Trade Me Group is distributing $100 million via a 22 cents per share special dividend, as the online auction company announced it turned over more than $250 million for the first time to deliver a 3.9 per cent increase in net profit for the year to June 30 of $96.6 million.
The chairman of the Wellington-based company, David Kirk, said the board had "determined that the best use of $100 million of capital is to pay a special dividend to shareholders", having consistently accumulated cash and reduced debt since listing on the NZX nearly seven years ago.
"After the distribution, our gearing becomes similar to our Australian peers and we retain plenty of capacity to invest for growth," said Kirk, who also announced a final dividend of 10.5 cents per share, on top of the 9.1 cents per share paid as an interim dividend in March. Both the final and special dividends are fully imputed and will be paid on Sept 20.
Trade Me targets a ratio of 1x net debt to earnings before interest, tax, depreciation and amortisation, and that ratio had fallen to 0.4x at balance date. To fund the special dividend, the company will increase its debt levels with Westpac and Commonwealth Bank of Australia.
The result was achieved on revenue of $250.4 million, a record, and up 6.6 per cent on the year before. Ebitda rose 6.2 per cent to $163.8 million compared to the previous year.
Driving both revenue and earnings was Trade Me Motors, the New Zealand category leader for online vehicle sales and now the company's largest segment.
It saw a 12.7 per cent increase in revenue to $71.1 million, with a 22.5 per cent increase in revenue derived from listings by vehicle dealers.
Property listings revenue rose 10.2 per cent to $37.6 million, with growth of 12.9 per cent in revenue from listings by real estate agencies.
Job ads rose 14.1 per cent to deliver revenue for the year of $31.7 million. Revenue from its staple 'general items' category was steady, at $71.3 million, up just 1.3 per cent on the year.
Headcount rose to 594 from 546, at a slowing rate over the previous year, with staff costs increasing 11.4 per cent to $39.9 million. Web infrastructure costs were lower, down 2.6 per cent to $5.5 million, and promotion expenses were 6.8 per cent lower at $10.2 million. Capital expenditure rose 9 per cent to $27.0 million, reflecting increased capitalised development costs.
Kirk also announced Trade Me had made a "small investment" in a Wellington start-up, self-service funds management website Sharesies. The size of that investment is "commercially sensitive and not material", a company spokesman said.
Looking ahead, the company expects revenue growth of between 5 per cent and 8 per cent in the current financial year, with ebitda showing similar growth and capex similar to last year's, at around $30 million.
Trade Me shares closed at $4.71 yesterday, having fallen 2.8 per cent over the last year.