Bartercard float to boost membership

By KARYN SCHERER

New Zealand's biggest trade exchange is aiming to double its membership over the next two years, as part of an aggressive drive to encourage more businesses to barter.

Bartercard plans to spend some of the $A20 million ($24 million) it hopes to raise from a transtasman float on a marketing campaign to encourage thousands of new members to join. It is also hoping to use the money to develop online trading.

The Queensland-based company has signed up more than 3600 members since launching in New Zealand seven years ago, and aims to sign up a further 2500 by the end of next year, according to a prospectus issued in Australia.

The prospectus shows Bartercard's New Zealand subsidiary is enjoying steady growth in new memberships and in the amount of business it is brokering.

Over the past two years, it has more than doubled the amount of business it handles to $84 million.

It is predicting transactions will top more than $120 million this year, and $180 million next year.

The company earns revenue from a mixture of membership fees, commissions and franchise licences.

Its revenue has increased from around $1 million two years ago to just under $5 million last year.

But the cost of building the business here means it has yet to make a profit and has accumulated tax losses of $2.69 million.

Managing director Roy Netzer said yesterday that the company expected to turn a profit this year.

"We roughly broke even in the first quarter, which means from here on the only way is up," he said. "I'd be extremely surprised if we're not delivering good profits and solid growth from now on."

Founded in Queensland in 1991, the trade exchange was brought to New Zealand in 1993 by a private investor. It was sold back to the Australian company last year.

While it has several rivals in Australia, there is only one other main trade exchange in New Zealand, known as Itex.

Itex launched here two years ago and is believed to have around 500 members.

Chief executive Murray Clark said Itex believed its rival's float was good for the trade exchange industry.

"I think it will create a wider awareness for barter in general," he said.

Since setting up its first office in Auckland, Bartercard has spread to Whangarei, Hamilton, Rotorua, Tauranga, Wellington, Christchurch and Dunedin and now employs around 100 staff.

It plans to open two new offices, in Palmerston North and Hawkes Bay, in the next year.

It is pinning its hopes on the internet to help reduce transaction costs, and plans to offer an online booking service by the end of the year.

Nevertheless, it is predicting just 10 per cent of its New Zealand members will be trading over the internet by the end of next year.

The offer of 16 million shares at A125c opens to the public today and is due to close on May 29. The company is expected to begin trading on the Australian stock exchange on June 8.