TRA delivers a solid 28% increase in net profit after tax

Company Announcement

27 November 2018
Turners Automotive Group delivers a solid 28% increase in net profit after tax

 28% increase in net profit after tax with strong outperformance from the insurance business
offsetting a country-wide slowdown in the automotive retail sector
 Further quarterly dividend of 4cps declared taking total half year dividends to 8cps
 Continued focus on optimising real estate assets delivers $3.4m gain from the sale of Wiri
holding
 Industry-wide headwinds emerging in the automotive retail sector with a potential downside
impact of 5 - 10% to forecasted FY19 pre-tax profits if current market conditions persist
 On-Market Share Buyback of up to 5% of issued shares announced with current share price
considered undervalued by Directors

Turners Automotive Group has delivered a 28% increase in profit for the six months to 30 September
2018, driven by a continuing outperformance from the insurance business and a $3.4m gain on the
sale of an Auckland property, offsetting headwinds in the Auckland automotive retail market.
Operating revenue was $164.6m for the period, in line with the previous year, with the cost of goods
sold decreasing by 9% to $65.3m. This reflects more sales on consignment through Turners’ auctions
and therefore less owned stock.
Total revenue of $168.3m includes $3.4m from the sale of the property in Wiri, Auckland in
September 2018, which has been leased back in line with Turners’ property strategy.
Net Profit Before Tax (NPBT), which is the basis for Turners’ full year guidance, increased 18% to
$16.8m, with Net Profit After Tax (NPAT) of $12.9m. Earnings per share were up 14% to 15.19 cents
per share for the half year. Shareholder equity increased to $217.3m as at 30 September 2018.
The Board has declared a further quarterly fully imputed dividend of 4.0 cps, taking half year
dividends to 8.0 cents per share. This is in line with Turners’ enhanced dividend policy of a payout
ratio of 50% to 60% of NPAT, with the Board expecting to declare full year fully imputed dividends of
a minimum 17 cents per share.
Chairman of Turners, Grant Baker, commented: “The business has shown some resilience through
tough market conditions in Q1 and bounced back strongly in Q2. The diversified revenue streams
have really demonstrated their value through the first half of this year. However, market conditions,
particularly in the used import car market, remain challenging and pressure is being placed on
vehicle margins right across the industry. Within the key market of Auckland we have seen a
material reduction in demand which we attribute to the cost pressures being experienced by many
people across the Auckland region in fuel prices, rents, and other household costs.
“If October market conditions continue to be the environment we are working in, NPBT could be
impacted by 5 – 10% from our previous guidance range of $34m to $36m.”

Company Announcement

27 November 2018
Trading Performance
Turners operates an integrated business helping retail and wholesale customers across three
divisions – Automotive Retail, Finance and Insurance, and Debt Management Services. This model
provides a number of advantages, from the ability to offer an end-to-end customer journey and
higher margin transactions in controlled channels, through to better customer relationships,
diversification of earnings and a balanced mix of annuity and transactional revenue.
Automotive Retail (Turners Group, Buy Right Cars): Revenue $111.8m down 1%, Op profit $8.0m
down 9%
Unit sales and market share have grown in both the Turners and Buy Right cars business in the first
half. Turners Group delivered an improved year on year result, while Buy Right Cars delivered a
lower than expected result due to pressure on margins and volumes.
The import market is facing headwinds with challenges on both the demand and supply side. The
number of used imports is down and landing costs have increased due to stricter controls following
the stink bug issue. This is primarily affecting Buy Right Cars, which has a higher proportion of import
sales.
Demand in the highly competitive Auckland market, where 9 of the 10 Buy Right Cars sites are
located, has also weakened, with pressures from increased living and fuel costs. A range of initiatives
are in place to drive customers instore and leverage the high consumer trust in the Turners’ brand.
Investment is being made into expanding and optimising the national retail network, training and
development of sales staff, and digital initiatives to offset the softer conditions and drive sales. New
sites in Wellington City, New Plymouth and Hamilton are all expected to contribute to operating
profit in the second half of FY19.
The challenging conditions will inevitably lead to consolidation in the dealer market which will
provide Turners with further opportunity in the medium term, as both Turners and Buy Right Cars
focus on building market share.
Finance (Oxford Finance): Revenue $21.6m up 21%, Op profit $5.4m down 2%
Excluding the MTF channel, Oxford Finance performed well in the half year, with the focus on higher
quality lending delivering volumes ahead of budget and the prior year. The primary impact on results
was the impairment levels for MTF non-recourse loans which have been higher than anticipated.
Stricter lending criteria have been introduced and MTF lending processes and credit scoring systems
have also been reviewed to ensure robustness, with changes made progressively over the past six
months. While the performance of the non-recourse loan offer has been disappointing, MTF’s
network of over 300 dealers and franchisees remains an attractive channel for Oxford Finance.
The network of dealers selling Oxford Finance products continues to grow with an additional 120
dealers on-boarded in the first half. Improvements to the Autoapp online loan approval platform are
making it easier and faster for dealers and customers to gain a response on loan applications.

