Turners Annual Meeting

TURNERS LIMITED ANNUAL MEETING
CHAIR’S PRESENTATION
9
th
September 2021


Play video welcome from Tina

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That’s a hard act to follow. Welcome everyone and thanks for joining us at
the 2021 annual meeting of shareholders of Turners Automotive Group.
My name is Grant Baker and I’m the Chairman of Turners.
The Notice of Meeting and 2021 Annual Report and financial statements
have been circulated and made available to shareholders. Today’s meeting
is being held online via the Computershare Online Meetings platform. This
allows Shareholders, Proxies and Guests to attend the meeting virtually. All
attendees can watch a live webcast of the meeting and read the company
documents associated with the meeting. In addition, shareholders and
proxies have the ability to ask questions and submit votes.
I would like to introduce my fellow directors - Paul Byrnes our deputy chair,
Matthew Harrison, Alistair Petrie, John Roberts, and Antony Vriens. Martin
Berry is streaming live from Singapore via Zoom and is participating fully in
the meeting today.
Also with us online today are Todd Hunter, our Group CEO and Aaron
Saunders, the company’s Group CFO.

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There will also be a number of our senior managers and staff online today.
Welcome to you all.
Also in attendance today are the company’s auditors, Staples Rodway, as
well as our legal advisors Chapman Tripp, and other advisors.
Thanks to all these firms that provide valuable services to Turners.

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We were looking forward to the opportunity to meet shareholders in
person, and to share our plans and our enthusiasm for the future of the
business. However, like many situations we have faced in the last 18
months we have had to adapt, and this meeting having to be postponed
from August and shifted online is yet another reflection of that.
If you have a question to submit during the live meeting, please select the
Q&A tab on the right half of your screen anytime. Type your question into
the field and press send. Your question will be immediately submitted.
Should you require any assistance, you can type your query and one of the
Computershare team will assist with the chat function and reply to your
query. Alternatively, you can call Computershare on 0800-650-034.
Please note that while you can submit questions from now on, I will not
address them until the relevant time in the meeting. Please also note that
your questions may be moderated or if we receive multiple questions on
one topic, amalgamated together. Finally, due to time constraints we may
run out of time to answer all your questions. If this happens, we will answer
them in due course via email. Accordingly, I encourage you to get in early,
to ensure that your question gets answered at the end.

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Voting today will be conducted by way of a poll on all items of business. In
order to provide you with enough time to vote, I will shortly open the
voting for all resolutions.


At that time, if you are eligible to vote at this meeting, you will be able to
cast your vote under the Vote tab. Once the voting has opened, the
resolutions will allow votes to be submitted. To vote, simply select your
voting direction from the options shown on screen. You can vote for all
resolutions at once or by each resolution. Your vote has been cast when
the tick appears. To change your vote, simply select ‘Change Your Vote’.
You have the ability to change your vote, up until the time I declare voting
closed.
I now declare voting open on all items of business. The resolutions will
now be open in the vote tab, please submit your votes at any time. I will
give you a warning before I move to close voting.

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Today you will hear from me first and then an update from Todd Hunter.
Then we’ll deal with the resolutions, where voting will be conducted by
way of a poll on all items of business.
Following the presentations, there will be an opportunity for discussion
and any questions you may have.
We’ll answer questions on the resolutions at the time they are proposed,
and there will be a further opportunity at the end of the meeting for you
to ask any other general questions about the company and our
operations.

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Firstly, let me give you some comments on the year just gone and how
we’re positioned as a company. Obviously 2020 was a year unlike any other
- but I couldn’t be more pleased about the shape the business is in, the
trajectory we’re on and the future for the Turners business.

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Reflecting on the last 12 months, our team has responded incredibly well
to the pandemic challenges presented through the year. Their high levels
of engagement combined with the diversified nature of the business
ensured we were well positioned as we moved out of the lockdown.
We’ve continued to focus on building our digital capability, optimising our
retail network and customer experience and continued to grow high
quality lending.
Our growth plans are being realised and the work we’ve been doing over
the last 3 years is getting serious traction.

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Quality, Growth and Yield are the key themes I wanted to drill into a little
with you today. Let’s start with Quality.

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As a group, we’ve continued to focus on quality. We know the great
trusted brands we have in our stable.
Quality customer experiences are leading to improvement in earnings
quality and consistency. We continue to extend our competitive
advantage through digital initiatives, and we know that improving the
quality of the work environment for our people will be critical in helping
deliver quality experiences for our customers, as well as returns for our
shareholders.

