TradeMe has been the jewel in Fairfax Media's New Zealand financial results published today, with profits at the online trading site up 39 per cent for the year.
The result is so good that the Australian media company, which bought Trade Me for $700 million in 2006, must
now pay its founders $45.2m as part of an "earnout" component in the purchase agreement.
TradeMe's founder and chief executive Sam Morgan has stayed on to run the business.
Across its other New Zealand operations, results were fairly flat, with a 2.5 per cent increase in annual revenue and a 3.1 per cent rise in operating earnings.
Year-on-year job listings on TradeMe are up 31 per cent, motor vehicle listings are up 37 per cent and real estate listings are up 111 per cent.
Fairfax Media NZ said cost reduction measures are flowing through to its earnings.
Underlying publishing costs were "well contained" despite strong inflationary pressure on labour costs, the company said.
Earnings before interest, tax, depreciation and amortisation rose 3.1 per cent to $191.6m. Revenue rose 2.5 per cent to $592.8m.
Worsening economic conditions in New Zealand in the second half of the year affected employment and real estate advertising.
The company said further cost saving initiatives were in place for 2009.
"Fairfax Media is the largest and most diversified media company in Australasia, and we continue to be more competitive and successful than ever before," chairman Ron Walker said.
Fairfax Media Ltd, the parent, lifted its annual earnings by nearly 47 per cent following its merger in 2007 with Rural Press, and said advertising markets have slowed.
Fairfax's net profit for the year ended June 29 was A$386.9m ($479.7m), up 46.8 per cent from A$263.51m in the prior corresponding period.
The result, built on a 33.9 per cent revenue boost to A$2.91 billion, was a little lower than the median market expectation for a A$389.2m profit.
The company declared a final dividend of A10c per share, bringing the total dividend for the year to A20c.
- NZPA
