Todd Hunter (Group CEO): Good morning, everyone. My name is Todd Hunter, Group CEO for Turners Automotive Group, got Aaron Saunders beside me, our Group CFO.

We'll crack into things given it's 10:30. [cough] We'll try and rip through these slides reasonably quickly and get to the Q&A, which I know is the is the part that you all want to get to.

Let's crack into things. I want to sort of start with the big picture, and I suppose these would be the key messages that I'd like you all to take away with.

Obviously, we're super proud of the another record year for Turners, delivered in what has been, pretty challenging circumstances. The key point I want to reinforce from the outset is that, yeah, our diversified model has proven to be resilient through the cycle, and I think we're going to get an opportunity to prove that yet again.

We're certainly entering FY 2027 very well-positioned and well-funded for the next phase of growth. Probably just a couple of other things, that we have stayed on the front foot of our expansion plans, continuing to build the platform, not just protect the base.

As we've sort of as we've indicated through the pack, we've seen conditions soften into late March and April. We we had a record Q Q4 or or actually a record quarterly performance for profit for the group in Q4, but that softening kind of occurred sort of late March and and and into April.

What we've done is is really just redeployed the same playbook, the same battle-tested playbook that we have used in 2024 and 2025. We're in we're in good shape.

Just going to flick through a couple of slides here and really just get to I want to just pause on culture and engagement quickly. We continue to include this slide so shareholders can see how seriously we take this aspect of our KPIs.

Employee engagement remains very strong, and we have meaningful skin in the game through the employee share scheme that we run. The business continues to develop our leadership people in internally, as well.

That matters because execution is the difference between average and excellent, and particularly in a multi-divisional business like Turners, and particularly in a very distributed business like Turners, we rely on our people to do a great job for our customers and execute well. That's why we give this the focus we do.

Turning now to the to the results. These are all sort of well laid out, I won't spend any time here.

Just getting on to the revenue bridge. Auto retail revenue increased as we sold a much higher proportion of owned vehicles, we had a reduction in our consigned vehicles, but we more sort of made up for that by purchasing more vehicles.

The commercial revenue strengthened as that as that economy proved improved through FY 2026. Finance revenues have increased off the significant growth that we've had in the loan book, and insurance revenue has increased off improved policy sales.

The slight negative is that credit management revenues decreased due to the low debt load largely driven by system projects within the large large referrer client base. Overall, yeah, good increase in revenues from $414 million to 451.

On the net profit bridge, auto retail profit reflects those the sort of new branches, that high proportion of owned vehicles, and and improving gross margins. It's certainly worth noting, as you can see later on, that the second half was much much stronger than the first half as confidence improved.

Finance, yeah, benefited from disciplined credit quality, lower arrears, and strong growth in the loan book. Insurance con- continued to refine our risk pricing and growth in that direct-to-consumer channel in particular.

Credit management, lower debt load has led to lower commissions. The dividend remains a core feature of the Turners proposition.

We've declared a final dividend of 9 cents per share, taking the full year to 33 cents, which is 14% up on last year. Our message is simple here: we aim to provide shareholders with a reliable and growing cash return, while retain- retaining enough capital to fund to fund our growth.

Really just a few things to call out here. Inventory's up.

That sort of reflects a a real focus we had on building supply in that sort of second half of the year, so that began before Christmas and led into into Q4. We were really focusing on our conversion rates here to support that improving demand that we were seeing.

Then, yeah, obviously, the finance receivables up. Then property, plant, and equipment have increased due to the developments that we've bought on stream over over the last 12 months.

Then just noting the intangible asset down, which is due to the EC Credit Control goodwill write-down of $7.5 million. I think funding is an area that's been a key focus area for Aaron, and he's him and, well, he and his team have done a lot of great work work here over the last year, and I think positioned us really, really well.

During the year, we've turned out our $200 million securitization warehouse in our first public transaction. It's huge success.