Company Announcement

27 November 2018
From September, all loans originating through Turners Cars have been directed into Oxford Finance.
This will see circa $4 million a month of high quality lending directed into Oxford, with the benefit to
the wider group meaning more margin and an improving risk profile.
Insurance (Autosure): Revenue $25.7m up 15%, Op profit $6.4m up 144%
The insurance business continues to go from strength to strength following the acquisition of
Autosure in FY18. Good progress is being made on claims costs and ratios, and premium is growing
as risk is more appropriately priced.
The focus is on identifying further opportunities for claims efficiencies and cost reductions. Fintech
will play an important role in this and Autosure insurance products are now being integrated into
AutoApp digital finance selling platform, making it easier for dealers to transact both insurance and
finance products through the one system.
Debt Management (EC Credit Control): Revenue $9.3m down 9%, Op profit $3.1m down 10%
The softer half year result was primarily due to the loss of a large Australian customer which has
insourced its collections services.
There has been solid growth in the New Zealand corporate debt market from both new and existing
customers, with debt load up 20% on FY18. In addition, record monthly sales of SME products are
being seen. The Australian debt market offers a significantly larger opportunity but is more
challenging, and additional resource is being put into Australia to improve penetration. Technology
is enabling more efficient and effective debt collection, such as the dialler technology and the
development of a debtor scorecard to assist with improving collection results.
Funding and Capital Management
Turners has strong and diversified funding arrangements in place, with headroom for forecast
business growth. The securitisation warehouse has recently been extended to $200m, and the new
banking syndication with ASB and BNZ is working effectively. Pleasingly, the replacement three year
bond programme was fully subscribed to $25 million.
The Board continues to consider that Turners’ share price does not reflect the fundamental value of
the business and is not consistent with valuations from analysts or other independent advisors.
Therefore, the company is announcing its intention to undertake an On-Market Share Buyback
programme of up to 5% of shares on issue.
Grant Baker commented: “The Board believes the purchase of company shares, which are priced
significantly below their intrinsic value, is an appropriate use of capital and will be of benefit to
shareholders. We are confident in the long term prospects for solid and improving group earnings
resulting in increasing balance sheet strength. This positive outlook supports the Share Buyback
initiative”
CEO Comment
CEO of Turners, Todd Hunter, said: “The building blocks put in place in FY18 have created a
simplified and more effective business with common operating and funding platforms.

Company Announcement

27 November 2018
“We are continuing to realise the benefits of our integrated business model and are investing into
training and development, fintech, product innovation and the customer experience. We have a
wealth of valuable data within our business and are leveraging this to engage with our customers,
deliver better service and identify new opportunities to do what we do better.
“The investments we are making into people, property and our businesses will deliver further
benefits in the second half and even though we have some market dynamics which are currently
problematic, we are building market share, growing our footprint, and improving our customer
offering which gives us real confidence in our strategy and long term prospects.”
ENDS
About Turners
Turners Automotive Group Limited is an integrated financial services group, primarily operating in
the automotive sector www.turnersautogroup.co.nz
For further information, please contact:
Todd Hunter, Chief Executive Officer, Turners Automotive Group Limited Mob: 021 722 818
Media Liaison and Assistance: Jackie Ellis, Mob: 027 246 2505

---

Reporting Period6 months to 30 September 2018
Previous Reporting Period6 months to 30 September 2017
Revenue from ordinary activities
Operating profit after tax - ordinary activities
Net profit attributable to security holders
Interim DividendAmount per securityImputed amount per
security
Record Date
Dividend Payment Date
Comments:
TURNERS AUTOMOTIVE GROUP LIMITED
Results for announcement to the market
Amount (NZD000s)Percentage change
168,2913%
12,88528%
12,75628%
$0.04000$0.01556
22 January 2019
30 January 2019
1

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
For the six months ended 30 September 2018
Six monthsSix monthsYear
endedendedended
30/09/201830/09/201731/03/2018
UnauditedUnauditedAudited
$'000$'000$'000
Revenue from continuing operations
164,573
162,979325,047
Other income
3,718
8635,423
Cost of goods sold
(65,274)
(71,430)(137,332)
Interest expense
(7,975)
(6,532)(14,344)
Impairment provision expense
(3,951)
(2,276)(6,380)
Subcontracted services expense
(6,839)
(5,375)(10,777)
Employee benefits (short term)
(27,108)
(25,589)(51,911)
Commission
(6,943)
(5,439)(12,107)
Advertising expense
(1,963)
(1,905)(4,001)
Depreciation and amortisation expense
(2,706)
(2,689)(5,627)
Property and related expenses
(5,693)
(5,118)(10,644)
Systems maintenance
(784)
(870)(1,822)
Claims
(13,527)
(15,920)(32,021)
Other expenses
(8,731)
(6,455)(12,371)
Profit before taxation
16,79714,24431,133
Taxation expense
(3,912)
(4,213)(7,773)
Profit from continuing operations
12,88510,03123,360
Other comprehensive income for the year (which may subsequently be
reclassified to profit/loss), net of tax
Cash flow hedges
(121)(43)(170)
Foreign currency translation differences(8)-2
Total other comprehensive income for the year(129)
(43)(168)
Total comprehensive income for the year
12,7569,98823,192
Earnings per share (cents per share)
Basic earnings per share
15.19
13.3629.26
Diluted earnings per share
14.89
13.2428.87
2

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
For the six months ended 30 September 2018
Share
Capital
Share
Options
Translation
Reserve
Cash flow
hedge
reserve
Retained
EarningsTotal
$’000$’000$’000$’000$’000$’000
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
Employee share based payments-217---217
Dividend paid----(6,334)(6,334)
Total transactions with shareholders in their capacity as owners 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
Transactions with shareholders in their capacity as owners
Capital contributions (net of issue costs)5,190----5,190
Employee share based payments-276---276
Dividend paid----(5,083)(5,083)
Total transactions with shareholders in their capacity as owners 5,190 276 - - (5,083) 383
Comprehensive income
Profit----13,32913,329
Other comprehensive income--2(127)-(125)
Total comprehensive income for the period, net of tax - - 2 (127) 13,329 13,204
Balance at 31 March 2018 (audited) 199,148 701 (21) (164) 14,659 214,323
Change in accounting policy----(1,839)(1,839)
Transactions with shareholders in their capacity as owners
Employee share based payments
-163---163
Dividend paid
----(8,056)(8,056)
Total transactions with shareholders in their capacity as owners
- 163 - - (8,056) (7,893)
Comprehensive income
Profit
----12,88512,885
Other comprehensive income
--(8)(121)-(129)
Total comprehensive income for the period, net of tax
- - (8) (121) 12,885 12,756
Balance at 30 September 2018 (unaudited)
199,148 864 (29) (285) 17,649 217,347
3

