Turners Automotive Group Limited

Okay, we've clicked over 10.30, so we'll get on with things. So welcome everyone this morning. Thanks for taking the time to join the call today. Looks like we've got a good solid group of people online, so thank you very much. Usual team presenting, so Aaron Saunders with me, the group CFO, and myself, Todd Hunter, the group CEO. So we'll go through The results, then we'll open up for Q&A at the end, so people can just use the raise hand function. Great to see James and Kieran have already got their hands up, so I look forward to that. Or alternatively, you can just use the chat, and we can see the questions come up. So either is good for us. And we'll just open the audio as well. So I think you can probably just do it yourself. We'll sort that out when we get to the end. So let's sort of kick off with things. I think we're really pleased with the six months just completed. Another record result for the business, highlighting yet again the consistent earnings trajectory for the group. Turner's has continued to grow earnings despite what's felt like a very, very challenging macro environment for us to operate in. particularly the change from the beginning of the calendar year into that April, May, June period. We've seen vehicle margins growing, finance has been an absolute standout result, and insurance has delivered really good growth as well. And we've also taken a number of steps, which Aaron will go into, to improve our capital effectiveness. In short, I think this is another great result for Turner's. Yeah, the used car market itself has recovered somewhat over the last year, but really the big change has been the reduction in used imports coming into the country, and that's sort of driven the fastest ageing of the fleet than we've ever seen before. And largely that's just simply down to the government regulation that's been in place with the Clean Car Standard. So that's put quite a lot of pressure on securing stock locally. It's just sort of forced more dealers into that sort of local sourcing channel. But the expectation is that will reduce with the announcements this week around the relaxation to the clean car standard. That will certainly open up that import channel and make it more viable going forward. We believe there are a number of benefits for tuners with more replacements, more replacement of older vehicles, leading to increased volume for our damage and end-of-life division, more transactions in the market, which just drive opportunity for Oxford and Autoshore. And just going back to that earlier comment, it should reduce competition for local stock as more displaced sort of import dealers go back to Japan. So I think net net, yeah, definitely a benefit for the group. that pressure on securing stock has forced a number of these smaller sort of marginal operators uh to leave the market and i mean it's an interesting graph when you kind of look at that over over that sort of seven or eight year period just how much that has dropped um so 27 but you know you have to go back to 2012 to find dealer numbers as low as they are now Okay, I'll just hand over to Aaron now, who's going to take you through the next 10 or so slides.

Thanks, Todd, and good morning, everyone. Results-wise, we're pleased. We've eked out a good increase in revenues, particularly in the auto businesses, and profit lines, profit for tax and profit after tax, both up 13%. Earnings per share, up 11%, and the directors have declared a fully imputed dividend of $0.08 per share. which will result in a slightly over 10% increase in the full year forecast dividend. In terms of profit growth, it's been well distributed through the auto-focused businesses with a little bit of interest cost savings coming out of corporate. Auto retail profits have lifted due to improvements in owned car margins and a stronger commercial business, so that's our trucks and damaged and end-of-life business. Finance profits have been boosted by solid growth in the loan book and an improving net interest margin. Insurance has seen good growth in the premium base, which will underpin high profits going forward. In terms of the balance sheet, inventory levels have grown since September 24, but they do remain low relative to historical levels, and we would certainly like to grow these further at the moment. Finance receivable growth has come about as a result of strong market share gains across the originated base. Property plant and equipment assets are up, and that's off the back of completion of new owned sites in Christchurch and Napier, and the purchase of a new site in Dunedin. And borrowings are up in line with the increase in finance receivables. And importantly for us, we've deployed no additional capital to support the increased lending in that business. The business continues to be well funded. We've made some really good progress in the last 12 months, just reshaping our facilities. Our corporate capacity is more than sufficient to support our committed branch expansion plans in Aotearoa, which is sites in Auckland, Tauranga, Whanganui and Dunedin. And there's a strong appetite from our lenders to support us further.

Sorry, I'm just going to make sure I've got everyone muted here. I think we have, yeah, good.

