Trade Me Group has posted a slower pace of earnings growth in the first half of its financial year as New Zealand’s largest online auction site invests in marketing and more staff.
Net profit rose two per cent to $NZ38 million ($A35.30 million) in the six months ended December 31, slower than the 2.7 per cent growth in earnings in the year earlier period, the Wellington-based company said in a statement on Wednesday.
Profit was below First NZ Capital’s estimate of $NZ40.9m. Revenue increased seven per cent to $NZ85.7m while expenses rose 19 per cent to $NZ25.2m.
Trade Me employed an extra 50 people in the past six months, taking its total headcount to 350, as it strives to improve its website, adding more services and functions, in order to grow future profits.
The company will probably increase full-year profit seven per cent this year, before picking up to an 11.2 per cent pace in 2015, according to analysts polled by Reuters.
“We’ve embarked on a period of re-investment which will impact short-term earnings growth but ensure the company’s long-term growth and success,” said chairman David Kirk.
“We are convinced this is the right approach for Trade Me and we believe investment now will result in stronger market positions and greater growth opportunities in the future.”
Investment in the business had gone well and Trade Me would continue to “invest assertively” in the second half of the company’s financial year, Mr Kirk said.
Trade Me will pay a first half dividend of 7.6 NZ cents a share on March 25.
The shares last traded at $NZ4.05, and have slipped 0.3 per cent this year.