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As at 30 September 2018
30/09/201830/09/201731/03/2018
UnauditedUnauditedAudited
$'000$'000$'000
Assets
Cash and cash equivalents
24,085
69,472 25,145
Financial assets at fair value through profit or loss
- Insurance
51,693
7,345 49,749
- Other
3,579
3,620 3,629
Trade receivables
11,505
12,095 11,323
Inventory
42,877
42,143 38,596
Finance receivables
290,091
269,229 289,799
Other receivables and deferred expenses
14,291
10,238 11,747
Reverse annuity mortgages
9,287
8,967 9,997
Investment property
4,820
4,000 4,820
Property, plant and equipment
35,122
23,736 35,945
Intangible assets
170,843
171,527 170,982
Total assets
658,193
622,372 651,732
Liabilities
Other payables
28,010
29,721 34,875
Financial liability at fair value through profit or loss
174
2,767 226
Deferred revenue
6,113
5,766 5,506
Deferred tax
17,614
20,044 18,786
Tax payable
856
1,681 5,029
Derivative financial instruments
295
43 111
Borrowings
330,291
306,786 317,373
Life investment contract liabilities
7,573
8,079 7,127
Life insurance contract liabilities
49,920
46,749 48,376
Total liabilities
440,846
421,636 437,409
Shareholders' equity
Share capital
199,148
193,958 199,148
Other reserves
550
365 516
Retained earnings
17,649
6,413 14,659
Total shareholders' equity
217,347
200,736 214,323
Total shareholders' equity and liabilities
658,193
622,372 651,732
Total assets per share ($)7.767.507.69
Net tangible assets ($)
0.76
0.59 0.73
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 and financial assets at fair value through profit or loss
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 2018 were $12.8m (30 September 2017: $48.1m; 31 March 2018: $9.2m).
Cash and cash equivalents at 30 September 2018 of $2.9m (30 September 2017 :$8.0m; 31 March 2018: $4.9m) belongs to the
Turners Marque Warehouse Trust 1 and is not available to the Group.
4

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED CASH FLOW
STATEMENT
For the six months ended 30 September 2018
Six monthsSix monthsYear
endedendedended
30/09/201830/09/201731/03/2018
UnauditedUnauditedAudited
$'000$'000$'000
Cash flows from operating activities
Interest received 25,037 18,873 41,925
Receipts from customers 138,210 144,415 281,031
Interest paid(6,782) (4,009) (9,609)
Payment to suppliers and employees(150,395) (139,330) (266,124)
Income tax paid(8,671) (4,465) (5,824)
Net cash inflow/(outflow) from operating activities before
changes in operating assets and liabilities(2,601) 15,484 41,399
Net increase in finance receivables(9,770) (54,372) (75,248)
Net decrease in reverse annuity mortgages 1,146 672 66
Net (increase)/decrease of financial assets at fair value through profit or loss(1,348) 305 (41,937)
Net (withdrawals)/contribution from life investment contracts 124 (4,877) (5,765)
Changes in operating assets and liabilities arising from
cash flow movements(9,848) (58,272) (122,884)
Net cash (outflow)/inflow from operating activities(12,449) (42,788) (81,485)
Cash flows from investing activities
Proceeds from sale of property, plant, equipment and intangibles 8,858 152 3,944
Purchase of property, plant, equipment and intangible assets(5,811) (6,116) (22,698)
Purchase of subsidiaries and investments - (3,733) (3,754)
Net cash inflow from investing activities 3,047 (9,697) (22,508)
Cash flows from financing activities
Net bank loan advances 16,398 34,756 39,005
Proceeds from the issue of share issue - 24,466 29,656
Proceeds from the issue of bonds - - -
Other borrowings - 2,837
Dividend paid(8,056) (6,334) (11,417)
Net cash inflow/(outflow) from financing activities 8,342 52,888 60,081
Net movement in cash and cash equivalents(1,060) 403 (43,912)
Add opening cash and cash equivalents 25,145 69,069 69,069
Cash included with purchase of subsidiaries - - -
Translation difference - - (12)
Closing cash and cash equivalents24,085 69,472 25,145
5

