Trade Me posts $75.6m profit
Trade Me shares have fallen 3.5 per cent in morning trading to $3.83 despite the company posting a $75.6 million profit for the year to the end of June, beating its prospectus forecast.
Reported revenues were slightly lower than forecast, which could exacerbate lingering concerns over the company's ability to grow the business.
However, chief executive Jon Macdonald said that was because of a change in the way Trade Me accounted for some commissions and after taking that into account, revenues were slightly higher than it had predicted.
Trade Me also announced it has bought Tradevine, which has developed cloud-based inventory management software, to strengthen its business selling new goods online. The price was less than $2m, Macdonald said.
Today's profit, which included a $3.3m gain on its $11.5m acquisition of vehicle listings company AutoBase, was just over 10 per cent higher than its forecast of $68.7m.
Trade Me said it would pay a 7.8 cent annual dividend - 15 per cent higher than promised.
Revenues totalled $142.5m, which was slightly shy of its $144.8m prospectus forecast.
Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 11.3 to $110.4m, 4.7 per cent higher than forecast. Expenses were $35.8m, significantly down on the expected figure of $39.9m.
Chief executive Jon Macdonald said there had been "varied levels of strength" across Trade Me's portfolio but no big surprises.
"Our core 'general items' marketplace performed in line with our expectations," he said. Trade Me's classifieds businesses, which comprises Trade Me Motors, Trade Me Property, and Trade Me Jobs, all performed strongly, he said.
However, display advertising revenues were lower than forecast and daily deals site Treat Me "came in below a bullish forecast".
Trade Me chairman David Kirk said the results were good to see given the "variable economic conditions".
"The business has made a smooth transition to life as a public company. We've delivered on the numbers set out in the IPO documents back in December and turned in another year of record profit. We're looking forward to issuing our first ever dividend as a listed company in September."