Sorry about that. We have completed our inaugural public turnout transaction out of the securitisation warehouse, and that executed on the 10th of October. That's a really big step in the funding of Turners and Oxford Finance. It's our first public transaction, so the main warehouse, mezzanine warehouse funded by BNZ, and we've essentially brought in 13 new investors into that public deal. And yeah, particularly well supported by local institutions as well as a couple out of Australia. The structure gives us quite a significantly improved capital effectiveness, which really will support our growth objectives at Oxford without that requirement to put any further capital into the business. So to give you an example of how this structure has landed, our capital requirement has reduced from 8% or $16 million on the $200 million facility down to 1.4% or just under $3 million. So that's a real win for us in terms of enabling further growth in Oxford. Which leads me to capital effectiveness, which is something we are prioritising across the business. So that's at a board and management level. We're prioritising increasing our capital efficiency and the way we allocate to ensure the business remains agile and also focused on the highest returning opportunities. The recently completed term out has not only reduced our capital requirements, but contributed to a reduction in funding costs. And we're developing a deeper capital management framework across the business, really optimising our finance structures, reallocating surplus capital from lower return areas and driving targeted growth, particularly in auto retail and finance. These initiatives, I believe, supported by the strong culture in the business and a highly engaged workforce, just on two-thirds of whom own shares in the business through participation in the employee share scheme, really position turners to capture further upside as the market conditions improve. In terms of our dividend forecast, shareholders continue to be rewarded with a payout ratio just under 70% of net profit after tax, and that'll take this year's forecast dividend up to $0.32. That's a cumulative annual growth rate of 11% over the last 12 years. Based on a share price around $7.70, that results in a gross yield of 5.7%.