We've also extended our syndicated banking facilities sub- post post our year-end, but again, another significant sort of step forward in terms of the way we're funding this business, it's increased our capacity and reduced our costs. I think the warehouse term-out and the extension of the syndicated banking facilities are a real sign of confidence from our funders, and ultimately, reflect very positively on the on the risk profile that these funders attribute to our business.

I think it's a, yeah, it's a really a really big tick from from from the funders, which is great. We'll move on to the segment results now.

Auto retail revenue up 10%, profits up 12%. Market conditions very challenging in that first half, but improved in the second half.

We've given our sourcing initiatives a huge amount of focus, as you as you would have heard from us previously, certainly around the way we've been managing stock and and being disciplined around stock management, has really set us up very well for that performance in the second half of the year. Our focus remaining going forward remains on pricing optimization, disciplined discounting, and ensuring we we keep stock turning at the right speed.

Our competitive edge remains around our strong brand. Tina campaign continues to work very well for us.

Being agile around our sourcing and repositioning stock quickly to where demand in the market is, and delivering that all as efficiently as possible. We still are focused, closely around the costs that we're incurring right across the business.

Strategically, our biggest opportunity absolutely remains expanding that branch network, and we've kept momentum up momentum up there despite the kind of backdrop. Used car market sort of slow signs of recovery, used car change of ownerships up 3% in FY 2026.

Whilst used import registrations were down 7% last year, we've seen some changes from the government in terms of the relaxation of the Clean Car Standards, and certainly strong demand for small hybrids as we as we've kind of got into this whole Middle East conflict period. We've seen quite a strong increase in imports coming into the country in April, which was which was good to see.

We're big believers in disciplined stock management, and that is one of the keys to consistently, strong margins. There are times where we go through pricing transitions, where demand in the market shifts, and we're going through one of those now.

Our disciplined focus around aging, stock turns, speed to sale, and simply, meeting the market [cough] helps us maintain margins and and be well-positioned as conditions improve. The key message we want investors to take away is that we've built the systems and the discipline to manage through the cycle and then accelerate as demand covers.

[cough] Excuse me. Our local sourcing is a really important strategic capability for the group, and we continue to grow the number of units that we source locally.

A big part of that is related to our branch ex- expansion, but but also doing a better job of the conversion that of the opportunities that we're getting. Owned units up around 9% over the last year, to around 29,000 units.

We continue to see the benefits of that balanced local sourcing with with the imports. The recent fuel price shock and related increase in demand for hybrids is a really good example of where that used import market becomes very useful for us again.

Branch ex- branch expansion remains a sort of multi-decade sort of strategy for us and and multi-decade kind of commitments and obviously are a core part of how we're growing the auto retail division. We now own 23 of our sites with a carrying value of around 60 $164 million.

We're continuing to see opportunities to purchase sites at attractive valuations as we move through the interest rate cycle. Our pipeline is building, very well, as you can see here.

No new branches scheduled to come on stream in FY 2027, but we have four new branches and two replacement sites on schedule for FY 2028. Work is continuing in these areas, as you can see from the on the right-hand side of the slide.

We thought it would be be really useful to just look quickly at what's happened in Christchurch, and and and I suppose the the rationale for additional branch branches in Christchurch was always to be, closer to our cust- customers, to move from the the single branch in in the center of Christchurch to three spread across the city was enabling us to be closer to customers and generate more sourcing leads for people who want to sell us their car. With multiple locations operating through part of the year, I mean we didn't have them all on stream through the through the entire 12-month period, and and comparing to that single branch for the whole of the 12-month period, we've seen a 15% increase in our lead generation for people wanting to sell us their car, and that's led to a 22% increase in cars purchased locally in that Christchurch region.

Huge huge success in creating that operating leverage that we're aiming to replicate as that network expands and we locate branches closer to key population catchment areas. Really good case study of the strategy in action and delivering it delivering exactly what we thought it would, or we hoped it would.

I'll move on to finance now. We are back in growth mode, as you can see from the graph here.