TURNERS AUTOMOTIVE GROUP LIMITED
CONDENSED CONSOLIDATED CASH FLOW
STATEMENT
For the six months ended 30 September 2018
Six monthsSix monthsYear
endedendedended
30/09/201830/09/201731/03/2018
UnauditedUnauditedAudited
$'000$'000$'000
RECONCILIATION OF NET SURPLUS WITH CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) 12,885 10,031 23,360
Adjustment for Non-cash items and other items
Impairment (charge)/ release on finance receivables, reverse annuity mortgages and other receivables
3,994 2,281 6,390
Net (profit)/loss on sale fixed assets
(3,610) (227) (1,000)
Depreciation and amortisation 2,706 2,689 5,627
Capitalised reverse annuity mortgage interest
(451) (432) (869)
Deferred revenues 1,702 282 917
Fair value adjustments on assets/liabilities at fair value through profit and loss(548) (929) (1,139)
Net annuity and premium change to policyholders accounts 322 109 45
Non-cash long term employee benefits 160 238 516
Non-cash adjustments to finance receivables effective interest rates(42) 51 109
Deferred expenses(1,129) (5,909) (7,135)
Fair value adjustment on investment property - - (820)
Fair value adjustment to contingent consideration - - (2,845)
Adjustment for Movements in Working Capital
Net (increase)/decrease receivables and pre-payments
(2,280) (1,823) 1,009
Net (increase)/decrease in inventories
(4,281) 2,578 5,958
Net increase/(decrease) in payables
(7,254) 6,797 9,443
Net increase in finance receivables
(9,770) (54,372) (75,248)
Net decrease in reverse annuity mortgages
1,146 672 66
Net (increase)/decrease of insurance assets at fair value through profit or loss
(1,348) 305 (41,937)
Net contributions/(withdrawals) from life investment contracts
124 (4,877) (5,765)
Net (decrease)/increase in deferred tax liability
(4,159) 1,214 (48)
Net (decrease)/increase in tax payable
(616) (1,466) 1,881
Net Cash inflow/(outflow) from Operating Activities(12,449) (42,788) (81,485)
6

TURNERS AUTOMOTIVE GROUP LIMITED
SEGMENTAL INFORMATION
OPERATING SEGMENTS
RevenueRevenueRevenueRevenue
TotalInter-fromTotalInter-fromTotalInter-from
segmentsegmentexternalsegmentsegmentexternalsegmentsegmentexternal
revenuerevenuecustomersrevenuerevenuecustomersrevenuerevenuecustomers
30/09/201830/09/201830/09/201830/09/201730/09/201730/09/201731/03/201831/03/201831/03/2018
UnauditedUnauditedUnauditedUnauditedUnauditedUnauditedAuditedAuditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Automotive retail 112,765 (969) 111,796 115,694 (2,211) 113,483 226,434 (3,222) 223,212
Finance 21,564 - 21,564 17,791 - 17,791 39,747 - 39,747
Collection Services 9,249 - 9,249 10,189 - 10,189 18,677 18,677
Insurance 25,660 - 25,660 22,369 - 22,369 46,923 - 46,923
Corporate & Other 147 (125) 22 10 - 10 1,911 - 1,911
169,385 (1,094) 168,291 166,053 (2,211) 163,842 333,692 (3,222) 330,470
Operating profit30/09/201830/09/201731/03/2018
UnauditedUnauditedAudited
$'000$'000$'000
Automotive retail 8,013 8,771 16,550
Finance 5,423 5,537 11,735
Collection Services 3,076 3,413 6,069
Insurance 6,414 2,627 5,731
Corporate & Other(6,129) (6,104) (8,952)
Profit/(loss) before taxation16,79714,24431,133
Income tax(3,912) (4,213) (7,773)
Profit attributable to shareholders 12,885 10,031 23,360
Interest revenueInterest expense
30/09/201830/09/201731/03/201830/09/201830/09/201731/03/201830/09/201830/09/201731/03/2018
UnauditedUnauditedAuditedUnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Automotive retail4,6914,2899,311(2,456)(2,302)(4,767)(1,215)(1,242)(2,351)
Finance18,96915,71034,432(3,372)(2,643)(5,829)(172)(152)(348)
Collection Services4512---(43)(40)(93)
Insurance1,1679931,997---(144)(105)(681)
Corporate & Other147922(2,412)(1,748)(4,438)(1,132)(1,150)(2,154)
24,97821,00645,774(8,240)(6,693)(15,034)(2,706)(2,689)(5,627)
Eliminations(265)(161)(690)265161690---
24,71320,84545,084(7,975)(6,532)(14,344)(2,706)(2,689)(5,627)
Depreciation and
amortisation expenses
7

Other material non-cash items
RevenueExpenses
30/09/201830/09/201731/03/201830/09/201830/09/201731/03/2018
UnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000
Automotive retail - impairment provisions---(219)(207)(423)
Finance - impairment provisions---(3,657)(2,016)(5,929)
Insurance - impairment provisions---(75)(53)(28)
Automotive retail - revaluation of investment-590----
Collection services - deferred revenue84241433---
Insurance - reverse annuity mortgage interest451432869---
5351,2631,302(3,951)(2,276)(6,380)
2.2 SEGMENT ASSETS AND LIABILITIES
30/09/201830/09/201731/03/201830/09/201830/09/201731/03/2018
UnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000
Automotive retail152,295134,963152,006109,844103,255115,071
Finance249,401228,077255,937192,228178,439199,374
Collection Services29,94428,47728,7806,1238,5826,937
Insurance126,589117,862124,35867,05564,41369,213
Corporate & Other270,107285,026298,91270,64272,38689,443
828,336794,405859,993445,892427,075480,038
Eliminations(170,143)(172,033)(208,261)(5,046)(5,439)(42,629)
658,193622,372651,732440,846421,636437,409
2.3 AUTOMOTIVE RETAIL SEGMENT ANALYSISRevenueRevenueRevenue
TotalInter-fromTotalInter-fromTotalInter-from
segmentsegmentexternalsegmentsegmentexternalsegmentsegmentexternal
revenuerevenuecustomersrevenuerevenuecustomersrevenuerevenuecustomers
30/09/201830/09/201830/09/201830/09/201730/09/201730/09/201731/03/201831/03/201831/03/2018
UnauditedUnauditedUnauditedUnauditedUnauditedUnauditedAuditedAuditedAudited
$'000$'000$'000$'000$'000$'000$'000$'000$'000
Auctions22,872(218)22,65421,899(607)21,29241,655(472)41,183
Finance8,195(751)7,4447,313(194)7,11914,711(143)14,568
Fleet49,480-49,48056,114-56,114108,047-108,047
Buy Right Cars32,218-32,21830,368(1,410)28,95862,021(2,607)59,414
112,765(969)111,796115,694(2,211)113,483226,434(3,222)223,212
Operating profit30/09/201830/09/201731/03/2018
UnauditedUnauditedAudited
$'000$'000$'000
Auctions1,6592,4593,410
Finance3,3432,9565,724
Fleet2,5091,9934,970
Buy Right Cars5021,3632,446
8,0138,77116,550
Segment assetsSegment liabilities
8