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We have some serious momentum in this business. We had already signs
of this step change in late FY20 but the March 2020 lockdown put a
temporary halt on this. But the halt didn’t last long. We achieved a step
change in performance over FY21 with a 19% uplift in underlying profits.
Then, prior to lockdown in mid-August, YTD FY22 has seen monthly
operating results tracking comfortably ahead of run rate profit levels in the
second half of FY21.

Given the lift in performance in the first 4 months of the financial year we
were well on track to achieving at least a 15% uplift in profits for FY22.
However, our short-term performance will now be impacted by the level
and duration of Covid-19 restrictions on trading. It is good to see our
branches outside of Auckland now returning to Level 2 restrictions, and we
are hopeful we will see Auckland move down levels in the next few weeks.
Our nationwide geographic diversification is helpful at the moment, as it
was in previous Auckland-centric lockdowns.

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What I do want to be clear about is that this latest lockdown doesn’t
change our medium-term view on the prospects for Turners. At the annual
results announcement in May, we put out a marker for our 3 year growth
plans. We aim to deliver a further 31% growth in underlying profits to $45m
profit before tax in FY24. If anything, we feel even more confident on this
medium-term target given how the businesses performed heading into this
lockdown.



Our performance and sustainability of profits is being reflected in our
growing dividend stream.
We declared a final dividend of 6.0 cents per share - slightly above our
published guidance, which resulted in a record pay out for shareholders in
FY21 of 20 cents per share.
We intend to maintain our current dividend policy – 60% to 70% of NPAT –
in the year ahead to ensure the business is being supported in funding its
growth opportunities.

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Based on last year’s dividend of 20 cents per share and a share price of
$4.50 this produces an attractive gross yield of 6.2%. This is a major
attraction for shareholders and personally for me as well.



I thought it might be useful for other shareholders and prospective
shareholders to understand why I believe in the company so much. I
recently increased my holding and now own over 7% of the shares in
Turners. I enjoy being involved in this business and plan on continuing as a
long term holder.

I love the yield we are generating through dividends, and the fact we pay
these out quarterly is a real positive. There is significant growth
opportunity across all our businesses but particularly within Auto retail and
the Finance business.

With the growth we have experienced in finance and insurance our
earnings consistency has really improved over the last few years.

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We’re also creating some significant value in our property portfolio which
currently sits off balance sheet. Todd will go into this further but we have
conservatively another $14m in unrealised property gains and more to
come as we make further investments.

This business is extremely well run. The culture is very positive, and at all
levels of the organisation we see committed and engaged people. I know
this is something Todd focuses on right across the business.

The business is well positioned from a competitive perspective and our
strategic focus is designed to make these advantages grow bigger.

Our brand strength is a massive asset. Turners stands for trust in a market
that is known for mis-trust.

We are the biggest buyer and seller of cars in NZ. Our network reach is un-
rivalled which gives us economies of scale and an ability to be closer to our
customers.

Our business is diversified in terms of earnings, geography and for vehicle
sourcing. We’ve also made significant investment to ensure we have agility
within our finance and insurance systems. This means we can react and
take advantage of opportunities quicker than our competitors.

We are going to continue to invest heavily in digital.

And we’re a big player in highly fragmented market which means we have
the means to do things others can’t, particularly in the data and digital
space.

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It is important to reflect and remind ourselves what has happened with the
previous lockdowns over the last 18 months. We have built a resilient
business group that is robust even in difficult market circumstances. We
also know that once these restrictions ease up that customers return to
normal very quickly.
We know the used car market is resilient with around one-quarter of the
cars in NZ turning over each year, and hundreds of thousands of cars
needing to be replaced in the coming years.
Our business has geographical resilience...no more highlighted than the
exact situation we find ourselves in today. Also our higher level of annuity
earnings helps mitigate some of the short term interruptions in vehicle
sales due to COVID level restrictions. This reduces risk, and also provides
stability in terms of earnings and dividends.
Our high trust brands resonate with consumers, particularly in times of
uncertainty.

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Digital investment will continue to be a competitive advantage and we
know there is lots more we can do in the future to drive that advantage
home.
Lastly we have a strong balance sheet and the business is well funded and
well supported by our banks ASB and BNZ.