Great. Thanks, Aaron. We'll just go over the segments now. So, yeah, let's start with auto. Auto retail revenue up 6%, profits up 9%, which is good. Good to see that operating leverage. Growth driven by an increase in locally owned units and higher margins on that locally owned stock. As many of you will know, we relaunched the Tina campaign this year, so Tina 2.0, and this associated uplift in marketing spend of about $600,000 over the first half last year, and we've had a very positive response to that new campaign. We have seen a reduction in the number of lease consignment cars through the business, so down around 8%, and we've also had a lower proportion of retail cars sold mainly due to vendors prioritising speed to sale, so that auction channel over the retail channel. It's just that prioritisation of speed over return in what's been a pretty challenging demand environment. And also we are purchasing a higher number of older cars, which kind of reflect what's happening in the fleet with that rapid ageing going on at the moment, which means we've just got less retail suitable units been purchased. Margins have improved, so despite the macro challenges, the division has delivered margin and profit growth half on half. And then, yeah, the rapid ageing of that New Zealand vehicle fleet has resulted in more end-of-life vehicles being purchased, which, as we said before, are unsuitable for retail. But that non-insurance written-off segment is a growing opportunity for our damage and end-of-life business. You can see that in the red part of those bars there. In terms of our branch expansion plans, we've delivered five new projects over the last six months. So that's a larger site in Invercargill, the three sites in Christchurch and a Napier commercial site. So we are really pleased with the progress we've made on that front. And also really pleased with how the pipeline is building. So we've added Dunedin in there and we've got Roscommon Road, Tauranga and Whanganui now all sort of locked in for delivery, which is great to see. And the pipeline of opportunities is a continued sort of focus for us. Yeah, we've got a number of sort of in-progress negotiations at the moment. They're not sort of concluded, but, yeah, certainly kind of a lot of lead in the air in terms of things that we're working on, which is good. Finance, yeah, super result for the Oxford team in the finance division. So revenue up 10%, segment profit up 18%, and... That book is definitely back in growth mode, which is great to see. We're continuing to sort of grow our quality metrics or improve our quality metrics. So we're certainly not foregoing any sort of downgrade in terms of the quality of loans that we're looking to onboard. And we've managed to achieve a small amount of NIM expansion over that six months as well, which is really positive. So you can see just, you know, we've had really solid growth in that first half, 13% up over first half last year. And I wanted to let you all know today as well that we've actually just broken through 500 million yesterday. So yeah, the team are stoked with that and certainly that's been achieved much earlier than we'd anticipated at the beginning of the year. So it's good to see the momentum in finance continue into the second half. Yeah, our quality focus hasn't shifted. We're still seeing sort of small lifts in our overall credit scores, which is good. And that's just as a result of us continuing to tweak and tighten our credit policy for the opportunities where we see to do that. So, yeah, I think everyone should take comfort from the fact that we still have a laser-like focus around the quality of this loan book. This is a slide we've shown many times before, but I think it's important to just review that quality focus leads to very good arrears performance. We are tracking at generally less than half of what the industry average is for the auto loan book across New Zealand. uh and also good to see our hardship applications have sort of backed off a little so you can see there we've moved from uh 67 in the first half last year uh down to 55 a month um in the first half this year so yeah i i suppose i take that as a as another small sign that that things are improving uh more broadly And then lastly, yeah, just a nice little lift in NIM off the back of some of the improvements in funding that Aaron was talking about, and just the continued, really disciplined approach to our risk pricing, which is helping as well. Okay, so let's talk about insurance quickly. first half and obviously that flows into our earned premium going forward so really good to see that top line revenue growth and the reason that has happened is we've increased the breadth of distribution in our dealers and brokers and our digital direct offering is certainly starting to get some traction which is always what we plan for and we continue to see good growth in that MBI comprehensive motor vehicle insurance partnership with Vero Our risk pricing is more layered, leading to that improving claims ratios and the quality of the portfolio. And just a reminder that we don't underwrite that motor vehicle insurance risk. We just take and earn on every policy sold and every policy renewed. So that's the growth in the motor vehicle insurance portfolio. So you won't see those revenue numbers flow through our accounts, just the commission that we earn. uh it's a digital direct um and just a yeah the fact that claims continue to be well managed uh as you can see on the left hand side of that slide with that graph there um there's a little bit of claims sort of claims inflation it seems to be uh pretty specific to a to a certain category of cars which unsurprisingly to those who've heard from us before relates to european cars um And that's something that we're just keeping an eye on going forward. So, yeah, just wanted to call that out. In credit management, the recovery here has been challenging. And you can see that with revenue down 14% and profits down 42%. There's no doubt the economic situation is having a negative impact on consumers' ability to meet arrangements. So our kept promise rates have dropped. And we've also seen a number of major clients go through system projects. So they've changed out their collections software and that has resulted in extended periods of debt not being loaded. Excuse me. So debt load is down 24%, half on half. We should see that debt load improve as those system projects are completed and debt load normalises. But the challenging trading conditions are resulting in a slower turnaround in this business than we expected. So as a result, our plan is to review the carrying value of that business at year end based on the second half performance and the momentum and outlook that we see for that business going forward. Excuse me. uh internal servicing and repairs uh yep we've been busy rebranding that my auto shop business to turn servicing and repairs uh largely that's completed now uh we've lifted the number of technicians um since the beginning of course since the first half last year and uh yeah really seeing a Great developing relationship with BTNZ as well. So we've taken over their pre-purchase inspection product in Auckland and looking to roll that out in further locations around the country. And yeah, we've now clipped over more than 4,000 Google reviews now of an average score of 4.9. We know we continue to deliver a great customer experience in this business. Okay, just a few comments around the outlook. Yeah, we feel like the risk outlook has remained pretty stable for us. A number of our particularly regulatory risks have improved with changes to the clean car standard. the climate reporting threshold increasing and some of the changes the government have introduced around the triple CFA as well. So yeah, that feels like that aspect of our risk has definitely improved. I think we continue to feel the recession risk has decreased and trading conditions should improve as the impact of those larger interest rates flow through and the primary sector kind of trickles down through the economy. More specifically, pretty much the same game plan for us. It's a continuation of our branch expansion plans. We think we'll see some recovery in lease units and improvement in retail numbers as the economy continues to track out of recession. Consumer confidence builds and consumer demand builds off the back of that. And vehicle pricing, yeah, I certainly shouldn't lift off the back of that, which will be supportive of margins. In finance, yep, we maintain our credit discipline. That remains a key priority. We are seeing expected improved performance in FY26 as a result of lower than expected impairments in credit losses and improvements in interest margin. And we'll see continued growth and origination in the second half. Insurance, yeah, growth and gross written premiums will flow into those forward earnings, claims ratio stable and just further contribution from the new distribution arrangements we have in place. And yeah, in credit, the challenging conditions feel like they will remain and we'll review that carrying value at the end of the year. So guidance wise, Yeah, I mean, clearly there's still some sensitivity around the pace of recovery in the economy. No one will be too surprised about that, but we feel like we're certainly on track to deliver a result around $60 million in profit before tax, and that will deliver an expected dividend payout of at least $0.32 per share. So just final few comments from me just before we open up for questions. I think this year so far reminded me of that Mike Tyson quote, which is, everyone has a plan until they get punched in the face. And it's fair to say that the first half has definitely unfolded differently than we expected. I think it's been probably much harder than we anticipated when we kind of got through the last quarter of last year. So that recovery has been much slower. Demand has been more impacted. We've had lower consignment volumes and more competition for local stock. But despite the punch in the face, we've reacted. The team's done an outstanding job and we've still delivered a record result in the first half of this year, which just goes back to demonstrating the group's resilience and agility and keeping us on track for delivering another record full year outcome. Our teams have continued to press forward regardless of the challenges to keep expanding the branch network, grow the loan book in size and quality, and grow insurance revenues. And we think, yeah, that second half is definitely going to be more favourable than the first half as the economy improves. OK, we'll open up for questions now. So... James, do you want to kick off?