Division assets and liabilitiesAssetsLiabilities
30/09/201830/09/201731/03/201830/09/201830/09/201731/03/2018
UnauditedUnauditedAuditedUnauditedUnauditedAudited
$'000$'000$'000$'000$'000$'000
Auctions39,73826,58344,39511,1117,19424,038
Finance62,46761,46366,29458,66558,31960,133
Fleet18,46620,65114,59514,43616,5658,373
Buy Right Cars31,62426,26628,54925,63221,17723,045
152,295134,963153,833109,844103,255115,589
Eliminations--(1,827)--(518)
152,295134,963152,006109,844103,255115,071
Five reportable segment have been identified as follows:
Automotive retail - remarketing (motor vehicles, trucks, heavy machinery and commercial goods) and purchasing goods for sale (motor vehicles and commercial goods) and related asset based finance to consumers.
Collection services - collection services, credit management and debt recovery services to the corporate and SME sectors. Geographically the collections services segment business activities are located in New Zealand and Australia.
Finance - provides asset based finance to consumers and SME's.
Insurance - marketing and administration of a range of life and consumer insurance and superannuation products.
Corporate & other - corporate centre.
9

10

Change in accounting polices
A number of new or amended standards became applicable for the current reporting period and the Group had to change its accounting policies and make adjustments to
opening retained earnings as a result of adopting the following standards:
 NZ IFRS 9 ‘Financial Instruments’; and
 NZ IFRS 15 ‘Revenue from Contracts with Customers’

The impact of the adoption of these standards and the new accounting policies are disclosed below. The other standards did not have any impact on the Group’s
accounting policies and did not require retrospective adjustment.
NZ IFRS 9 ‘Financial Instruments’
NZ IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. It replaces the guidance in NZ
IAS 39, 'Financial Instruments: Recognition and Measurement', that relates to the classification and measurement of financial instruments.
The Group has chosen not to restate comparative information and adjustments required by the application of the new standard have been made to the opening balance of
retained earnings recognised in the Statement of changes in equity for the six months ended 30 September 2018.
The Group’s classification measure of financial assets and liabilities under NZ IFRS 9 remains largely the same as it was under NZ IAS 39.
Impairment
The adoption of NZ IFRS 9 has fundamentally changed the Group’s accounting for impairment for financial assets by replacing NZ IAS 39’s incurred loss approach with a
forward-looking expected credit loss (ECL) approach.
NZ IFRS 9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not held at Fair value in profit or loss.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The
shortfall is then discounted at an approximation to the asset’s original effective interest rate.
The Group has calculated ECLs on 12 months of expected losses where there has not been a significant increase in credit risk and lifetime expected losses where there
has been a significant increase. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward- looking
factors specific to the debtors and economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain circumstances, the Group may also consider a
financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking
into account any credit enhancement held by the Group. The adoption of the ECL requirements of NZ IFRS 9 resulted in increases in impairment allowances for the
Group’s Finance receivables. The increase in allowance resulted in ($1,555,000) adjustment to Retained earnings.
NZ IFRS 15 ‘Revenue from Contracts with Customers’
NZ IFRS 15 introduces a five step process for revenue recognition with the core principle being for entities to recognise revenue to depict the transfer of goods or services
to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services.

The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to
contract with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling the
contract.

The Group elected to apply the retrospective cumulative effect method, with no restatement of comparative period amounts. The cumulative effect of applying the new
standard is included as an adjustment to the opening balance of retained earnings recognised in the Statement of changes in equity for the six months ended 30
September 2018.

The Group’s revenue recognition policies remain largely the same with the following exception:

Sales of service- Collection income
The Group has concluded that collection income should be recognised when the service is rendered. The adoption of NZ IFRS 15 has impacted the timing of when some
collection income and the related costs are recognised resulting ($284,000) adjustment to opening retained income.

Summary of NZ IFRS 9 and NX IFRS 15 adjustment to opening retained income:

$’000
Balance at 1 April 2018
14,659
NZ IFRS 9 adjustments:
Change in impairment
(2,160)
Deferred tax
605
NZ IFRS 15 Adjustment
Change in collection income
(617)
Change in collection expenses
348
Tax payable
23
Deferred tax
(38)
Adjusted balance at 1 April 201812,820

11


Subsequent events after balance date
On 1 October 2018, the 6.5% convertible bonds were settled by repaying $7,505,000 in cash, exchanging $4,814,000 for the new 5.5% subordinated bonds and issuing
4,646,037 ordinary shares at $2.85 per share ($13,241,000). On the same day $25,000,000 5.5% subordinated bonded with a 3 year term were issued.

Contingent liabilities
DPL Insurance Limited (DPL) and Vero Insurance New Zealand Limited (Vero) have agreed to an expert determination to decide the appropriate level of insurance
reserves to be transferred to DPL Insurance for the acquisition of the Autosure business. Both parties are seeking a payment. The directors consider that on balance of
probabilities DPL is likely to receive a payment. Pending the outcome of the determination, DPL may be required to make a payment to Vero. The date of the hearing is
set for 28 November 2018 with the outcome expected to be announced before the end of the year. At the date of this report, the timing and amount of any payment could
not be reliably estimated.