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We reached an inflection point mid-way through FY20 and since then we
have seen a step change in the business. The key strategic investments,
initiatives and changes that have been completed over the last 3 years are
delivering.

We’re very happy with the momentum and the plan and feel very confident
there is much more to come. Todd shared the FY24 plan at the Annual
Results presentation in May. We felt it was important to give some insight
to shareholders how we were thinking about the growth trajectory
internally and which divisions the growth will come from.

Based on our plans and the results we’re seeing we are very confident that
in less than 3 years we’ll see Profit before Tax of $45m, and a dividend
payout of around 24cps based on current dividend policy. The team are
very focused and driven around achieving this goal.

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Of course I do have some aspirational goals of my own. About 5 years ago
I went to a management meeting and one of the guys asked me what my
goals were for the company. I always like to set ambitious goals so my off
the cuff reply was I want three things starting with a five.

A $5 share price
$50m profit before tax
Break into the NZX 50

Obviously we’re not there yet. But we’re pushing!

In closing may I thank shareholders for your ongoing support and interest
in the company.
We are well-advanced in growing a high-quality business with reliable and
diversified earnings, capable of success through the cycle.
We are confident in our growth plans and are already seeing significant
traction from the investments and initiatives we have put in place.
Our improving business performance will enable us to continue to deliver
a growing and sustainable yield to shareholders.
Before I hand over to our CEO Todd Hunter to review operations and
strategy for each business unit in more detail let’s have a quick look at the
latest brand advertisement from Tina...

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[MOVE TO CEO PRESENTATION]

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[.. THEN CHAIRMAN RESUMES CONTROL OF THE MEETING]

I will be checking with the question moderator if there are any questions
on the resolutions as we come to them.
In the meantime, are there any questions on the presentation or results?
[Questions]
OK with that, I’ll move onto the formal part of the meeting.

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I would now like to move to the resolutions before the meeting.
These were notified in the Notice of Meeting and explanatory notes have
been provided.
Only shareholders, proxy holders or corporate representatives of a
shareholder may vote on today’s resolutions.
There are four Resolutions before the meeting today:
RESOLUTION 1: That Baker Tilly Staples Rodway be reappointed as auditors
of the Company and that the Directors be authorised to fix the auditors’
remuneration.
RESOLUTION 2: That Paul Byrnes, who retires by rotation and has offered
himself for re-election, be re-elected as a Director of the Company until 18
February 2022.
RESOLUTION 3: That Martin Berry, who retires by rotation and has offered
himself for re-election, be re-elected as a Director of the Company.

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RESOLUTION 4: That Antony Vriens, who retires by rotation and has offered
himself for re-election, be re-elected as a Director of the Company.
We believe that having Directors with relevant industry, commercial and
governance skills is essential for the continuing success of the Turners’
group. Diversity of thought in particular and broader commercial acumen,
are also taken into consideration by the Board when reviewing Board
membership.
We currently have Directors with hands on experience in the finance,
insurance and debt management sectors as well as Directors with expertise
in governance and very diverse experience and entrepreneurial skills in
sales, marketing and business growth.
Before handing over to Paul I did want to say a few words about Paul’s
contribution to the company, given he will be stepping down from the
board in February 2022. Paul joined the board in February 2004 – almost
18 years ago and he’s had a huge influence on the company during that
time. Paul is a highly skilled director with broad business experience. He
has experience as a director in other companies, experience in chief
executive roles as well as managing his own private investments. He’s also
a chartered accountant by profession.
There have been a few highs and lows over those 18 years. The company
had a very difficult time after the GFC. We were losing money and even
lost our CEO. Paul stepped into the breach as acting CEO and ended up
staying in the role for 8 years until we appointed Todd. Those were very
tough times and without Paul at the helm we may have well not have got
through.
Paul also led or was involved in a number of acquisitions including the
Turners Auctions business and the Oxford Finance business, as well as
Autosure Insurance – all of which have turned out to be fantastic buys and
are the foundation of the business you see today.

