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

 


Trade Me profit growth slows in 2014

Trade Me profit growth slows in 2014, forecasts 'subdued' earnings for 2015

By Tina Morrison

Aug. 20 (BusinessDesk) - Trade Me Group, New Zealand's largest online auction site, posted slower profit growth for 2014 and warned earnings would remain "subdued" in the coming year as it reinvests in its business.

Trade Me profit rose to $80.1 million, or 20.2 cents a share, in the 12 months to June 30, from $78.6 million, or 19.84 cents, a year earlier, the Wellington-based company said in a statement. Revenue increased 9.7 percent to $180.1 million while expenses jumped 26 percent to $51.4 million.

Profit growth has slowed since the company was spun out of Fairfax Media in 2011 in an initial public offering. The latest year's 1.9 percent increase in profit lags 2013's 4 percent gain and an 8.4 percent pace in 2012. The company today forecast another year of "subdued" earnings growth with revenue forecast to increase at low double-digits and another year of "significant investment" as expenses rise from adding more staff and it spends more on promotion to position the business for longer term expansion.

"We expect to grow revenue and earnings before interest, tax, depreciation and amortisation over the coming year but our focus will be on improving the products we offer, strengthening our sales and account management and ensuring stronger growth in the medium to long term," chief executive Jon Macdonald said.

Trade Me posted a 4 percent increase in annual Ebitda to $128.7 million, ahead of the $125.8 million mean analyst estimate compiled by Reuters. The company is forecast to increase Ebitda by 3.9 percent to $133.7 million in the 2015 financial year, according to the Reuters estimates compiled before today's announcement.

In Trade Me's general items auction business, revenue declined 1.1 percent to $64.8 million as the company struggled to grow its general marketplace. Its classified advertising unit increased revenue 23 percent to $85.6 million as property advertising revenue increased 12 percent, motor vehicle advertising increased 29 percent and job advertisements advanced 26 percent. The acquisition of Treat Me and LifeDirect helped increase 'other' revenue by 2.8 percent to $29.7 million.

Trade Me will pay a final dividend of 8.4 cents a share on Sept. 23, taking the annual dividend to 16 cents, compared with 15.8 cents last year.

The company's shares last traded at $3.52, and have declined 13 percent so far this year, lagging an 8 percent gain in the benchmark NZX 50 Index. The stock is rated an average 'hold' according to analysts polled by Reuters.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news