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change

whether:
Interim

YearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per security
Payment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
Supplementary
Amount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FWP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
last business day of the week.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
Ordinary sharesNZVNLE0001S1
EMAIL: announce@nzx.com
Notice of event affecting securities
1
Turners Automotive Group Limited
Barbara BadishDirectors' resolution
09 308 496709 308 498227112018
Enter N/A if not
applicable
In dollars and cents
Retained earnings
$0.04000
$0.00000
NZD$0.007059
$3,579,213
Date Payable
30 January, 2019
$$0.002778$0.015556
$
22 January, 201930 January, 2019

---

HY19 Interim Results Presentation
Interim Results
Presentation
For six months ending
30 September 2018
Turners Automotive Group

2018 Annual Meeting Presentation
TURNERS: AN
INTEGRATED
AUTOMOTIVE GROUP
•Turners is the biggest seller of
used cars, trucks and machinery
in NZ. We finance them and
insure them for mechanical
breakdown, accident and loan
repayments with the best range
of products in the market.
•We also operate in the Debt
Management sector, leveraging
off our expertise in the finance
market.
I NEED TO FINANCE
AND INSURE MY
VEHICLE
I NEED TO REPAIR
AND SERVICE MY
VEHICLE
I NEED TO
SELL MY
VEHICLE
I NEED TO BUY A
VEHICLE

HY19 Interim Results Presentation
THE KIWI CAR ECONOMY
61%
of people ended up spending
less than $10,000 on their car,
80% were less than $20,000
3.85m
Light vehicles in the NZ vehicle fleet
3,462
Registered dealers
in NZ
14yrs
Is the average age of used
vehicle in NZ since 2013
10,250 EVs
As at Sept 2018, double the fleet size
from Sept 2017.
NZ Used
import sales
8.6% down
used imported car sales were
down to 76,000 for H1, the
decline is greater in Auckland
at 12%.
21 years
The average age light
vehicles were scrapped
from fleet was 22 years for
an import and 21 years for
NZ new
Source: NZTA, Ministry of Transport, MBIE, Turners Market Research Nov 17
Note 1. Dealer-to-public plus ex-overseas sales
3
74,666
New passenger and light
commercial vehicles sold into NZ
for 6 months ended Sept 18
90,000
Vehicles de-registered in H1
FY19 up 12%

HY19 Interim Results Presentation
HY19 OPERATING ENVIRONMENT
•Softening demand with pressure from increased
living and fuel costs
-Auckland used import sales down 12% on
same period last year
-NZ used import sales down 9%
-Decline in used imports market has continued
into second half of the year
• Margins on all used vehicles being impacted by
drop in demand and impact of supply chain issues
(Takata airbag recall and Stink Bug mitigation)
•Large numbers of new cars being pre-registered
•Expecting consolidation in the used car industry.
4
50,000
60,000
70,000
80,000
90,000
1H151H161H171H181H19
Ex-Overseas Registrations
First Half Financial Year
Ex-overseas registrations lower than record 1H18,
consistent with 1H17 which was highest on record.

HY19 Interim Results Presentation
HY19 HIGHLIGHTS AND KEY EVENTS
5
RETAIL FINANCE & INSURANCE EC CREDIT CONTROL
•Retail sales through Turners Cars
up 3% v 1H18
•Expansion of national retail
network through relocations,
renovations and opening of new
sites (Porirua, New Plymouth,
Wellington City)
•Buy Right Cars has increased its
market share; unit sales up 9%

•Oxford Finance new consumer
lending up 23% to $52m
•Turners Finance origination fully
committed to Oxford Finance
from September 2018
•Good progress in repositioning
Oxford Finance to lower risk
lending
•Insurance claims loss ratios have
improved from 69% to 65%
•Securitisation warehouse funding
limit has been increased to
$200M
•Dialler technology has delivered
significant increase in outbound
activity, up 96%, leading to a 20%
increase in customer connects
•Increased resource in Australia
with objective to build EC Credit
Control corporate customer base

HY19 Interim Results Presentation
6
HY19 RESULTS SNAPSHOT
Year on year improvement in revenue and profit
Revenue $168.3m, +3%
Net Profit Before Tax $16.8m, +18%
Net Profit After Tax $12.9m, +28%
NPATA $13.7m, +26%
Shareholders’ Equity $217.3m as at 30 Sep 18
Q2 Dividend 4.0 cps Total HY Dividend 8.0cps
Earnings Per Share 15.19cps (HY18 13.36cps, +14%)

0
50
100
150
200
250
300
350
FY15FY16FY17FY18FY19
Millions

REVENUE
2H
1H
0
5
10
15
20
25
FY15FY16FY17FY18FY19
Millions

NET PROFIT AFTER TAX
2H
1H
NPATA – is net profit after tax and tax adjusted add back of amortised acquisition intangibles IE. Autosure portfolios
inforce and customer relationships

HY19 Interim Results Presentation
HY18: HY19 PROFIT BEFORE TAX BRIDGE
7
•Turners Group improvement in retail sales &
market share, however commercial business
soft
•Buy Right Cars impacted by old stock clearance
and reduced margins due to challenging import
market conditions (demand, stink bug and
Takata airbag recall.)
•Finance result materially impacted by
impairment in the MTF non-recourse channel
•Insurance result reflects improvements in
underlying business particularly in claims
management, and property profits ($3.4m)
•EC Credit down due to loss of key Australian
corporate client and reduction in unredeemed
voucher liability release