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Some of the acquisitions were quite complex with some creativity required
to get the transaction over the line.
At board level Paul has always been extremely thorough and well prepared
and been an integral part of our growth story. As a board we do have some
robust discussion from time to time - and Paul is often at the forefront of
those discussions. He does have strong views but they are always well
thought out and always help get us to the right answer. At a personal level
I have a great deal of respect for what Paul has achieved in his business
career and contributed to the company, and wish him all the best with
whatever he chooses for his future.
I will invite Paul Byrnes, Martin Berry and Antony Vriens to speak to the
meeting in support of their re-election. If you have any questions in regard
to the resolutions, please send them now.
Let’s start with Paul and then move to Martin and Antony.
[TAKE QUESTIONS ETC AS APPROPRIATE]

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Moving onto the proxy votes. Many shareholders, who are not attending
this meeting have voted by proxy.
I wish to advise that proxies have been received for 25.71% of total shares
on issue.
Ladies and gentlemen that concludes our discussion on the items of
business.
In a couple of minutes, I will close the voting system. Please ensure that
you have cast your vote on all resolutions. I will now pause to allow you
time to finalise those votes.
In the meantime, let me check if there are any final questions that we can
deal with while we are waiting for the final minutes of voting.
[WAIT FOR 60 SECONDS IF THERE ARE NO QUESTIONS]
Voting is now closed.
The results of today’s voting will be posted to the NZX as soon as possible.

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Ladies and gentlemen that concludes our discussion on the items of
business.


That brings the formal part of the meeting to a close.
I therefore call the 2021 annual meeting of shareholders closed.
Thank you all for your attendance today and most importantly, your
ongoing support. We very much value our loyal shareholder base and
welcome your feedback.
Thank you again for your patience in participating in an online meeting.
I hope it is not too long before we can once again meet face-to-face and
share some refreshments.
In the meantime, we will continue to work hard to ensure your Company
continues to grow and prosper and as we discussed we are very confident
about our future trajectory.
ENDS

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TURNERS LIMITED ANNUAL MEETING
CEO’S PRESENTATION
9 September 2021


Thank you Grant, and may I start by thanking the Board and all the Directors, on
behalf of the Turners Auto Group team, for their support and guidance through the
last 12 months.
And on behalf of the wider Turners team, thank you to each of you for being with us
online today, and for continuing to show interest and care about the company. We
are delighted by the loyalty of our investor base, and we will continue to strive to
reward that loyalty with improving outcomes, including dividends.
Today I’m going to spend a small amount of time looking back on the FY20 year, give
you a quick overview of the car market in NZ, and a few comments on how each
business unit is going so far in the FY22 year, including the impact of the current
lockdown. I will then finish up with a discussion on our 3 year roadmap and how we’re
tracking toward that.

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Looking back quickly at FY21 results. We announced this to the market back in May,
so I won’t dwell on the historic outcomes.
Suffice to say, we had a step change in our business performance in FY21. This
included a 19% increase in underlying profit before tax. This is a result of many of
the changes we made over the last 2-3 years that are now really starting to get
traction. Although a disrupted operating period saw FY21 revenue down 11% to
$296m, a strong response from the business, including acceleration of its digital
strategy and rigorous cost management saw three of our four segments lift profit
strongly. Only Credit was down on last year’s result and that was because of an
unusual situation where a number of our corporate and bank customers were
reluctant to pursue debt aggressively over the Covid-19 period.
Demonstrating the benefits of the Group’s diversified annuity businesses, profit rose
50% in Insurance, 30% in Finance and 11% in Automotive Retail. All of this helped to
contribute to a strong and sustainable yield.
I think our team has responded incredibly well to the challenges brought on by the
pandemic. Their high levels of engagement combined with the diversified nature of
the business ensured we were well positioned to navigate the various national and
regional lockdowns. As a group, we have continued to build quality customer

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experiences, improving the quality of the work environment for our people, which in
turn will deliver quality returns for our shareholders.
Our growth plans are working and our confidence in our longer-term plan is only
growing.
Pleasingly, FY22 has started positively and we have continued to see another step
change in the business performance run rate prior to the latest lockdown.

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Firstly, in regard to the short-term. We now have the August market transaction
numbers and as expected there has been a short-term impact on transaction
numbers from the lockdown. Last year’s experience will tell us we can also expect a
bounce back in transaction levels once normal operating conditions return. It’s still
too early to have a firm view of how this halt followed by acceleration will have on
our business. However, we are more confident than we were during the first
lockdown on how this will play out. And we will update you further when we
announce HY results in November.
Secondly, on the medium terms, as many of you will have read about or possibly
experienced first hand, there are significant delays being experienced in the supply
of new cars. This is mostly due to the unusually high demand for micro-chips. Based
on our conversations with new car manufacturers, we now expect this shortage to
continue to impact the market for at least another couple of years.
Because less new cars are being sold internationally, vehicles are difficult to buy in
Japan, which means there are less used imports coming into New Zealand. As a
reminder, we are much less exposed to this shortage than most of our competitors,
with less than 10% of our vehicles coming from overseas.
This overall reduction in supply has led to used car prices increasing over the last 12
months probably somewhere in the 10-15% range. The price rises are more

