Transtasman publisher Fairfax Media was pleased with nearly 8 per cent first half earnings growth from its New Zealand publications, and a 40 per cent rise at Trade Me.
The online auction house delivered a $4.8 million performance payment to Sam Morgan and other shareholders last year after
the sale to Fairfax, and looks likely to present them with much, if not all, of the remaining earn-out payment this year.
"We are expecting, in fact it's almost certain ... that we will pay an additional earn-out component because they'll hit their announced targets," Fairfax chief executive David Kirk said.
Fairfax has taken a charge of $31 million in its accounts to cover potential probable payments.
It was agreed that the original Trade Me owners would make $10 for every dollar it earned over $45 million in the last financial year, and the same for every dollar earned over $60 million this year.
For the six months ended December 31, Trade Me posted earnings before interest, tax, depreciation and amortisation (ebitda) of $32.6 million.
Fairfax's New Zealand publishing arm, including the Dominion Post and the Press, posted ebitda of $94.9 million, up 5.1 per cent, although ebitda was up 7.8 per cent accounting for one less weekend in 2008.
New Zealand revenue rose 3.9 per cent to $301.8 million, while costs rose 3.2 per cent.
That compared with Fairfax group revenue up 39.5 per cent to A$1.44 billion ($1.65 billion)..
"That's a strong performance. The real estate market continued to grow strongly, we saw a rebound in employment and in display advertising, travel, entertainment and retail were the strongest sectors for us," said Kirk. "Economic growth in New Zealand was relatively subdued, but it wasn't weak either - it was pretty middle of the road to slightly below average overall aggregate performance."
- NZPA
