Expansion and acquisitions are at the forefront of Trade Me’s plans for this financial year, but chief executive Jon Macdonald is aiming for strong profit growth come 2016.
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Trade Me reported a small up tick in profit on Wednesday, buoyed by strong growth in its classifieds business. Net profit for the 2014 financial year rose 1.9 per cent to $NZ80.1 million ($72.5 million).
Trade Me shares are up 2.2 per cent to $3.25 in early afternoon trade.
The New Zealand-based company, whose majority stake was sold by Fairfax Media, publisher of The Australian Financial Review, in 2012, had revenue growth of 9.7 per cent to $NZ180.1 million in the 12 months ended June 30.
Mr Macdonald said the company would further invest over the next year.
In the last financial year, Trade Me acquired health insurance comparison website LifeDirect and online automobile vehicle check service MotorWeb, for $NZ4 million and $NZ19.5 million respectively. Trade Me will pay a further $NZ4.1 million for LifeDirect over the next two years.
“I expect we will continue to find and, either partner with or acquire, interesting start-up businesses that provide us a great way to leapfrog into a new area. We continue to be pretty active when it comes to looking at exciting businesses,” Mr Macdonald said.
“Last year and this coming year is very much about reinvestment. I think beyond that, I expect to see a return to greater levels of profit growth.”
The online marketplace and classifieds website will pay a final dividend of NZ8.4¢, payable on September 23.
“While we’ve delivered record revenue and profit, the focus for this year has been on reinvestment and hard work,” chairman David Kirk said.
“We have a great company, and we’ve dedicated our attention to positioning the company for longer term growth.”
Revenue growth in Trade Me’s classifieds business surged 22.8 per cent to $NZ180 million, with job and motor ads being the biggest drivers. The company said property classifieds were also picking up. Revenue for general items fell 1.1 per cent.
“Trade Me Property remains the most popular means for New Zealanders to find houses, with three times the audience of its nearest competitor,” the company said in its results release.