The funding is in place to support that growth, and the business continues to generate great operating leverage for us. We're very disciplined around the credit quality credit quality, that is a non-negotiable for us, and we are selectively growing the book in areas where we think the returns, are attractive.

Total receivables up 27%, and new lending was up just over 50% for the year. I think we added two people to that Oxford Finance team through the year, you can see the sort of operating leverage that we're able to generate.

Arrears continued to perform well. We think credit quality is a key diff- differentiator differentiator differentiator for us and is core to our lending strategy.

Total arrears 2.5% at at March '26, down from 3% last year, and yeah, tracking it sort of well below half of what the industry sort of averages in the auto loan segment. Hardship applications and oh, sorry, hardship hardships improved through the FY 2026 period, as you can see from the table in the bottom right there.

We have seen a a small lift in applications through April and May, and yeah, currently tracking it around 115 hardships so far in May in total, there's definitely been a lift as as things have got tougher for people. On margin, FY 2026 delivered the highest net interest margin in the last 3 years.

I think it is worth noting that we are prepared to trade away some margin to continue our growth path where it makes sense strategically and where returns remain attractive on a risk-adjusted basis. We really do want to see that growth continue.

Unsecured lending, whilst it's still a very small part of our of our overall ledger, sort of it got a bit of attention at our Investor Day, just wanted to give people an update here. From our perspective, that unsecured portfolio is tracking very, very well.

We're limiting unsecured loans to those higher quality clients, they we only do these loans for our top two risk tiers, and that book is growing well, but as you can see, well under 5% of our total lending. Arrears tracking well below our forecasted levels in this in this period, and and remember that we were able to run well sense check these losses against the wider population of unsecured loans with the Centrix team before we embarked on this on the strategy.

The objective here is to generate risk-adjusted returns that are incremental to our secured lending and and that those returns are certainly helpful in stabilizing our overall margin profile. Okay.

Just shifting on to insurance. This is the I think James Hill described him described it as the steady Eddie of our group, I'd say stable and consistent.

Distribution network's, very, very important for us here, and we're continuing to build our digital direct capability. Claims cost inflation has been well-managed despite sort of supply chain pressures, and MBI loss ratios have edged up very slightly, but remain, very consistent with long-term trends, sort of around that 58%, 57% to 58% level.

Our digital distribution is really gaining some momentum, as you can see from the graph here. During the year, we've strengthened our capability.

We've introduced a a new MBI product for that private-to-private car market. We've also added new partners who are reselling our products now online, so that's VTNZ, Gaspy, and and Quashed.

That's added to the New Zealand Automobile Association. The message, for us is that digital is now a meaningful, scalable channel alongside our partnership distribution model.

Turners servicing and repairs, still scaling up here. We've we're building this as our sort of fourth growth pillar, leveraging the Turners brand, exp- expanding the customer base, and growing the network.

We've now rebranded to Turners Servicing and Repairs. We've got some big cross-sell opportunities that we're just kind of working into now into into our existing customer base, including selling service plans with vehicles and and just service offers into the existing Turners and AutoSure customer base.

We're building out our network model, including mobile mechanics and leveraging partnerships, such as VTNZ. Credit management: FY 2026 referrals debt debt load referrals were constrained just because of several large clients placing temporary holds on debt referrals while while they went through major system implementations, and some of those system implementations are still ongoing at the moment.

We're expecting debt loads to reinitiate sort of over the next quarter or so. As a result, revenue down 17%, and normalized segment profit down to $1.8 million.

Okay. Probably the the sort of key part of this whole deck that everyone's interested in.

We've kind of upgraded the sort of risk view that we have, funding and interest rate movements re- remain a key focus for us in in terms of how we manage our risks, and that's given the in- inflation story emerging in New Zealand. Re- recession risk has increased in our view, but, yeah, a reminder again, we have the playbook to keep our our agility in inventory sourcing, continued credit discipline, and conservative provisioning, we we feel like we're well placed to manage those risks.