More than happy to. Thank you, team, and congrats on a good performance. It's an easy game to avoid recessions, isn't it, obviously?

Yeah.

Hey, just going back to the comment with regard to inventory, looking a bit light, and obviously the branch expansion is probably helping you source more, but can you talk to anything else that could sort of improve that? Just sort of interested in sort of price versus margin, et cetera, if there's anything that could be done to improve volume, or are you prepared to take the margin?

Yeah, I mean, it's a delicate balance, isn't it, James? Because we could quite successfully go and buy a lot of cars very quickly, but buy a lot of problems. So it's always a managed effort. What we have done in the last sort of probably couple of months is put quite a lot more focus into the actual – cars that we're trying to target, the kind of response and kind of customer contact plan that we have around getting people to the branch and just being, I'd say, more reactive. And that has certainly worked. We've really prioritised to our branch managers that they need to be personally involved in these transactions. Like that is their number one focus at the moment. And we've seen quite a good uplift in our buying over the last sort of four to six weeks. So, you know, inventory is backlifting again. You know, we're back sort of over that sort of 3,000 units owned, which is really, really positive for us leaning into these you know, critical sort of summer months of trading for us. It's typically a higher demand period. People kind of come out of the winter period. They're just feeling better about life because the sun's shining and there's less rain. and they've got more time on their hands to go and purchase cars. And combined with that sort of recovery in the economy and confidence and things, yeah, we're seeing the right things happen. So, yeah, I think we're seeing the right things, James, and the kind of focus that we're giving it is seeing us improve.

And obviously on the system side of things as well, as far as avoiding the wrong type of cars for losses, how is that going across the country?

Yeah, it's going well. I mean, if you recall, over the last two years or so, we kind of deliberately targeted that lower price stock because that was where the demand in the market was. Demand had kind of leaked away for those cars sort of north of $20,000. And so we're kind of going back into that space as well. So, yeah, I think we're, again, we're kind of positioning for this recovery, focusing on the kind of right price points for where we think the demand is going to be.

And obviously your chart with regard to dealer numbers falling, has that provided any opportunities from a further site acquisition perspective? I'd imagine, you know, sort of weak economy and as you say, those dealers being in trouble, is it spurring up other options for yourselves?

Yeah, I think it is. I mean, Aaron, you probably want to talk about Invercargill as a good example of that.

Yeah, definitely, James. So we, you know, on the 1st of April, we moved into a new site in Invercargill, which is about two and a half times bigger than our existing site. And that had been a competitor of ours who pulled out of that market. Similarly, the site we just purchased in Dunedin was previously tenanted by a car dealer who had shut up shop. So certainly, yeah, the state of the economy and the car market in particular is throwing up quite a bit of opportunity for us. It does feel like now Now is the time to go harder in terms of our branch expansion strategy.

Yeah, I'd probably concur on that. Nice work on the finance book. Good to see that through 500. Maybe just talk about your sort of aspirations for that book and where in that sort of premium space that you are, where you think your market share is and could go to.

Yeah, so our market share in Oxford sort of tracks at around 8%. So yeah, there's plenty of opportunity left for us from a market share perspective, no question. We've had good success in terms of traction with the broker community in So that's been very positive for us. And the traction that we're getting is around the speed of response that we can give dealers and brokers. It's the speed of an answer, whether that's a no or a yes, we can give them an answer very, very quickly and not take any more risk on in that decision from our side. So we've really put a lot of effort into making sure we get the the critical information up front, but not get more information than what we need to make the right decision. So, yeah, that's working really, really well. And in terms of our aspirations, I mean, we're growing really well at the moment. There's no reason that it can't continue. So, yeah, we're thinking big here. Yep, got it, thanks.