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pronounced in specific makes and models, such as utes (incidentally, we have
certainly observed the impact of the 2020-2021 construction boom!)
With more regulation now coming into effect from the government we would
expect used car prices to hold at this level or potentially even increase further.
Also the difficulty in sourcing stock means around 10% of dealers have left the
market over the last 2 years.
Finally, to give you a sense on volume, at the end of August 2021 YTD used car
transactions are tracking around 10% below the same period in 2019.
Let’s move onto the business units.

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In Auto Retail our strategy of focusing on the purchasing capability of our business,
optimising our network of sites, and enhancing our digital presence, is delivering
gains in both margin and market share.
Auto Retail also drives synergies amongst our other business units. Each month we
are lending more of Oxford’s money to Turners customers, and our new Turners
brand campaign is attracting new buyers and sellers to the business.
Our customer data platform is complete and we now have over half a million
contact points for customers. This is leading to much more relevant and timely
communications with customers and is ultimately helping us drive our conversion
numbers up in both buying cars and selling cars.

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We feel we have the winning formula for market share and margin growth in the
Auto Retail business. If we source vehicles smartly, provide quality digital and
physical networks, this will deliver great experiences and outcomes for our
customers.
We continue to be very focused on improving our sourcing. We source over 90% of
our vehicles locally which means we don’t have the exposure to the volatility in the
Japanese used car supply chain. The initiatives we have put in place using data,
extensive training and the use of diagnostic tools means our purchasing is
improving.
We are investing in both our physical network and our digital network. It is not an
either or situation. Firstly, on our physical network. We are already seeing significant
benefit from exiting the large wholesale auction site in Penrose, Auckland and
moving into smaller retail-optimised sites like Westgate.

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The two property projects we have underway are Rotorua and Nelson. Rotorua is
now in our possession and we are on track for our phased opening as we redevelop
and “Turnerise” the main building on site. Phase 1 opening will be in the next 2
weeks or so with the full redevelopment to happen over the next 6-9 months. We
have used this phased playbook before and it allows us to realise contribution from
the site more rapidly, whilst steadily building momentum over a 12 month period.

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This is the concept drawing of what it will look like. As you can see we are partial to
the colour blue!


The Nelson site development also remains on track. Demolition work has now been
completed and design and consents are being finalised. We expect this branch to be
operating in Q1 of FY23.

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We now own 9 sites across our network of 27 auto retail branches. One thing we
haven’t talked a lot about till now is the unrealised gains we are accruing on this
portfolio. These are all held on balance sheet at cost and even with some very
conservative valuations we have around $14m in unrealised gains so far. We are
always working on our funnel of property opportunities and have another 3
property deals in the pipeline that haven’t concluded but are well advanced. These
either relate to new sites or larger sites in existing locations and we look forward to
updating you on progress in due course.

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In terms of our digital networks, I am really pleased with the progress we have made
and the traction we are getting with customers, which is driving business outcomes.
We now have in place the leading omni-channel experience for buying and selling
cars in New Zealand. This means customers can choose how and where they want to
purchase.
Whether that is in-person at one of our branches or buying a car completely online
from woe to go. Once they do come into the branch we already have their data and
are able to really customise and speed up their whole buying experience. We have
had over 13,500 test drives booked online in the first 6 months of 2021 and over
300,000 vehicles saved to customers watch lists. More and more of our customers’
journeys are being enhanced by our digital platform.

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As you can see on this slide, we have an enormous amount of data in the Turners
Auto Group ecosystem. This includes the largest transaction data set for car sales in
NZ. Whether that is vehicle-related data from diagnostic scanning, the number of
cars we value each year, or over 1.5m vehicle images we take annually...we are
building up enormous pools of data that will enable us to keep sharpening up our
vehicle purchasing decisions. Every day, we also have material numbers of digital
interactions through all parts of the customer journey...we are getting great
feedback on what works and what doesn’t work.
Overall, digital is becoming an intrinsic part of how we operate. But the key for
market-leading digital platforms is to not rest on your laurels. That’s why we’ve
increasing our investment into digital every year. Strategically, we see digital as one
of our most important competitive advantages and we continue to double-down our
investments, knowing that our competitors cannot and simply are not keeping pace.

