Trade Me’s earnings growth set to slow

New Zealand’s largest online auction site will likely see its earnings growth slow to about 8% in the coming year from a 12% pace last year.

Photo credit; David Antis on Flickr

Photo credit; David Antis on Flickr

The slow down is projected as the site reinvests in its business but it is also projected to pick up again in 2015 as those investments pay off.

Trade Me chief executive Jon Macdonald said he is comfortable with analyst estimates in a Reuters poll for earnings before interest, tax, depreciation and amortisation to rise 8.2% in the 2014 financial year, and accelerate to an 11 % pace in 2015.

Trade Me was the biggest disappointment in New Zealand’s 2013 reporting season, based on its stock price reaction, after it warned earnings growth would slow in the coming year as it bolstered its business to drive future profits.

The company’s shares have slid almost 4% since it reported earnings on August 21, and the stock is the third worst performer on New Zealand’s benchmark index the past month, having slid 8%. The stock was recently up 2% to $4.52.

“Fundamentally we are still very much a growth company,” Macdonald  said. “There’s an enormous amount of headroom that we have.”

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One Response to “Trade Me’s earnings growth set to slow”

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