Wellington, Aug 21 NZPA - Fairfax Media New Zealand, the owner of nine daily and two national Sunday newspapers, reported a 2.5 percent increase in annual revenue and a 3.1 percent rise in operating earnings.

But the standout performer on this side of the Tasman in its Australian parent's profit result today was the online auction website TradeMe, which posted a 39 percent increase in profit to $NZ70.1m in the year to June 29 from a year ago.

Because the profit was so strong Fairfax Media, the Australian parent run by New Zealander David Kirk, has to pay $NZ45.2m to TradeMe's founders as part of an earnout provision.

Fairfax paid $700m for TradeMe in 2006. The deal had an earnout clause that lasted for two years. TradeMe's founder and chief executive Sam Morgan has stayed on to run the business.

Year-on-year job listings on the site are up 31 percent, motor vehicle listings are up 37 percent and real estate listings are up 111 percent.

Fairfax Media NZ said cost reduction measures are flowing through to its earnings.

Underlying publishing costs were "well contained" despite strong inflationary pressure on labour costs, the company said.

Earnings before interest, tax, depreciation and amortisation rose 3.1 percent to $NZ191.6m. Revenue rose 2.5 percent to $NZ592.8m.

Worsening economic conditions in New Zealand in the second half of the year affected employment and real estate advertising.

The company said further cost saving initiatives were in place for 2009.

"Fairfax Media is the largest and most diversified media company in Australasia, and we continue to be more competitive and successful than ever before," chairman Ron Walker said.

Fairfax Media Ltd, the parent, lifted its annual earnings by nearly 47 percent following its merger in 2007 with Rural Press, and said advertising markets have slowed.

Fairfax's net profit for the year ended June 29 was $A386.9m ($NZ479.7m), up 46.8 percent from $A263.51m in the prior corresponding period.

The result, built on a 33.9 percent revenue boost to $A2.91 billion, was a little lower than the median market expectation for a $A389.2m profit.

The company declared a final dividend of A10c per share, bringing the total dividend for the year to A20c.

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