The Trade Me Group Ltd (ASX: TME) share price is flat today after the group revealed its results for its first-half year period ending December 31 2016. Below is a summary of the results with all figures in NZ$ and comparisons to the prior corresponding period.
- Revenue of $114.9m, up 8.8%
- Adjusted EBITDA of $75.7m, up 14.2%
- Net profit of $46.1m, up 19.6%
- EPS for H1 2017 11.6cps, up from 9.71cps
- Interim dividend of 8.5cps to be paid March 21
- Forecast for full year EBITDA and operating profit growth rates in excess of FY16
Former rugby world cup winning All Black captain turned digital entrepreneur and Trade Me chairman, David Kirk, said of the result: "The return to profit growth in the first half of this year marks the successful completion of our multi-year investment phase. We've strengthened the business and set it up well for further growth".
Trade Me is an online marketplace similar to eBay in that it lets New Zealanders buy and sell everything from houses, cars and boats to second-hand rugby boots.
It also offers flat sharing, jobs, dating, gardening, and other freelance services, among many others, with its business operations separated between 'classifieds' and 'general items'. In that sense it enjoys similar network effects to the likes of SEEK Limited (ASX: SEK) and REA Group Limited (ASX: REA).
in New Zealand Trade Me is only behind the likes of Facebook and Google in terms of website popularity and its ultra-strong network effects mean it should be able to deliver consistent profit growth to investors in the years ahead. The stock has nearly doubled in value over the past five years in part as a result of the reinvestment phase referenced by its rugby star chairman.
Its attractive investment characteristics are no secret though, with it selling for 22x annualized earnings per share at its NZX-listed stock price of NZ$5.06. The ASX-scrip sells for A$4.74. I would keep this stock on the watch list as it may offer steady growth and dividends long into the digital future.