HY19 Interim Results Presentation
RECONCILIATION: NPBT TO UNDERLYING NPBT
8
•Property sale and lease back in line with
Turners’ property strategy

•Total “unredeemed voucher liability” for
ECCC stands at $1.7m as at 30 Sept 18

•Prior year revaluation of shareholding in
MTF shares to adjusted market value

•Prior year reduction in BRC earnout
consideration and interest payable based
on reduced profit achievement.
$000s HY19 HY18 Var
Underlying Operating Result 13,256 12,864 3%
Other Adjustments
Sale of 133 Roscommon Road 3,457 0
EC Voucher liability 84 241
Turners Group - MTF shares 0 589
BRC Earn out adjustment 0 550
Total 3,541 1,380
Profit before tax 16,797 14,244 18%

HY19 Interim Results Presentation
BALANCE SHEET
•Reduction in cash balances due to
investment of insurance reserves into longer
dated term deposits
•Growth in Finance Receivables resulting in
increased borrowing
•Inventory has grown from import purchase
brought forward
•Property, plant and equipment includes
acquisition of two development sites
•Insurance contract liabilities increase reflect
growth in Autosure policy sales
9
$000s HY19 HY18
Cash and cash equivalents
24,085 69,472
Financial assets at fair value
55,272 10,965
Finance Receivables
290,091 269,229
Inventory
42,877 42,143
Property, Plant and Equipment
35,122 23,736
Other Assets
39,903 35,300
Intangible Assets
170,843 171,527
TOTAL ASSETS
658,193 622,372
Borrowings
330,291 306,786
Other Payables
28,010 29,721
Deferred Tax
17,614 20,044
Insurance Contract Liabilities
49,920 46,749
Other Liabilities
15,011 18,336
TOTAL LIABILITIES
440,846 421,636

HY19 Interim Results Presentation
FUNDING MIX
10
Securitisati
on
Banking
Syndicate
MTF
Corporate
& Property
[incl Bond]
Inventory
BORROWINGS BY UTILISATION
As at 30 Sept 2018
•Banking syndicate (BNZ & ASB) established May 2018
•Securitisation funding facility limit extended to $200m November 2018
Borrowings
$Millions Limit Drawn Undrawn
Receivables – Securitisation (BNZ) 150 134 16
Receivables - Banking Syndicate (ASB/BNZ) 70 44 26
Receivables – MTF 70 55 15
Corporate & Property [incl Bond] 88 78 10
Inventory (ASB) 30 19 11
Totals 408 330 78

HY19 Interim Results Presentation
Auto Retail
Finance &
Insurance
Debt
Manageme
nt
HY19 REVENUE
HY19 SECTOR RESULTS
11
Auto Retail
Finance &
Insurance
Debt
Manageme
nt
HY19 OP PROFIT
Annual trends reflect acquisition vs
organic growth.

HY19 – focus on growth of existing
businesses after period of sustained
acquisition activity

Strong performance from Insurance,
offsetting headwinds in the second
hand vehicle market and repositioning
of finance portfolio towards lower risk,
higher quality lending

Balance between transactional income
from Auto Retail and annuity income
from Finance & Insurance.
0
5
10
15
20
25
HY16HY17HY18HY19
$M
SECTOR OPERATING PROFIT
0
50
100
150
200
HY16HY17HY18HY19
$M
REVENUE

HY19 Interim Results Presentation
AUTOMOTIVE RETAIL
Revenue 111.8m -1.5%, Op Profit $8.0m -8.6%
12
TURNERS GROUP
REVENUE $79.6M, DOWN 6%. OP PROFIT $7.5M, UP 1.4%

•Continuing increase in fixed price sales (cf auction or
tender) - up 3% YoY, with sales to end users at 68% of all
car purchases
•Owned fleet reduced to 48% from 50% in H1 FY18 due to
increase in consignment units.
•Damaged vehicle revenue up 9% in 1H19 off the back of
new agreements with insurance businesses to sell write-
off vehicles
•Continued expansion of physical footprint with benefits
to be delivered in second half (New Plymouth and
Wellington City)
•Redirect of Turners Finance into Oxford Finance, piloted
in July with full transition completed in September.
Wellington City Branch

HY19 Interim Results Presentation
13
Hamilton Buy Right Cars : The first Buy Right Cars site outside
of Auckland
BUY RIGHT CARS
REVENUE $32.2M, UP 11%. OP PROFIT $0.5M, DOWN 63%
•New branch opened in Hamilton in September...performing
above expectation.
•Gross margins per vehicle down 20% to $1,926 per vehicle
due to clearance of old stock and market conditions
•Focus on increasing the proportion of NZ New cars sold vs
imports (higher margin and quicker turn)
•Decrease in Average Days In Inventory to 152 days (1H18:
182 days)
•Finance penetration remains at market leading levels 45%
YTD
•Turn around taking longer than expected due to market
conditions
AUTOMOTIVE RETAIL
Revenue 111.8m -1.5%, Op Profit $8.0m -8.6%

HY19 Interim Results Presentation
AUTOMOTIVE RETAIL
EXPANSION & PROPERTY STRATEGY
•Opened three new sites at end of 1H19 – Hamilton BRC, Wellington City Turners, New Plymouth Turners in start
up phase
•Lease or buy options considered on merit
•Sold 133 Roscommon Road, Wiri to Argosy Property for $8.6M to provide funds to complete North Shore and
Whangarei developments
•Developing in-house expertise

