Trade Me Group is distributing $100 million via a 22 cents per share special dividend, as the online auction company announced it turned over more than $250 million for the first time to deliver a 3.9 per cent increase in net profit for the year to June 30 of $96.6 million.
The chairman of the Wellington-based company, David Kirk, said the board had "determined that the best use of $100 million of capital is to pay a special dividend to shareholders", having consistently accumulated cash and reduced debt since listing on the NZX nearly seven years ago.
"After the distribution, our gearing becomes similar to our Australian peers and we retain plenty of capacity to invest for growth," said Kirk, who also announced a final dividend of 10.5 cents per share, on top of the 9.1 cents per share paid as an interim dividend in March. Both the final and special dividends are fully imputed and will be paid on Sept 20.
Trade Me targets a ratio of 1x net debt to earnings before interest, tax, depreciation and amortisation, and that ratio had fallen to 0.4x at balance date. To fund the special dividend, the company will increase its debt levels with Westpac and Commonwealth Bank of Australia.
The result was achieved on revenue of $250.4 million, a record, and up 6.6 per cent on the year before. Ebitda rose 6.2 per cent to $163.8 million compared to the previous year.