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We launched our Turners Subscription offering in October last year. This is an
alternative to owning the car outright. Customers pay a monthly subscription for
exclusive access to the car, this includes insurance, rego, WoF etc. The customer
only needs to pay the subscription fee and of course when they fuel up at the
service station or at the power point in the case of an EV. We currently have around
80 vehicles out on subscription, of which around 40% of these vehicles are EVs. We
think there is a nice fit with EVs and the subscription offering. Subscription provides
a low risk and low-cost way for customers to “try before you buy”. Also many of the
older lower drive range EVs can be priced at a level that makes EVs more accessible
to more people. We are looking to increase our EV fleet within Subscription as we
do see a role for Turners to assist in getting more Kiwis behind the wheel of an EV.
Accordingly, the subscription model is the key pillar of the Environmental part of our
ESG strategy

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The Finance business continues to perform exceptionally well and is our most
improved business over the last three years.
New lending is growing off the back of our market share wins. Arrears continue to
drop off the back of our focus on the premium borrower segment of the market.
Consistent with our Digital investment in Auto Retail, we continue to improve our
reporting and data analytics and as a result, we have never had more transparency
and control over risk and pricing.

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We showed this graph at the annual results presentation in May and we have
updated it to June. Two things stand out: 1) how much of our lending is in our
premium lending tier, and 2) the step change increase we’ve achieved in lending
volumes thus far in FY22.

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Arrears continues to track down as the increased quality of the loan book takes
hold. This is a structural change and thus will result in an ongoing benefit to the
business relative to the counterfactual. The cause of this change is the introduction
in premium lending that I showed you in the previous slide. Accordingly, we expect
arrears to continue to decrease going forward as premium continues to increase as
a % of our total loans.
You can see in the two horizontal lines the performance of newer loans written
since we introduced premium lending in August 2019. The yellow horizontal line are
arrears from loans sourced from third party dealers and the blue horizontal line
being loans from Turners Auto customers. Thus, the top line should continue to
track down going forwards, assuming relatively stable economic conditions.

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Our Insurance business has seen continued wins in market share in the early part of
FY22 resulting in a positive lift in Gross Written Premiums. You can this from the red
line on the top graph.
We are experiencing some spare parts price inflation and delays in vehicle repairs
due to shipping timeframes, however this is being offset by the improvements we
have made in our risk pricing.
Finally, our focus remains on distribution and we now have a number of API
integrations with finance partners in particular. These will deliver an increase in
customer acquisition opportunities over coming years.

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The Credit Management business continues to be challenged by market wide low
default rates and also lockdowns in Australia. Debt load is up on the same period
last year but is still below historic levels. We continue to work closely with referrers
to manage and improve customer outcomes as we operate in an environment
where bad debts are likely to increase and debt collection services will see
increasing demand.

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Moving onto our short term and medium term plans and goals.

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Nothing has changed in terms of the priorities we communicated back in May. If
anything our conviction levels have increased based on the traction, we have seen in
trading pre-lockdown.
On this slide, we have three to four priorities for each business. But I just want to
zoom in for now on the top priority within each business:
- In Auto Retail stock acquisition is the single most important area of investment.
Strategically this is where our competitive moat is becoming even wider
- In Finance simplifying and automating as much of our lending process to ensure
fast turnaround on credit decisions will be priority #1.
- In Insurance continuing to expand our distribution is the top of the work stream
list.
- And in Credit Management investing in data initiatives to improve contact rates
will be the most important area to work on.

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In May, we made the decision to publish our 3-year target and growth plan. This was
possible due to the level of confidence we have in the structural improvements that
we have made to build quality in the business. We've made a number of changes
over the last 2-3 years where we're already seeing major benefits.
We believe we have found the right formula, and more importantly, we will
continue to further optimise these known levers in the future:
1. Retail optimisation: We will continue to optimise our property footprint and
customer experience for our retail consumer. More retail sales improve both our
margin per transaction and also our market share.
2. Vehicle purchasing: We are continuing to improve our decision-making for
buying cars. Like any retail business, we make our money when we buy, so we’ve
invested in market leading diagnostic tools and data tools such as artificial
intelligence to improve the % of vehicles where we make profit
3. Digital: We are continuing to invest in digital initiatives and in particular
enhancing our omni-channel customer experiences. This will further expand our
competitive advantage in this space.
4. Risk pricing: We will continue to refine our risk pricing models in finance and
insurance using data insights that are both proprietary and third party.

