Online marketplace and classified advertising business, Trade Me, posted a 6.5 per cent drop in net profit to NZ$74.9 million in the year to June 30 due to a one-off impairment charge.
Excluding the one-off impairment charge, underlying profit was up 3.5 percent year-on-year to NZ$83.0 million.
The group posted a 9.2 per cent increase in revenue to NZ$218 million on the year. Earnings per share was 18.87 cents with a fully imputed final dividend of 9.0 cents per share to be paid in September.
According to Jon Macdonald, Trade Me CEO, the one-off goodwill impairment charge was made in connection with its small online dating business FindSomeone.
“Over the last couple of years, FindSomeone has come under pressure from international competitors, which has seen financial performance decline,” said Macdonald.
“Relative to our other businesses, FindSomeone lacks scalability and upside potential so we’ve diverted resources to the large opportunities within our core businesses.”
General Items marketplace saw a revenue growth after two years of 3.5 per cent year-on-year to NZ$65.7 million.
Macdonald said the consistent sales growth observed in the first half of the year had continued and in the second half of F16, revenue in the segment increased by 7.0 per cent year-on-year.
“The key metric of gross merchandise sales has been heading in the right direction for the last 15 months in this business, which is great to see,” he said.
Trade Me Property reported a 15.9 per cent year-on-year lift in revenue; Trade Me Motors delivered another solid increase in revenue of 11.2 per cent; Trade Me Jobs a 14.6 per cent increase; and Other segment saw an 8.1 per cent increase.
Macdonald is expecting total revenue in F17 to grow at a similar rate to F16 in percentage terms.
“We expect expense growth for the F17 full year of circa 10 per cent as our recent period of investment draws to completion. This will deliver year-on-year EBITDA and operating NPAT growth rates in excess of F16,” he said.
He said the profit uplift was set to be delivered by the General Items marketplace and Classified businesses, driven by the increasing ease-of-use of products and converting on premium revenue opportunities.
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