Trade Me is celebrating another year of what it is calling ‘record revenue and profit’ for FY18, with increases up in all areas of the business.
The company’s revenue has increased to $250.4 million, a 6.6 year-over-year (YoY) growth rate from 2017’s figure of $234.9 million.
The company’s net operating profit reached $96.6 million, a 3.9% increase from 2017. Expenses increased 7.7% in 2018 – an increase from 2017 but still below FY15 and FY16 figures.
Earnings per share increased again to 24.33 cents, up from 23.76 cents last year and a fully imputed final dividend of 10.5 cents per share will be paid on 18 September 2018. In March 2018, Trade Me paid investors an interim dividend of 9.1 cents per share.
According to Trade Me chairman David Kirk, the 2018 results demonstrate another strong year for investors.
“It’s great to see our Classifieds businesses continue to grow strongly this year, and it was pleasing to see solid growth in new goods in our General Items marketplace too.”
Those Classified businesses include Trade Me Motors, Trade Me Property, and Trade Me Jobs. CEO Jon Macdonald says that the combined revenue growth from the three businesses as increased 12.3% YoY to $141 million.
Separately, Trade Me Motors gained a 12.7% YoY revenue increase, while Trade Me Property achieved 10.2% YoY revenue growth, and Trade Me Jobs increased YoY revenue at 14.4%.
“The team have been doing a fantastic job, coupled with a strong New Zealand employment market. They’ve also released Job Profiles this year, aimed at giving recruiters access to passive job hunters. We will continue to grow Profiles in F19, and the early signs are very encouraging with over 100,000 profiles live now and good feedback from our recruiter clients,” Macdonald says.
Across the company’s General Marketplace, revenue increased 1.3% YoY.
“The focus has been on making buying and selling as easy as possible. For example we released the ‘buy now, pay later’ payment product Afterpay to new goods sellers and buyers in September last year, and it’s now available on over three million listings onsite,” Macdonald explains.
“Early in 2018 we also changed our success fee model for professional sellers to encourage free shipping. Meanwhile our used goods business is concentrating on promotions and smarter pricing to stimulate sales growth.”
Trade Me has increased its staff count from 546 to 594 in the last year, with most employees based in Wellington. Its Auckland office now houses 150 employees and its Christchurch office is on the move next year.
Former Trade Me chief product and Technology officer Mark Rees returned to Xero this month, replaced by Simon Young.
Macdonald will be stepping down in December after 15 years with Trade Me.
“I’ve spent over a decade as the CEO of Trade Me and I felt in June that it was time for me to pass the baton.
“It’s been a pleasure working with so many passionate and talented people. I’m very proud of the business we’ve built together. Trade Me has a long and bright future, with more to do than ever, and now is a good time for someone with fresh eyes and a full tank of gas to take over.”
Trade Me is also continuing to invest in local firms. Its latest investment is in Wellington firm Sharesies, Sharesies is a firm that offers investment opportunities for all New Zealanders.
“We like their ambition of giving someone with $5 the same investment opportunities as someone with $500,000, and we think that making investing more consumer-friendly can do great things for New Zealand while opening up big revenue pools. This is also another step in us building out a vibrant New Zealand online ecosystem that ensures our growth in the long term,” Macdonald says.
Macdonald believes Trade Me is well placed to strengthen its core proposition, expand its business, and grow a ‘vibrant NZ online ecosystem’.
“In F19 we expect total revenue growth of between 5 - 8% over F18. We also expect operating profit after tax to grow at a similar rate in percentage terms.”