Chief executive Jon Macdonald said today that the multi-year period of accelerated reinvestment in people, product development, marketing, and sales, had set the company up for success over the medium to long term.
The investment paid off in the latest year with earnings before interest, tax, depreciation and amortisation up 11 per cent to $155.7 million and net operating profit up 12 per cent to $93 million. However Macdonald warned that the pace of growth wouldn't be sustained this year as the company ramps up investment.
"Looking ahead to F18, we expect total revenue growth similar to that reported in F17, however a soft property listing market means there is some downside risk," Macdonald said. "With our targeted investment plans, we intend to invest at a rate slightly above revenue growth in F18, but we still expect to deliver year-on-year ebitda and operating NPAT growth in F18, albeit at lower growth rates than F17 due to that higher level of investment."
In the latest year, Trade Me increased its staff numbers to 543 from 509, and today it signalled plans to expand its team in Christchurch with the aim to hire about 30 tech staff over coming months.
Trade Me's general marketplace business lifted ebitda 7.2 per cent to $52.1 million, as revenue advanced 7.2 per cent to $70.4 million, more than double the 3.5 per cent revenue growth a year earlier.
Macdonald said the unit had benefited from the introduction of buyer and seller protection and the company was focused on making trading easier with product enhancements such as Afterpay and its 'book a courier' service.
Its classified business, which includes motoring, property and jobs, boosted ebitda 15 per cent to $86.8 million, while revenue lifted 11 per cent to $125.5 million as it benefited from improved products and strong growth in premium revenue.
Macdonald noted jobs was best performer, boosting revenue 25 per cent, while motors revenue advanced 8.2 per cent and property revenue lifted 7.3 per cent.
Trade Me chair David Kirk noted the company faces competition from global rivals such as Amazon in its marketplace business, with the US company slated to establish operations in Australia later in 2018.
While Trade Me won't be able to match Amazon for product breadth or on price for all products, Kirk said the Kiwi company's local brand, the trust it has built with New Zealanders over the last 18 years and its local network economics will remain powerful competitive advantages.
Trade Me will pay a final dividend of 10 cents per share on Sept. 19, taking the total annual dividend to 18.5 cents, up 10 per cent from the year earlier.
The company's shares last traded at $4.84 and have shed 3.4 per cent this year.
