Sharechat Logo

Trade Me posts flat 1H profit; warns FY18 profit will grow at a slower pace than FY17

Wednesday 28th February 2018

Text too small?

Trade Me, New Zealand's largest online auction site, said earnings didn't budge in the first half as its expenses grew faster than revenue and it expects full-year profit to grow at a slower pace than last year.

Net profit rose was unchanged at $46.1 million, or 11.6 cents per share, in the six months ended Dec. 31, the Wellington-based company said in a statement. Total revenue gained 6.8 percent to $122.7 million, lagging behind a 9.2 percent rise in total expenses to $43.9 million. 

Trade Me's revenue lift in the latest period was driven by listing fees from its classified businesses, where revenue was up 14 percent to $67.9 million, making up 55 percent of the company's total revenue. However its expense growth weighed on profit with cost of sales up 24 percent to $9 million and employee costs up 12 percent to $19.6 million as it hired more staff, taking the number of full-term equivalent staff to 564 at Dec. 31, from 514 at June 30.

The company said it expects earnings before interest, tax, depreciation and amortisation and its operating net profit after tax to grow in the 2018 financial year, but at a slower pace than in the 2017 year as it ramps up investment. Total revenue growth for the full year will be similar to 2017, although it said there was uncertainty around revenue from its property division due to the volatile housing market. In the 2017 year, Trade Me revenue increased to $234.9 million from $218 million, while after-tax profit lifted to $94.4 million from $74.9 million.

"The first half of the F18 financial year has broadly tracked to our expectations," said chief executive Jon Macdonald. "We will continue to invest at a rate slightly above revenue growth in F18 and we expect to deliver year-on-year ebitda and operating npat growth in F18, albeit at lower growth rates than F17 due to this higher level of investment."

Trade Me will pay a 9.1 cents per share dividend on March 20, up from 8.5 cents a year earlier.

The shares last traded at $4.30, and have dropped 17 percent over the past year.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares rise as optimism over US-China trade deal lingers; Fletcher gains
NZD under pressure against Aussie as investors cheered by easing of trade jitters
PFI properties’ valuation rises 5.5% to $1.32 billion
Broader definition of workplace harm in new govt health & safety strategy
MBIE officials grilled on terms of Westland Milk loan
Trade Me suitor Hellman & Friedman drops out
Hydrogen not a short-term option for Huntly - Genesis
Kiwibank says customers have a dwindling need of physical branches
Buying off the plans driving down KiwiBuild cost to govt: HYEFU
Fiscal policy to slow growth over next five years, despite surpluses

IRG See IRG research reports