Annual Report 2018

CEO's report

Dear fellow shareholder,

Thank you for your support as an investor in Trade Me.

The year to 30 June 2018 has been another great year for Trade Me. We’re very pleased to deliver another strong result to our shareholders, in line with our guidance to you over the year.

We operate in a competitive environment but we are stronger than ever and well placed to keep growing. Additionally, as signalled at our interim announcement in February, our revenue, operating EBITDA and net profit all increased year-on-year.

The numbers

In F18, Trade Me’s revenue continued to grow strongly to a new record of $250.4m, up 6.6 per cent on F17’s $234.9m. In the second half of F18, revenue grew by 6.4 per cent year-on-year.

Expenses grew by 7.1 per cent. Our Operating EBITDA for F18 was $163.8m, and up 6.2 per cent year-on-year. Trade Me’s net operating profit after tax was up 3.9 per cent year-on-year to $96.6m, comfortably ahead of last year’s net operating profit of $93.0m (which in turn was up 12 per cent on F16). We expect net operating profit growth to continue in the financial year ahead.

Earnings per share for F18 was 24.33 cents, up from 23.76 cents a year ago. A fully imputed final dividend of 10.5 cents per share will be paid on 18 September 2018. This follows on from the fully imputed interim dividend of 9.1 cents per share paid on 20 March 2018. We'll also pay a special dividend of 22.0 cents per share on 18 September.

Operating performance

The Classifieds continued to grow and enjoy success. Overall revenue across the three businesses was up 12.3 per cent year-on-year to $141.0m, ahead of the 11.3 per cent growth achieved in F17. We’re focused on improving the value of our depth products to customers (our depth products mainly help our customers to promote their own brands and their inventory).

Trade Me Motors had another fantastic year. Our largest classified business continues to be the market leader with a revenue increase of 12.7 per cent year-on-year (up on F17’s 8.2 per cent). Strong dealer depth product revenue growth was continued in F18, up 41.0 per cent year-on-year.

Trade Me Jobs continues to perform very strongly with revenue increasing by 14.1 per cent year-on-year. The team has been doing a superb job, and continue to focus on delivering benefits for customers. The revenue increase was driven by a 34.3 per cent increase in depth product sales.

We also released Job Profiles in November 2017, with the aim of providing recruiters with a database of passive job hunters to approach with relevant roles. So far we have over 100,000 profiles and counting, and in F19 we’ll continue to grow the database and improve the experience for recruiters.

Trade Me Property reported revenue growth of 10.2 per cent year-on-year. ‘For sale’ listing volumes continue to be challenging, in a tight property market.

Revenue from depth products sold to 'for sale' agency clients was up 38.2 per cent year-on-year, helped by the launch of our new Premium listing product. Premium listings provide better branding and visuals for both agents and vendors and we expect to see even greater uptake from agents in F19.

We’re pleased to see continued growth in our General Items marketplace business. Revenue was up 1.3 per cent year-on-year, following on from revenue growth of 7.1 per cent between F16 and F17.

In F18 we continued to focus on making the buying and selling process faster and easier. We introduced Afterpay for our new goods segment in September 2017, allowing sellers to offer interest-free instalment payments to buyers. Buyers get their goods immediately (and sellers are paid immediately) and then pay the item off in four instalments. Afterpay is now available on approximately three million new items on Trade Me.

In February 2018, we changed our success fee structure for professional sellers to encourage more low-cost shipping. Buyers have told us the cost of shipping is their biggest purchase barrier so we want to make shipping costs more transparent and generate more sales.

Our used goods team has been working on more promotions and flexible pricing tools to stimulate sales. We held our first success fee-free weekend in October and we’ve been targeting different customer groups with a variety of offers to stimulate activity since then.

In the Other category comprising our advertising, dating, insurance and payments businesses, revenue was down 2.3 per cent year-on-year. This decline is largely due to the divestment of our travel businesses at the end of 2017. We saw revenue in our Payments business (comprising Paystation and Pay Now) increase by 6.0 per cent year-on-year.

Investments and divestments

We’ve continued to look for opportunities to invest and divest in line with our vision to make life better for Kiwis through online experiences they love. We want to keep expanding our Kiwi ecosystem as we believe there is a collective strength in a whole of Trade Me offering that is greater than the sum of the parts. We’ll be pursuing opportunities in F19 to increase Trade Me’s ‘stickiness’ and help with continued growth.

In that spirit, we’re excited to announce a small investment in Wellington growth company Sharesies. We’ve got to know the team there over the last few months, and think they have enormous potential. We like their ambition of giving someone with $5 the same investment opportunities as someone with $500,000, and we think that making investing more consumer-friendly can do great things for New Zealand while opening up big revenue pools.

This is also another step in us building out a vibrant New Zealand online ecosystem that ensures our growth in the long term.

In July 2017, we announced our intention to acquire the cloud-based automotive dealer management platform, Motorcentral. After ten long months we recieved the Commerce Commission's full decision declining the transaction. We’ve chosen not to appeal, and have since signed commercial agreements with Motorcentral and we will work together to increase the value we provide to motor dealer customers.


We are proud of our strong, trusted, well-known and much-loved brand. Trade Me was named the eighth most influential brand in New Zealand by Ipsos in July 2017 and the sixth most trusted New Zealand brand by Colmar Brunton in September 2017.

We were honoured to receive one of the inaugural Privacy Trust Marks from the Office of the Privacy Commissioner. This was for our work in transparency reporting, an annual publication where we tell our members how their data is requested by Government agencies.


The number of staff at Trade Me has grown from 546 (514 FTEs) as at 30 June 2017 to 594 (561 FTEs) as at 30 June 2018. The majority of staff are still based in our Wellington headquarters, but we have more than 150 people in Auckland and have expanded our Christchurch office considerably over the last year from 11 to 28 people. We will be moving into new Christchurch premises in F19.

There are two changes to our Executive team coming up in the first half of F19. Our Chief Product and Technology Officer, Mark Rees, returned to Xero in August. I’d like to thank Mark for his contribution in the time he has been with us. Under his watch, we’ve seen great improvements in our product development and infrastructure.

Trade Me has a long and bright future, with more to do than ever, and it’s a good time to pass the baton to someone with fresh eyes and a full tank of gas.

Simon Young will step into Mark's place. Simon has been at Trade Me for seven years in a variety of roles, most recently as our Head of Product Development. 

The other change is my impending departure after 15 years with Trade Me, and over a decade as CEO. Back in June, I announced my intention to leave by Christmas 2018.

I'll have the opportunity to reminisce, as well as properly acknowledge the great support I've had over my long tenure, at the Annual Shareholder Meeting. 

It has been a privilege to work with so many passionate and talented people. I’m very proud of the business we’ve built together and all that we’ve accomplished. Trade Me has a long and bright future, with more to do than ever, and it’s a good time to pass the baton to someone with fresh eyes and a full tank of gas.

I’d like to thank the board and the team for all their help and support, and I’ll be leaving the business in good hands. I’ll be leaving with a lot of fond memories, and great affection for the people here.


Trade Me is a fantastic business, which will thrive in the coming years. I’d like to thank you, our shareholders, for the faith you’ve shown in us.

We are well-placed to execute on our strategic priorities – strengthening our core proposition, expanding our offer to extend our existing businesses, and growing a vibrant New Zealand online ecosystem.

In F19 we expect total revenue growth of between 5–8% over F18. We also expect operating profit after tax to grow at a similar rate in percentage terms.

These expectations are contingent on wider economic conditions, including employer and consumer sentiment, and real estate market volumes.


jon macdonald signature

Jon Macdonald
Trade Me Group Limited