Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


UPDATE: Trade Me seeks acquisitions, may extend bank loan

UPDATE: Trade Me seeks acquisitions, looks at longer bank loan

By Paul McBeth

Feb. 20 (BusinessDesk) - Trade Me, the online auction site spun out of Fairfax Media in 2011, is in the market for more acquisitions, and may extend its $200 million bank loan.

The Wellington-based company made three purchases last year - the directory site, Tradevine inventory management tool and Autobase classifieds site - and plans to keep doing so.

Chief executive Jon Macdonald said the company plans to keep investing as it seeks new growth opportunities, and "we'll likely augment our portfolio with judicious investments over the coming years."

Macdonald told analysts there were "clear opportunities in the classifieds business"

"It's quite nice to have three smallish acquisitions under our belt, and we're going to continue to grow out muscle in this space," he said.

The online auction site held $36 million in cash and equivalents as at Dec. 31, and chief financial officer Jonathan Klouwens said Trade Me is very happy with the facility, it's terms and is looking at extending it.

Trade Me took on the $200 million facility as part of Fairfax Media's partial float, when the Australian firm then drew down $166 million cash as part of its exit.

The online auction site today announced a 2.7 percent increase in profit to $37.4 million, or 9.43 cents per share, in the six months ended Dec. 31. That beat the revised forecast from its initial public offer of $34.8 million, and just short of Forsyth Barr analyst Rob Mercer's expected $38.1 million.

Earnings before interest, tax, depreciation, amortisation and depreciation climbed 14 percent to $59.2 million, and revenue gained 18 percent to $80.4 million.

Macdonald said the company is comfortable with analysts' forecasts for annual earnings, with trading in the last six weeks consistent with the first half. Trade Me is expected to post net profit of $77.5 million on sales of $163.9 million, based on the median forecasts compiled by Reuters.

The shares fell 2.7 percent to $4.29 in trading yesterday, and have gained 11 percent this year.

The stock is rated an average 'hold' based on nine analyst recommendations compiled by Reuters, with a median target price of $4.145.

Trade Me's board declared an interim dividend of 7.5 cents per share, payable on March 26 for shareholders on the register as at March 15.

Trade Me's general items revenue grew 7.5 percent to $33.12 million on slightly softer volumes than expected, while classifieds jumped 35 percent to $33.1 million as the company grew its market share of job ads. Other revenue climbed 10 percent to $14.1 million.

Macdonald said Trade Me has expanded its mobile team and built a suite of applications with a third of visits coming on mobile devices, twice the number a year earlier.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news