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ShareChat News: Turners Auctions Half Year Profit Falls 22%

Turners Auctions, under attack from on-line trader TradeMe, said today its half year net profit fell 22% to $2.33 million.

The company stated that despite difficult market conditions it had managed to hold revenue from continuing activities at the same level as the previous half year.

The biggest growth area was Turners Smart Auto Centres, where revenues were up 185%.

Turners Finance also reported increased revenues, 30% above the prior period.

Chairman Michael Dossor said revenue at its traditional Auctions division was affected by declining used car market sales with unit sales down 8.3% on the same period last year.

The group's car importer, Turners Fleet, had also suffered a revenue decline caused by a 4% fall in average selling prices.

The company forecast full year net earnings would range from $4.7m to $5.1m compared with $5.0m last year, which was in turn down 28% on 2004.

Chief executive Graham Roberts said he anticipated the falling New Zealand dollar, coupled with a prolonged period of low demand for used imported vehicles, would most likely result in a significant rationalisation of vehicle importers over the next year.

Despite a 32% decline in profitability for Turners Fleet, shareholders should note this company had also contributed a further $700,000 to the overall result through commissions to Turners Auctions, Roberts said.

He said the company had successfully rolled out Turners Live, its response to TradeMe. It was now simulcasting every vehicle auction to the Internet.

"Customer reaction had been very positive with a growing number of bids now coming directly via the Internet."

He saw Turners Live as a major growth initiative for the remainder of 2006.

The company said it had sold out of its North American operations Ables Auto Auctions and Ehli Turners Auctions.

Turners shares last traded at $1.85. They have traded between $1.67 and $2.85 in the last year.