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Trade Me beats first half profit forecast

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Wed, 22 Feb 2012 10:33a.m.

Net profit was $36.4m, up from $34.6m a year earlier

Net profit was $36.4m, up from $34.6m a year earlier

Online auction site Trade Me beat its pretax profit forecast by 2.2 percent as it attracted more sales of new goods through its platform.

Earnings before interest and tax were $49.7 million in the six months ended December 31, beating the $48.6m forecast in the prospectus for its initial public offering last November, the Wellington-based company said.

Net profit was $36.4m, up from $34.6m a year earlier. Revenue grew 13 percent to $70m, beating $69.6m guidance in the prospectus.

"The core general items marketplace performed in line with expectations, while in the classified businesses, the results were a little stronger than we'd anticipated," chief executive Jon Macdonald said.

"It's good to deliver on the numbers we forecast in the IPO offer documents, especially given the backdrop of broader economic uncertainty over the past few months."

Trade Me floated on the NZX and ASX last November after Fairfax sold a 34 percent stake in an initial public offering.

The online auction site said it's targeting new goods sales, which grew consistently through the period and made up 40 percent of items sold.

Mr Macdonald said Trade Me was working with several parties to help integrate retailers on to its platform.

Trade Me didn't declare an interim dividend, and said it expects to pay 6.8 cents per share in the full year, and a first-half return of 7 cents per share in the 2013 financial year. It paid out or authorised $40.2m in the period, according to the statements.

Trade Me kept its earnings guidance from the prospectus, and is targeting profit of $65m in the full year on revenue of $144.8m.

The company joined the benchmark NZX 50 Index this week. Its shares have climbed 17 percent from their sale price of $2.70 in November to $3.16 on Tuesday.

 
NZN
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