For those that were part of our Investor Day back in March, this this is not new news, but we wanted to remind people of the new five-year target that we have of $100 million profit before tax by FY 2031. We've already exceeded our prior targets, and we just want to note that the $65 million target, which was for FY 2028, is that we're on track to achieve that a year earlier than we'd planned.

I'd If you want to get more color here, certainly go to that Investor Day presentation, where there's a comprehensive background and and build to how we get to that to that 100 million. Just talking about March, April, we mentioned before, our fourth quarter was exceptionally strong, and while March started strongly, it sort of progressively got weaker.

April is always a reasonably challenging month, just because of the seasonal aspects of it. You've got, Easter and Anzac Day and school holidays, and it's always a short month, But that softness has definitely been amplified by the geopolitical uncertainty.

In auto retail, we've im- implemented that same tough macro playbook that we used in FY 2024 and FY 2025. Ironically, it's it's almost about the same time in those years.

FY 2024, I think we still had Adrian Orr talking up interest rate hikes in sort of May, and then FY 2025, we had Liberation Day sort of around the same time, and all of those things had a had a similar impact to what we're seeing now. Our strong cost focus, more selective buying, positioning that inventory for where demand is, focusing on those smaller cheap smaller engine vehicles and cheaper cars, including increasing our our purchase of of hybrids, that is our playbook.

It's our bat- battle-hardened playbook from 2024, 2025. In finance, book growth has remained a a standout, and credit credit discipline remains non-negotiable.

As I mentioned before, small increase in hardship applications through April, but originations has still been pretty strong. Insurance continues to perform well, benefiting from that annuity growth and stable claims.

We're still, pushing hard around our branch rollout strategy. We we don't take the foot off the pedal there, despite what's happening in the macro environment.

We continue to invest, kind of no matter what we're seeing around us, and that pipeline is building very well very nicely. Just to conclude, on the outlook, we're expecting, strong progress towards that FY 2028 goal over this year, supported by the full-year impact of those Christchurch branches and and Invercargill, as well, and the benefit of of the much larger finance book as we as we start the year in a better position there.

In auto, focus on inventory positioning, maintaining high stock turn, we're ready to accelerate when the macro environment improves. In finance, continued focus on credit discipline and and making sure we're managing our margins well.

In insurance, earned premium holding up, really well, stable claims ratios, and and continued contribution from those new partnership distribution arrangements that we've got. In servicing and repairs, the focus, is around that network expansion, cross-selling into the Turners database, and leveraging a partnership that was set up with VTNZ.

I think overall, Turners remains a a well-diversified, very well-funded group with with clear growth levers across each division, we we are certainly confident for the next period ahead. We'll just stop there and open things up for questions.

If I could just get you to raise your hand, and then I can unmute you. James Lindsay, should we start with you?

Many thanks, and good morning, and well done. A few questions, and if anyone else throws the hand up, I'll stop, as well.

Maybe just on that $1 million economic overlay, just what would need to happen to get that used? Obviously, that arrears is at sort of 2.5% and been reasonably flat for a while.

What would that need to sort of spike to to get that $1 million sort of being used somewhat?

The way I see that working, James, is, well, particularly if unemployment rate increases further as a result of the Middle Eastern conflict and the oil price shock, then that will ultimately lead to higher arrears, so that sort of overlay will become normalized into the main body of the provision.

Got it. Yeah.

Maybe just you talked about softer trading conditions over April, just sort of can you give maybe some more color with regard to that and where you're seeing it?

Definitely. Essentially it's in the auto business.

We're still seeing good growth in finance, stable performance in insurance, but yeah, the primary sort of activity-based retail business in particular has seen a drop-off from March, a noticeable drop-off, yeah, volumes are down, margins are back at the levels they were in sort of April to June 2024. There's definitely been a hit to demand in the short term.

Got it. Then obviously, you've talked about, yeah, strong finance book and insurance is going along well, as well.

