Shares in Trade Me Group, which owns New Zealand’s largest auction website, headed for a record decline after the company said earnings growth will slow.
The stock fell 5.5 percent to NZ$4.44 at 3:18 p.m. in Wellington, the most since it listed in December 2011 and putting it on course for its lowest close since Feb. 25. Earlier today, the company said full-year net income rose 4 percent to NZ$78.6 million ($62 million) on sales of NZ$164.1 million, which climbed 15 percent.
In the coming year, “we expect to grow top line revenue and bottom line earnings, but these will reflect slower growth than we’ve recorded this year while we focus on reinvestment in the business,” Chief Executive Officer Jon Macdonald said in a statement.
Trade Me was founded in 1999 by then 23-year-old Sam Morgan when he couldn’t find a heater to buy on the Internet, according to Trade Me’s company history. It was bought in 2006 for NZ$750 million by Australia’s Fairfax Media Ltd. (FXJ), which then sold its shares in the company in stages for a net A$1.04 billion ($940 million).
Trade Me, which lists goods from books to antiques to real estate, said today it has agreed to buy online insurance comparison website LifeDirect for an undisclosed amount.
“It fits well with our core purpose of connecting two parties to undertake a transaction or form a relationship,” Macdonald said. “LifeDirect is an excellent business with a strong team, has a lot of potential for growth, and we think we can add a lot of value as a source of new customers.”
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