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Within 3 years we are targeting Profit before Tax of $45m. Using our existing dividend
policy this equates to a dividend payout of around 24cps. Naturally, our future
performance also depends on many variables outside our control. Covid is a pertinent
reminder that the unexpected can happen. Nevertheless, we believe it’s helpful to
put a stake in the ground which enables investors to judge the progress of our
strategy.
The Turners business and in particular the Auto Retail and Credit Management
businesses are highly cash generative which gives us the opportunity to reinvest to
deliver organic growth and yield for our shareholders.
The focus areas for growth will be Auto Retail and Finance with retail optimisation
helping to deliver margin expansion and market share growth and Finance growth will
come from distribution expansion and direct lending.
We are confident that if we deliver the growth the combination of higher earnings
and an expanded valuation multiple should better reflect the value we are delivering
for shareholders and the quality of the company we are building.

24

We think it is important to be clear with shareholders on how we think about
allocating capital in the business for these growth plans. We have received very
clear messages from existing shareholders that they want to see both yield and
growth, but growth supported from the existing capital base.
Our focus is on organic growth, which will be funded out of retained earnings and
initiatives to make ourselves more capital efficient. The business continues to be
well funded, and conservatively geared. We have significant headroom of $55m+ in
our funding facilities. Also as a reminder, 80% of our borrowings relates to the
finance company ... and of course debt-funding is essentially just the inventory of
any finance business.
Capital allocation will be broadly prioritised across the following categories:
* Auto Retail businesses – footprint expansion can be funded largely through debt
(lease premises and floorplan finance for inventory), some capital investment
required for fit-out of retail sites.
* Property – largely mortgage funded, de-risks the auto business through control of
strategic sites and cost base plus provides opportunity for long term capital growth.
* Oxford Finance – growth requires capital alongside debt to grow receivables
ledger and profits.

25
* Digital initiatives across the Group. Largely assumed to be opex, supported by
some capital to be allocated to support growth and future proofing.

26


The focus of our ESG strategy in FY21 has focused mostly on the social aspect with
the obvious focus on our customers and staff safety and welfare during the height of
the pandemic. This key focus has continued over this latest lock down.
We have implemented Peakon during the year, an excellent employee engagement
survey, which gives our people a regular opportunity to give us their feedback and
gives us great information on a whole range of topics. In the chart on this slide, you
will see the positive improvement in our scores since launch. We are really pleased
with the high levels of engagement right across the business.
We are also doing a lot in the current business to help old and end of life cars off the
road.
Finally, as I previously detailed, with Turners Subscription we now have a platform
by which we can increase our electric vehicle fleet over the next 6 months and thus
do our bit to speed up EV adoption in New Zealand.

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YTD FY22: The first 4 months of trading in FY22 has seen a continuation of our positive
momentum over the last couple of years. Prior to the lock down in August we were
tracking comfortably ahead of the comparative periods for both FY20 and FY21.
In all the auto related businesses we have seen market share gains and yield
improvements. Based on the momentum we were experiencing prior to August we
were easily on track to delivering a 15% uplift in profits for FY22.
Obviously the Covid restrictions have a short-term impact, particularly on our Auto
Retail Division. Given the uncertainty around the L4 lock down period in Auckland,
and the impact of a more restrictive L2 in the rest of the country we will update the
market with more specific FY22 guidance at our half year results in November.
FY24 Target: Putting this short-term impact aside, our pre-lock down YTD
performance and trajectory over the last two years gives us strong conviction levels
around our strategy and results. In relation to our 3 year goal we are well on track to
exceeding our target of $45m PBT in FY24.

28
Before we finish, I would like to acknowledge the efforts of our team, from our Board
of Directors through to the operational teams who deliver day in day out for our
customers and for our shareholders. This group of people have been totally
committed, and prepared to go above and beyond, even in the disruptive Covid-
impacted periods. This really is a great group of people to be involved with. I feel very
proud to be part of such a passionate and dedicated group of people.
Thank you for your attention this morning, and
and before I hand back to Grant we will show you a sneak preview of the next Tina
instalment...



ENDS