Just interested in the sort of attach rates that you've had on those and will that softness in auto retail have an impact on the sort of finance growth for this year?

I don't think so, James. Our attach rates tend to be pretty consistent.

We tend to sort of be in that low 30s to mid-30s kind of number. It bounces around a bit month to month, but you can kind of almost bank on that.

At the margins, if you kind of think about finance, about 15% of the origination comes out of a Turners branch, and then about 10% is direct, and then the balance is third-party dealers and brokers. The broker strategy that we've implemented is working very well.

We'll get, as the branch network continues to expand, we get benefit of the halo effect of that into Oxford, but as much it's the work that we do in that third-party community of dealers and brokers that drives growth for us.

Good. Then sort of going back to auto retail and the sort of comments that you'd made about margin, obviously, with transactions in the period that reported, I was up 3 and revenue up 10, margin was, yeah, strong, and from slide 20, that was obvious in the last 6 months of the period.

Can you just go back to what you were saying about where you think margins would go to now, and have you got a view about them being down in '27 versus '26?

We've got a view on what's happened in April largely and in the first couple of weeks of May, James, and that is that margins are much closer to the levels we saw in sort of April, May, June 2024. That's $150, $200 a unit down on where they were in the fourth quarter of FY 2026.

This is a place we have been before. The economy went into recession, I think, in that winter period in calendar 2024.

It just feels a little bit like that again.

I

think,

James, what I would say is that we are definitely going through a pricing transition at the moment, just like we did in 2024 and 2025. You always see some downward pressure on margins as you go through that transition.

Essentially, once you reach an equilibrium, once demand kind of sorts itself out, margins will start to build again. There is always a seasonal kind of aspect to our margins in Q1 and Q2,

isn't there, Aaron?

Let's not judge a year on kind of 6 weeks.

Understood. Yeah.

As you can see from that slide 20, you can see

a rebuild

in the second half and in most years.

You talked about your inventory building a little bit, it's still relatively low in comparison to sort of longer run history, but just how are you thinking about the tightness of the market? Has that held up margins more than it would have if they were much more normalized?

Oh, I think yeah, when

we started trying to convert more of those sourcing leads sort of back in October last year, because we sort of felt like demand was building, and therefore, we wanted to have the cars to kind of sell into that demand. The guys did a really good job of that.

They really focused around kind of things that they could do to drive those conversion rates up, and we're quite successful in that. I don't think there's any other reason than, I don't think there's been a massive shortage of supply.

I think we're getting better at anticipating what is happening in the market. We talk regularly about, [cough] the kind of next 2 to 3 months and what we see happening and thinking about how we need to position ourselves to either take advantage of an opportunity, or potentially mitigate a risk.

Yep. Then just on insurance, can you give us a sort of an indication about what the mix is of MBI versus your sort of partner and general insurance?

In terms of premiums, MBI is 70-odd percent of the premium base, James.

That's, I've

tripped you, strictly.

Yep. No, that's good heads up, thanks.

Then last one from me, and I see David's put his hand up, as well. Just in regard to the unsecured finance book, obviously, I assume quite different broker partnerships that you've got there.

Just interested in sort of the number and what's the strategy about trying to build that out to develop that segment?

The broker relationships for us, you tend to get a high degree of crossover between brokers selling auto loans and selling personal loans, they're products that kind of go hand in hand. For us, there was very sort of little work we had to do from a system point of view to be able to accommodate lending in that personal lending space, it kind of was a sensible extension of our product.

Effectively, if you think about our strategy, it's to kind of build up this customer base of high-quality customers, and we want to do more things with those customers. They're just the same brokers, and the team are doing a great job.

I think we talked about it at the Investor Day, we've got our senior lenders going and spending time in their businesses, working with their business managers and loan brokers at the coalface, giving them input around our credit policy and how we think about things, and getting them to think as much like us as we do around these loans, and that strategy is working very well.

Yep. Then just checking the like-for-likes on 26, you hit the slide with regard to your consumer arrears versus the auto loan industry.

