Trade Me Group, New Zealand's largest online auction site, posted slower profit growth in the first half of its financial year as increased investment ramped up costs and only one of its core businesses lifted earnings.
The Wellington-based company said net profit rose 1.1 per cent to $38.4 million in the six months ended December 31, slower than the 2 per cent increase in the same period last year, and the 2.7 per cent pace the year earlier. Expenses rose 28 per cent to $32.3 million, outpacing a 13 per cent rise in revenue to $96.9 million.
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Trade Me employed an extra 69 people in the past six months, taking its total headcount to 424, as it strives to improve its service to grow future profits. The company expects to hire a further 62 people in the remainder of the financial year, and says its full-year result will show "elevated" expenses, a "low double-digit" revenue increase and "subdued" growth in earnings before interest, tax, depreciation and amortisation.
"We're continuing to invest in people, product development and marketing, as well as ramping up our sales and account management capability," said chief executive Jon Macdonald. "We are convinced this is the right approach and believe that investment now will result in stronger market positions and great growth opportunities for Trade Me in the future."
