Trade Me to meet prospectus dividend target for FY
BUSINESSDESK: Trade Me, the auction site part owned by Fairfax Media, says it will meet its prospectus forecast for dividends in the second half of the year even though a economic upturn has not materialised.
The shares fell after investors looking for a more bullish outlook were disappointed.
The Wellington-based company says its guidance for the final six months of calendar 2012 is unchanged for dividends and earnings from the prospectus last November.
"Overall trading volumes are stable, but the broader economic upturn forecast at IPO time has not materialised," it says in a statement accompanying the speech notes to the annual meeting.
"Earnings guidance for the six months to 31 December 2012 is in line with the prospectus, as always this is contingent on activity levels in the run-up to Christmas."
The shares fell 3.8% to $4.28 on the NZX and have gained 48% this year.
The company paid a dividend of 7.8 cents in September and said its forecast for the final six months of the year would be met. It expected to pay a final dividend of 6.8 cents per share in respect of full-year 2012 and 7 cents for the first half of fiscal 2013 – that is, the six months to December 31.
The comments echo those of chairman David Kirk in the annual report that the economy was "fragile" in the short term and the company remained focused on meeting its prospectus targets.
Trade Me first listed in December 2011 on the NZX and ASX after Fairfax Media sold down its stake to first 66%. It subsequently sold down to 51% as it reaped available funds to help shore up its publishing empire.
In his speech today, Mr Kirk said the deal for Fairfax Media to buy the auction site, when he was head of Fairfax, was done over a couple of phone calls with founder Sam Morgan.
Mr Kirk was only a month or so into the job leading the Australian media company when he held talks that led to the $750 million purchase of Trade Me in early 2006.