Radio New Zealand - Te Reo Irirangi o Aotearoa

AutoBase purchase will not significantly boost earnings - CEO

Updated at 7:44 am on 1 May 2012

TradeMe says buying the rest of vehicle dealer collator AutoBase will not significantly boost earnings.

The company already had a quarter stake worth $5.5 million in AutoBase, which aggregates listings from car, truck, motorcycle and boat dealers. Trade Me then advertises these in the motors section of its site.

It has now bought the remainder for $11.5 million in cash.

Autobase's gross earnings were $3.2 million in the year to March compared with Trade Me's estimated annual earnings of $100 million.

Trade Me chief executive Jon Macdonald says it makes sense to buy out AutoBase co-founders Hamish Lusk and David Paviour and bring the operation in line with its property and jobs businesses.

"It doesn't change things too dramatically. We've had a commercial agreement with AutoBase - effectively a profit share arrangement - to this point. With the acquisition we do capture the entirety of the earnings but it's not a big deal when we look at Trade Me overall."

Mr Macdonald says it will keep all of AutoBase's 16 staff.

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