And then thinking big, obviously the 17 technicians in servicing and repairs, et cetera, that seems like a low number relative to the number of sites around the country for Turner's itself. And I assume many of those sites would have the potential for two or three or more vans, I would have thought. So can you talk about what that could look like? Is that 50 or 100 in a few years' time?

Yeah, it could be up there. I think we're taking a measured approach to this. We just want to make sure we're betting in the model, making sure that we can see the growth in demand to support that. I think, I mean, probably what has surprised us a little has been, I think the economic sort of environment has probably caused people to kind of delay some of that vehicle maintenance and servicing. So, you know, we probably haven't seen demand growing quite as quickly as we would have liked. I think that will change, but we're going to take a measured and sort of responsible approach to that.

And last one for me, I'll pass over to others, but maybe just more on the credit management review with regard to the goodwill there. So roughly sort of 25 mil potentially of goodwill there, albeit some of the comments that you talked to sounded more one-off in nature with regard to the impacts on that credit management side of things. So just sort of interested about what's driven your view to need to review that to the downside, or is it just a permanent view that it's going to be a small business and tighter margins?

Yeah, I mean, I think there certainly have been structural changes in the credit market, James, over the last five years. You know, for instance, the revamp of the triple CFA, I mean, I guess the thing that kind of stands out for me is before that, you know, every couple of months you get a letter in the post from the bank saying your credit card limit's gone up by a to increase your credit card limit, you've pretty much got to go through a whole new application process as the banks apply those affordability requirements to the triple CFA. So I think the big kind of opportunities in that business are really around growing share of what appears to be a slightly smaller market, particularly in terms of collecting unsecured debt on behalf of big corporates like the banks. So perhaps what's changed is our view that some structural factors have changed in that market, and that's kind of borne out by the fact that we're just not seeing the recovery that we have expected over the last couple of years in that business. And yes, there have been some point areas where banks have been upgrading systems and things like that, but Yeah, I think we just want to have a look at that business, revisit the trajectory, re-look at where we think we can grow it and then just assess that business. Off the basis of the fact that it isn't part of the core auto story and our focus and our significant competitive advantage lies in that used car ecosystem.

Yeah, and then from that, does it sort of increase the potential that a disposal is being thought about?

It doesn't reduce it, James.

Yeah, very good. I'll pass it back to others. And again, well done as outstanding result for a dodgy economy that we've all been experiencing. So well done. Thanks.

Thanks, James. Thanks, James. Hey, Kieran, shall we hand over to you? Can you unmute yourself, I think, hopefully?

Yes, can you hear me all right? Yeah, sure can. Great. Good morning, guys. Thanks for the presentation and well done on another strong result. The first one from me is just on auto. We've seen the margins on owned units tick up 17% from what was a fairly soft prior period, but they are down 16% from 2H25 levels. So can you just talk us through what drove the half-on-half decline? Was it digestion of the new Christchurch sites, the weaker economic conditions, and maybe just talk to the seasonality of the margin profile in that business as well?

Yeah, I mean, my view is always that margins are strong. Transaction volumes are normally a bit lower during the summer half for us, which is the October to March period, but margins are always stronger. And I think the other thing probably that I'd call out is that we've ended up buying more older vehicles at lower values, which have still delivered positively for us, but slightly lower dollar margins than we see on the higher ticket price vehicles. I'm pretty comfortable with where margins landed in the first half, given that the first half of this year for us, the April to September period, just felt almost like a rerun of April to September. last year and that, you know, reasonable momentum coming out of summer and then, you know, April, whether that was Liberation Day or, you know, people getting a reality check, you know, post-summer holidays, but, you know, demand. Employment, unemployment. Yeah, it just felt like it materially softened in that April to June quarter, which is exactly what happened in the year before. So we're hoping that that we'll get out of that cycle in the year ahead. But certainly, you know, there is a spring lift in margins. There's more buyers in the market. Inventory is somewhat constrained. So, yeah, I feel that whilst we haven't broken the seasonal pattern, we're coming into the better part of that seasonal pattern now.

Yeah, margins are tracking kind of $100 north of where we ended up in the average for the first half, Kieran, into the second half. So, yeah, you're kind of seeing that lift already.

So do you think it's reasonable to assume with that building momentum that we'll see a year-on-year improvement in the second half, or are you going to be held back by... You do?