14
Wellington City Turners Cars
New Plymouth Turners cars
Buy Right Cars Hamilton

HY19 Interim Results Presentation
FINANCE
Revenue 21.6m +21%, Op Profit $5.4m -2%
15
•Good progress on repositioning towards lower
risk borrowers through tightening of credit
policy with particular focus on affordability
assessments
•Total instalment arrears tracking at 2.6% (1.0%
at end-Sept 2017)
•Impairments on higher risk lending categories
has been worse than expected.
•Turners Finance loans redirected into Oxford
away from MTF new lending at $7.7m at end of
Sept
•Consumer lending through dealer channels up
23% to $52m.
0.00%
2.00%
4.00%
6.00%
8.00%
Oxford FinanceTurners FinanceMTF NR
Consumer Payment Arrears by Finance Book
Sep-17Sep-18
300
350
400
450
500
1H162H161H172H171H182H181H19
Average Customer VEDA
credit score

Improving Customer Credit Scores
Oxford FinanceMTF

HY19 Interim Results Presentation
INSURANCE
Revenue $25.7m +15%, Op Profit $6.4m +144%
16
•Improvements in loss ratios across all insurance products.
Combined loss ratio 65% (1H18: 69%)
•MBI loss ratio at 76% (1H18 at 78%)
•Re-pricing for risk has been extensively rolled out across the
network
•Investment income up 37% to $1.36m off the back of Turners
property strategy
•Project to rebuild core origination system has started and is
tracking well for delivery Q1 FY20, which will enable more
agile product design and delivery
•Focus on training and development helping to win new
originators
•Result includes gain on sale in property of $3m
Mechanical
Breakdown
Insurance
Asset
Protection
Payment
Protection
Extended
Warranty
Life
Net Written Premiums by Policy Type
First Half FY19

HY19 Interim Results Presentation
CREDIT MANAGEMENT
Revenue $9.3m – 9% Op Profit $3.1m -10%
17
•Continue to increase debt load from key NZ corporate accounts
at expense of competitors (debt load up 24%)
•Collections scorecard developed and being used with banking
customers
•Increased level of resource in Australia to lift corporate debt
load (under penetrated)
•Auto Dialler technology performing well and creating
significant lift in productivity (see chart)
•Result includes $0.1m unredeemed voucher release ($0.4M
FY18), we expect this to be the run rate level of release moving
forward
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
0
200000
400000
600000
800000
1000000
1200000
1H181H19
Number of Call Connects

Outbound calls

EC Credit Control Call Performance
Outbound CallsDebtor Connects
96% increase in outbound calls, leading to
a 20% increase in customer connects

HY19 Interim Results Presentation
2H19 OUTLOOK
•The business has shown some resilience through tough market conditions through Q1 and bounced back
strongly in Q2 and the diversified revenue streams have really demonstrated their value through the first
half of this year.
•However, market conditions, particularly in the used import market, remain challenging and pressure is
being placed on vehicle margins.
•Within the key market of Auckland we have seen a material reduction in demand which we attribute to the
cost pressures being experienced by many people across the Auckland region in fuel prices, rents, and other
household costs.
•A potential downside impact of 5 - 10% to forecasted pre-tax profits if current market conditions persist.
•Strong balance sheet position and share price dynamics result in Directors’ decision to undertake On-Market
Share Buyback programme of up to 5% of shares on issue.
•We expect the market to come back into demand and supply balance through 2019 with Turners very well
placed to participate in industry consolidation that will inevitably arise.
18

•AUTO RETAIL – lift finance attach rate through training
and development, establish new branches into operating
rhythm, managing inventory levels, complete property
projects, cost and sales volume focus.

•FINANCE – implement comprehensive credit reporting,
introduce automated tools for affordability assessments,
continue shift towards lower risk lending

•INSURANCE – continue re-pricing for risk, replace retail
policy selling system, run claims as efficiently as possible,
continue investment in dealer upskilling

•CREDIT MANAGEMENT – corporate customer acquisition
Australia, utilise collections scorecard, target higher debt
load from existing SME customers
19
KEY FOCUS FOR 2H19
•AUTO RETAIL – develop and extend retail footprint,
deliver better digital and mobile customer experience,
building data tools to understand demand, develop new
sourcing opportunities

•FINANCE – Extend distribution through use of APIs and
partnerships, grow direct lending, further automate the
credit decision process

•INSURANCE – increase distribution, launch new products
and deliver on retail system development, optimise
repair network
deliver on policy renewal opportunity
•CREDIT MANAGEMENT – Australian corporate customer
acquisition, MYOB / XERO integration, further enhance
collections scorecard
KEY FOCUS FOR FY20

HY19 Interim Results Presentation
Contact:

Todd Hunter
CEO Turners Limited
T: 64 21 722 818
E: todd.hunter@turners.co.nz
20

HY19 Interim Results Presentation
DISCLAIMER
Turners Automotive Group the (company) is solely responsible for the content of this document. This document is not an investment
statement or prospectus and does not constitute an offer of securities.
This document or any other written or oral statements made by, or on behalf of, the company may include forward-looking statements that
reflect the company’s current views with respect to future events and financial performance. These forward-looking statements are subject to
uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors
include, but are not limited to:
I.Uncertainties relating to government and regulatory policies;
II.The occurrence of catastrophic events with a frequency or severity exceeding our estimates;
III.The legal environment;
IV.Loss of services of any of the company’s officers;
V.General economic conditions; and
VI.The competitive environment in which the company, its subsidiaries and its customers operate; and other risks inherent in the company’s
industry
The words “believe,” “anticipate,” “investment,” “plan,” “estimate,” “expect,” “intend,” “will likely result,” or “will continue” and other
similar expressions identify forward-looking statements. Recipients of this document are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. The company undertakes no obligation to update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise.

21