Trade Me’s interim financial results for the six months to 31 December 2017 have been released, reporting a record revenue of $122.7 million.
The online marketplace and classified advertising business had a greatly successful year, with a 6.8 percent year-on-year revenue increase and a 5.7 percent year-on-year EBIT increase.
Chairman David Kirk said Trade Me had delivered a great result to investors. “We’re pleased to report record revenue and a result in line with the guidance provided to investors in August and November last year.”
Kirk said the highlight was the stellar result from the classifieds segment, which delivered an increased revenue of 13.8 percent or $67.9 million, as well as an acceleration in growth on last year.
CEO Jon Macdonald said Trade Me Motors, the largest of the classified verticals, reported a superb revenue increase of 16 percent.
Trade Me Jobs also had a great performance, with revenue increasing by 18.6 percent. Macdonald said this was driven by “premium uptake and a series of product releases, including the introduction of promoted listings back in July and the recent roll-out of candidate profiles.”
Trade Me Property reported revenue growth of 6 percent in a soft listings market, with the premium revenue from agents listing properties for sale on the site increasing by 25.7 percent.
The three classifieds businesses now contribute 55 percent of Trade Me’s revenue.
Revenue in the general items marketplace business was up slightly, Macdonald saying, “The gross merchandise sales trend for used goods tracked down slowly, but was once again more than offset by the continued strength in new goods which was up five percent on last year.”
Macdonald said that a lot of work is being done to stimulate stronger growth in the marketplace, with a focus on new goods.
“The Afterpay instalment payment option launched in September 2017 is now available on over 60 percent of new goods onsite, we’ve completed our first subscription shipping experiment, rolled out ‘Quick List’ functionality in the iOS and Android apps, and held two success fee-free weekends.”
Trade Me has also recently announced in January the change of model to increase free shipping from retailers operating on the site.
Overall listings were up 25 percent year-on-year, driven by increased selection of new items.
It seems that the threat of the ‘Amazon-apocalypse’ has not yet sunk its claws into Trade Me’s success, something to which Macdonald credits locally-focused ambitions.
“We ourselves don’t have these big global ambitions, whereas what we’ve found is that these international players are very rational as to how they work. So, the reality is that New Zealand isn’t at the top of their list of priorities. It would be pretty crazy if it was, so I think that gives us an edge, or rather a basis, to compete.
“Amazon is a great business, certainly it has its own strengths and certainly it is making its presence felt here… [But] there is room for us all, and I’m very confident that we can continue to grow and succeed.”