Okay. No, I think... I mean, it feels stop-start a little bit at the moment, and there is certainly a two-speed economy. You know, South Island and Lower North Island are really, really strong for us. We had a little bit of disruption, you know, with the transition in Christchurch, which... you know, maybe cost us 300 odd units because it was, you know, there was just a lot of moving parts moving from one site to three. But, yeah, certainly feel that things are on the improve and, yeah, we should, yeah, I'm pretty confident we'll beat the second half of last year.

Cool. Thank you. Next question is on Oxford. you know, you obviously saw some strong ledger growth for the first half up 13%. And I think in your four month update, you know, the loan book was up just 5% year on year. So can you talk about what drove that acceleration in the last two months of the half? And should we be extrapolating the first half book growth and then expansion into the second half? Would you expect some slowing

Yeah, I think that 5% number that we quoted, I think it was that the ACM was on the March number, whereas that 13% is on the September comparative. Oh, yes, yeah. Yeah, I mean, we are seeing good momentum here. Yeah, I think Oxford will be a beneficiary of kind of more retail sales in the Turner's network. We're seeing good share growth across dealers and brokers, independent dealers and brokers. Our direct business is growing nicely. So, yeah, I mean, I think momentum should continue, right, Aaron?

Yeah, I think our focus has changed slightly. In the first half of last year, we were really focused on rebuilding interest margins. And to some extent, we were suppressing growth with our pricing strategy and you know, now we're very comfortable with where margins have got to, you know, sort of post the OCR cuts out of the RV. So, you know, our focus is no longer so much on optimising margin. Our focus has shifted more to growth with the kind of underlying fact that our credit policy is the tightest it's ever been. So, you know, we do feel that at 8% market share, we've got a really, really good service proposition our pricing is more competitive than it was this time last year, we should see a continuation of those strong growth rates.

Great, thanks. And then just the last question, a little bit of a tick up on your impairment expense through the first half. I appreciate arrears are relatively low, but how would you expect that to track through the second half? And, you know, Would you not expect that to be coming down now that unemployment's starting to peak?

Yeah, I think unemployment is always a lagging indicator. And I think there's two things going on in the employment market. For a start, there's a very strong job market in the South Island. So that's almost behaving like a different country at the moment. But just focusing on the North Island, it's not just unemployment, it's underemployment. So I think... you know i think that unemployment if you listen to the bank commentators probably got another you know one or two points of increase to happen but there is also significant underemployment and you know people aren't getting as many hours as as perhaps they want or need to support their lifestyle so i i do think that that story has a little little further to play out um our credit losses are up on the first half of last year You know, that simply, I would put that down to a function of a larger book. But also, you know, I mean, as Todd said, hardships probably peaked in the first half of last year, but there are still, you know, elevated levels of people coming to us under pressure. And those are the good people, right? Those are the people who come to us and say, I've got a problem. How can you help? There is, you know, I would say we're seeing... As an anecdote, we're seeing as many cars being left at the airport as occurred during the GFC. So that is people leaving the country, and I would put that down directly to the employment market. So, you know, people are actually going back home to where prospects are probably better at the moment. And, yeah, that should change as the employment market improves. But certainly... Yeah, certainly it feels like there's a bit more to play out in that unemployment story, and the way we look at it is, you know, we created a buffer under the provisioning standards under IFRS, and we'll generally, you know, release that buffer as the economy normalises, and that's probably got another 18 months to run, Kieran.

Great, thank you.

Okay, thanks, Kieran. Grant Lowe, should we bring you in? You should be able to unmute yourself, hopefully.

Hi, Grant. Can you hear me okay?

Yep, sure can.

Great. Yeah, congratulations on a good result. Just reiterating that. Just around the couple of points. So I haven't quite got my head around the financing changes just as yet. But in terms of, you know, that term out, et cetera, With the equity base that you've got at the moment, how should we think about the capacity for receivables based on today's sort of equity base?

Well, I think in the medium term, we can grow that book by 50, 60% without having to allocate further capital to Oxford.

Okay, so north of $700 million is sort of the way to think about it. Up towards $800 million, yeah. Okay, no, that's great. No mention of the FY28 target in the presentation. Obviously, you've said that the $65 million will be expected to be achieved ahead of schedule, and obviously you're very well on track for that. What's the latest thinking on that?

uh we'll update at the year end around that grant yeah yeah clearly clearly no change in our thinking though in terms of what we've communicated previously yeah clearly we're going to get to it sooner than fi 28. yep okay no change

That's great. And then just last one for me around the Christchurch sort of projects and transition impact, et cetera. You sort of quantified the 600K of marketing side of things. Are you able to put sort of a rough number on what that sort of drag was from those Christchurch projects? You mentioned the 300 vehicle sales potentially lost, presumably some startup costs perhaps. Do you have a rough idea of the drag that might have been in the first half?

