Trade Me’s finances reveal debt load and equity payouts to executives

Trade Me's finances reveal an increase in revenue and debt. Photo / Bay of Plenty Times

Trade Me’s debt burden blew out 55 per cent in the last financial year with the size of its borrowings hitting $1.6 billion, as it paid out $7.6 million in incentive payments and exercised equity options to the senior leadership team.

Financial statements filed to the Companies Office under holding company Titan Parent New Zealand, confirmed to be Trade Me Group, showed the online marketplace made a net loss of $2.3m, from revenue of $348.6m, in the 12 months to June 2022.

When including the benefit of exchange rates and hedging on cash positions, it made a comprehensive net profit of $28.5m, an increase from the previous year’s $6.3m net profit.

The Herald reported this week that Trade Me’s private equity owners, London-based Apax Partners, were looking to sell it off, eyeing a preferred partial dual-listing on the New Zealand and Australian stock exchanges.

Apax bought Trade Me in early 2019, paying $2.56b - $6.45 a share - to take it private.

That year, Trade Me made a $58.1m net loss, with its debt burden sitting at $1.4b, its 2019 financial statements showed.

The size of loans on its books had increased to $1.6b in two years, according to its most recent statements, with the majority of that ($958.6m) being a line of credit from the United States.

Its loans, including the US tranche, were refinanced in October 2021, despite the company not breaching any of its debt covenants.

A breakdown of Trade Me’s revenue showed its classified division, which is made up of its motor, property and job advertisement listing fees, was its biggest money maker, drawing in $225.6m in the most recent financial year.

Its marketplace fees, which are collected when a member sells an item on Trade Me, pulled in $89.7m.

The most recent financial report also revealed Trade Me initiated perks for senior leaders, launching a share option plan in the 2022 financial year.

That added $2.3m to its compensation bill, totalling $7.6m.

“With the terms of the plan, as approved by the board of directors, members of the [senior leadership] team may be granted [share] options based on the performance of the group and/or the years of employment,” the 2022 annual report said.

The financial statements also showed how much Trade Me had spent on acquisitions while in private hands, and how much its other investments were worth.

It paid $18.3m to buy Property NZ, the online property data service in the 2022 financial year.

Trade Me also owned 13.5 per cent of the stock trading app Sharesies - it made a $3.3m annual loss on that investment in the year.

Its 15.8 per cent stake in My Auto Shop, a mobile mechanic business, was also loss-making.

A 45 per cent holding in the automotive creative agency AdTorque Edge NZ was the only joint venture making money for Trade Me.