Trade Me Group's first-half profit was largely unchanged from the year earlier, although New Zealand's largest online auction site signalled earnings should pick up in the future as it emerges from a period of higher investment.
Profit edged up 0.3 percent to $38.5 million in the six months ended December 31 from a year earlier, the Wellington-based company said in a statement. Revenue rose 8.9 percent to $105.6 million while expenses increased 19 percent to $38.3 million.
Trade Me signalled it's moving out of a period of higher investment which has dented its earnings growth. Its 19 percent expense growth in the first half is a pull back from the 28 percent increase a year earlier, while hiring slowed to 37 full-time equivalents from 53. The company said it expects a "moderately greater profit growth rate" in the second half of this financial year.
"Our investment in areas like product development, new ventures and bolstering our teams has always been focused on positioning Trade Me for greater growth opportunities in the future," said chief executive Jon Macdonald. "The business is demonstrating good momentum, and we have lots of opportunity in front of us - both in our core business and through extending into new things."
The company is expected to post profit of $82.3 million this financial year, up from $80.2 million in 2015, and $80.1 million in 2014, according to a Reuters survey of analysts expectations. That's expected to step up to $91.2 million next financial year, according to the poll.
Trade Me will pay a first-half dividend of 7.8 cents per share on March 22, up from 7.7 cents a year earlier.
Chief financial officer Jonathan Klouwens is leaving the company in three months for a role in investment banking, the company said today.
Its shares last traded at $3.84. The stock has shed 8.1 percent so far this year, a bigger decline than the 3.9 percent drop in the benchmark S&P/NZX 50 Index.
The stock is rated a 'hold' according to the average recommendation of eight analysts compiled by Reuters.