Trade Me top job decision close
Trade Me chairman David Kirk has announced that New Zealand’s largest internet auction website is in the final stages of choosing who will become the next chief executive.
“We’re far advanced in the process,” he says. “We’re down to a small number of potential replacements, both of whom we think could do the job and we need to make our final choice.”
After being asked whether the replacement will take place by the end of the year, Kirk adds: “We’re not 100 per cent sure on that. We may well be able to announce that. It will depend on some of the things they have going on in their lives as well, so we may or may not be able to do it before December 31 but we are close.”
Jon Macdonald announced earlier this year he was planning to leave the company within six months after 15 years with the company and a decade as chief executive.
Motorcentral decision too slow
During the chairman’s address to the company’s annual general meeting, Kirk discussed his disappointment regarding the Commerce Commission preventing the purchase of Motorcentral earlier this year.
“We disagree with the commission’s assessment and believe it over-complicated the analysis, but we do accept its role as the referee in these matters,” he says.
“What we found frustrating was the length of time it took to assess the issues and come to a conclusion. It took eight months to come to a conclusion on our proposal to acquire a 16-person business and over two months more to release is written decision.
“That’s not acceptable in a business world, which is technology-based and fast-moving. In the interests of New Zealand business generally, the process of the Commerce Commission needs to improve.”
Impact of competitors
According to the National Business Review, Trade Me sees Amazon as an increasing threat. “We talk about multiple threats, Amazon being one of the larger ones,” says director Paul McCarney, co-founder and chief executive of Data Republic in Australia. “They [Amazon] have an exceptional engagement proposition in Prime.”
“We focus more on doing as good a job as we can running the business of Trade Me and doing as good a job as we can for our customers,” says Macdonald.
“We’ve found that over many years to be the best defence against competitors. While I know Amazon appears big and well-resourced, we have a good history of defending and seeing off big competitors, be they the e-Bays of this world. We’ve been up against, for example, Seek, in the case of Trade Me Jobs for years. We do a great job of servicing the New Zealand consumer and of defending our patch.”
Financial performance
In 2018, the financial performance of Trade Me continued to be strong. The company grew revenue by just under seven per cent year-on-year to $250.4 million. Earnings before interest, tax, depreciation and amortisation were up 6.2 per cent to $163.8m and net profit rose 2.3 per cent to $96.6m.
“We’re happy with the momentum we have in the business – especially the exceptional performance of Trade Me Property,” says Macdonald
“At our F18 results announcement in August 2018, we outlined expectations of F19 revenue growth of between five and eight per cent over F18. We also noted we expect operating profit after tax to grow at a similar rate. This guidance remains unchanged and, given current momentum, we would expect to be in the top half of this range for both measures.”
