The growing strength of ‘new media’ companies has been underlined with CarSales announcing double-digit growth for both revenues and profits in the first half of the financial year.
Net profit leapt 14% to $37.6m, on the back of increased revenues of 17% to $102.1m, although an increase in marketing activity has led to a slightly lower margin on earnings before inflation, tax, depreciation and amortisation of 53%.
CEO Greg Roebuck hailed the result as showing they are the “clear number one” in the field, despite increased marketing pushes from competitors.
He added: “We have continued to roll out key developments across our network of sites, on both desktop and mobile platforms to continue to enhance our consumer and business-to-business offerings. Desktop innovation is still important but new mobile solutions are also key."
Last year the Australian Consumer and Competition Commission stopped the planned acquisition of TradeMe by the firm’s QuickSales brand, but Roebuck said despite this the general classifieds site had “yielded good growth” despite being a “work in progress”.
Overall display advertising was up 28%, with new car inquiries up 35% year on year.
Samantha Carleton, an analyst for Credit Suisse, said the results were above market expectations for the group and placed an outperform rating on the shares.