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Trade Me first-half profit climbs 16pc

NZ Newswire logoNZ Newswire 22/02/2017 Paul McBeth

Trade Me lifted first-half profit 16 per cent signalling an end to an investment phase for the online marketplace and business, although the result fell just short of analyst expectations.

Net profit rose to $46.1 million in the six months ended December 31, from $38.5m a year earlier, the Wellington-based company said on Thursday.

Revenue gained 9 per cent to $114.9m and earnings before interest, tax, depreciation and amortisation were up 12 per cent to $76.1m, just missing Forsyth Barr's forecast for operating earnings of $78m on revenue of $117m.

"The return to good profit growth in the first half of this year marks the successful completion of our multi-year investment phase," chairman David Kirk said.

"We've strengthened the business and set it up well for further growth."

In 2013 Trade Me embarked on freshening up an offering that was becoming dated while at the same time facing increased competition and the growing importance of mobile technology.

It did so by beefing up staff numbers, introducing new products such as its recently announced buyer protection programme, and investing in the likes of peer-to-peer lender Harmoney.

Trade Me also quit businesses that were "increasingly difficult to justify prioritising time and money", given other opportunities. It sold accommodation aggregator Travelbug and online engine Bookit, with $497,000 of gains from those sales.

The company affirmed annual guidance for ebitda and operating profit growth rates to exceed the 2016 rates of 4.5 per cent and 3.5 per cent respectively.

Its shares last traded at $5.07 and have gained 21 per cent over the past 12 months.

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