

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.