Online marketplace Trade Me has seen revenue jump 7.3 per cent to a record $132.2 million over the half year to 31 December 2018 off the back of its classified business, which grew 12.9 per cent to $77.1 million.
“The underlying performance of Trade Me was very strong,” Trade Me chief executive Jon Macdonald said, noting the Trade Me Property category saw improved revenue of 26.3 per cent year-on-year.
“We’ve continued to experiment with discounts and special offers for sellers contemplating selling their secondhand items. We’ve run over 150 targeted promotions this year, generating $6.5 million in GMS and 300,000 additional listings onsite.”
The retailer’s net profit, however, fell to $44.4 million due to a one-off cost related to recent private equity offers and a Scheme of Arrangement with Apex, which the business said is progressing to plan.
Trade Me expects to send information to shareholders in the coming weeks regarding the private buyout offer, and will not pay out an interim dividend due to the arrangement.
“This year is a bit different for Trade Me with a Scheme Implementation Agreement in place with Apax,” Trade Me chairman David Kirk said in a note to investors, noting that this trading update could inevitably be the business’ last results announcement.
The acquisition deal will see Apax pay $6.45 per share, which represents a 27 per cent premium on the brand’s value, and implies an equity value of $2.56 billion.
As for FY19, the business expects revenue growth of approximately five to eight per cent above the prior year, with operating profit after tax to grow at a similar rate.
Macdonald explained that, while the Property category performance had been “exceptional”, and should continue into the second half of FY19, the motor vehicle market had been weak between November and January, which could impact Trade Me Motors.
“We remain confident of the momentum in the Trade Me business, and should the business continue in its current form, we still anticipate that we will be in the top half of the five to eight per cent range for growth in both revenue and operating profit for the year,” Macdonald said.
