Trade Me, the online auction site controlled by Fairfax Media, beat its pretax profit forecast by 2.2 percent as it attracted more sales of new goods through its platform.
Earnings before interest and tax were $49.7 million in the six months ended Dec. 31, beating the $48.6 million forecast in the prospectus for its initial public offering last November, the Wellington-based company said.
Net profit was $36.4 million, or 9.19 cents per share, up from $34.6 million, or 8.75 cents per share, a year earlier. Revenue grew 13 percent to $67 million, beating $68.6 million guidance in the prospectus.
“The core general items marketplace performed in line with expectations, while in the classified businesses, the results were a little stronger than we’d anticipated,” chief executive Jon Macdonald said in a statement. “It’s good to deliver on the numbers we forecast in the IPO offer documents, especially given the backdrop of broader economic uncertainty over the past few months.”
Trade Me floated on the NZX and ASX last November after Fairfax sold a 34 percent stake in an initial public offering in a bid to raise funds for debt repay and resume dividend payments to its own shareholders.
The online auction site said it’s targeting new goods sales, which grew consistently threw the period and make up 40 percent of items sold through the platform. Macdonald said Trade Me is working with several parties to help integrating retailers on to its platform.
The retail sector has been struggling in the past 18 months as households spurn new debt for consumer purchases, instead using historically low interest rates to repay bank debt. That’s encouraged retailers to seek low-cost distribution models as a means to cut costs.
Trade Me didn’t declare an interim dividend, and said it expects to pay 6.8 cents per share in the full year, and a first-half return of 7 cents per share in the 2013 financial year. It paid out or authorised $40.2 million in the period, according to the statements.
Fairfax Media took $529.5 million from the Trade Me float, selling 134.6 million shares and saddling the auction site with $166 million of new debt. It took a $220 million dividend in the 2011 financial year to cancel money it owed to its subsidiary.
Trade Me kept its earnings guidance from the prospectus, and is targeting profit of $65 million in the full year on revenue of $144.8 million.
The company joined the benchmark NZX 50 Index this week. Its shares 1 percent to $3.16 yesterday, and have climbed 17 percent from their sale price of $2.70 in November.