Does that include, you've titled that consumer, that includes the unsecured, as well, or is that just the auto loans?

That's just auto loans.

Got it. Cool.

Is that the same 31 days plus like-for-like that you've got on slide 28?

That's one-day arrears.

I

think it's

plus three days arrears.

Okay. Cool.

Okay. No, much appreciate.

I'll hand it over to David. Much appreciate.

Thanks, guys. Done.

Thank you. David, I'll just unmute you, you should be good to go now if you unmute your mic.

There we go. Can you hear me?

Sure can.

Lovely. Thanks, Todd.

I had two very boring questions, and I apologize in advance. Could you just talk to what looks to me like a fairly dramatic decline in the corporate costs that's come through in the year just finished?

You've been sort of double digits for several years and down to 7.7, I think, this year.

There's a couple of things happening there, David. One, there's been a benefit of the interest rates coming down over the last, what is it now, 18 months.

Also as we kind of build out this property portfolio, we essentially allocate a market amount of that interest to property, you end up with interest which was all kind of in corporate as we develop properties. When those properties move into the use of the auto retail business, we allocate an appropriate amount of debt to the properties themselves, in the auto business, it's less about rent and more about interest and depreciation, which you'll see in those segment numbers.

I see. Thank you.

That's helpful. Just secondly, I didn't catch the numbers, but I understand the number of branches in auto has increased year on year in FY 2026.

Could you just explain why the D&A charge across the group, but in auto in particular, has gone backwards in the year just finished relative to '25?

The big change in auto in '26 was the move out of that largest branch that we had in Christchurch, there was a significant fit-out that we'd depreciated over the period of our tenancy in that location, and obviously, that dropped off, it got amortized or depreciated to zero at the time the lease expired in July. We had a big drop-off there, and we're replacing that with essentially longer-term assets that are depreciated over a longer time period, these are the land and buildings that we occupy.

I think that's a big chunk of the change there.

Okay. That's great.

Thank you very much.

Great. Thanks, David.

Is there anyone else who wants to ask us some searching questions? Oh, Jake, yep.

Jake, you should be able to open your mic.

Perfect. Thanks, guys.

Just quickly from me: did you see any sort of spike in end-of-life activity or replacement vehicle demand from some of the flooding in Wellington in April?

Yes, we have, Jake, and that will flow through into this financial year. Yeah.

Yeah. Not like sort of in the order of a couple of hundred units, not the thousands that we saw in 2023 in Auckland.

Right. Is that just because of your sort of network coverage, or just there not being the same number of vehicles on the roads at the time?

It's just not the same number of vehicles involved in that particular location.

Right. Thanks, Todd.

Okay. Kieran, we're opening you up now.

Oh, g'day, guys. Just one from me, and apologies if you've already covered it off, but there seems to have been a reasonable improvement in the amount of ex-overseas vehicles being registered post the changes to the Clean Car Standard.

Just curious if you're seeing any sort of benefit, as a result of that, whether it's your competitors sourcing less locally, or more sort of funneling into the end-of-life division as cars are replaced, but yeah.

I think interestingly, we are seeing kind of a decent-sized increase into that salvage business at the moment, into that damaged and end-of-life business. Whether that's part of it, could be.

I think more broadly, more used imports into the country is probably good for the fleet, because you're generally taking out a much older car to replace it. That has to be a good thing.

It's certainly good for the Oxford and AutoSure business, because those are more sort of opportunities outside of the Turners network to finance and insure. Probably does take some pressure at the margins off the local sourcing, as well.

Overall, I think it's a positive for the business.

Cool. Thank you.

Okay. Is there anyone else who'd like to ask a question before we wrap things up?

Scanning through the attendees, looks like we're probably reached a natural conclusion there. Thanks very much, everyone, for your time this morning, and we'll catch you all soon.

Please, if there are any other questions, just feel free to reach out to Aaron and I directly. Thank you.

Have a great day.

Goodbye, everyone.