Yeah, I mean, it'd be the order of half a million dollars, I'd say, Grant.

Okay. No, that's great. That's all for me. Thank you. Thanks, Grant.

Okay, I'm just going to check in on Kieran's thoughts. Kieran, do you want to ask something more?

Yeah, I might just jump in with one other question. Yeah, sure. Just thinking about industry dynamics, and you touched on it at the start of the presentation, but With the clean car standard impacts, you know, we've seen the sharp decline in ex-overseas registrations and dealership closures have accelerated. You know, on the face of that, it seems like a positive for turners. But then at the same time, you're saying, you know, net-net with the changes that were announced this week, you're actually expecting to benefit overall from the reduced clean car fees. So can you just elaborate on that point and sort of Hawker's three, you're thinking?

Yeah, yeah, definitely, Kieran. Well, firstly, there are kind of two aspects to the group in that, or to the kind of auto ecosystem in which we operate. And Oxford Finance and AutoShare both benefit from higher transaction volumes and particularly, you know, particularly penetration in that import space. So, you know, further growth in imports will be good for both of those businesses. And in the auto space, the car retail space, you know, higher transaction volumes broadly are good for us in that we have this big sort of local sourcing engine. We've seen some competition, particularly, you know, Google AdWords and things like that by dealers who aren't able economically to source cars out of Japan and we expect that to dissipate. And so on the sourcing side, we would expect to see a bit less competition with the import restrictions easing off. So that's a good thing for us. The more cars, particularly older cars that leave the fleet, the better that is for our damaged and end-of-life business. So whilst we might see a little bit more competition at retail and we might see a slowing in the trajectory of dealers leaving the marketplace, on balance with gains in AutoSure and Oxford and further kind of churn-related opportunities in the auto business, we're quite happy to see tick up in imports and in fact we've we've been adding our voice uh in lobbying for relaxation in that clean car standard um and overall you know from a kind of nz inc point of view i think we're better to be replacing 22 23 year old cars with eight year old imports than um you know then persisting and keeping those older cars on the road so so in a turn a specific story Our business really is about pivoting to where we see the best opportunities. Relaxation as standard will result in us importing some more cars. It will result in others importing some more cars. In the medium term, we still think scale, reach, operating leverage, brand will kind of see us building further market share in this market and and so we're yeah we're we're kind of comfortable with it um you know with a more vibrant import market from that point of view great that's that's helpful thanks aaron okay uh i'll just quickly flip back to the q a and just see if we've got anything there um so yeah we've got a question from uh kim center

A number of your buildings have very large roof areas. They certainly do. Probably less so now, but less so than we used to. Are students considered solar to reduce on-site expenses and or insulate the company from energy cost increases?

Yeah, great question. So we have solar installations in two of our sites. I think economically speaking, solar is still marginal. You get a pittance for putting power back into the grid. So really, it's solar plus a storage option, you know, essentially batteries. So there are certainly areas where solar makes a huge amount of sense. I'll give you an example. We're expanding our operation, one of our operations in Manukau. We will draw more power from the grid Vector would like us to pay for a larger substation that will essentially cost us north of $300,000. We can put in a solar or battery solution for about $100,000, and that clearly is an economic answer, an optimal solution for shareholders and for the environment. So I think over time, solar, the economics will become more compelling. and there are point opportunities for us across our network many of our newer sites are you know they are really quite small buildings and and so um yeah we'll look at solar installations over time to take some of the load away from the grid but i don't i don't see a full switch out being economic for quite a long time okay uh are there any more questions that anyone would like us to answer uh before we wrap up there's if you can

You can either raise your hand and you can unmute yourself to ask the question or just drop something into that Q&A feature within Teams. Okay. Well, that feels like we've probably come to an end. Of course, if you do have a question that you want to ask later, just get in touch with Aaron or I. Our emails and phone numbers and things are on the presentations and the documents and things. So we're always very happy to answer any questions that anyone has. But yeah, thank you very much for your time this morning. Enjoy the rest of your week. Thanks very much. Thanks, everyone.