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- Online real estate advertising company REA Group (REA) has delivered a strong half-year performance update, despite the volatile market conditions
- The company hit $290.2 million in earnings, an increase of nine per cent over the prior corresponding period
- Unfortunately, revenue was down two per cent to $430.4 million
- During the half, realestate.com.au delivered record audience numbers with an average 12.3 million site visitors each month
- Additionally, 13 million users were recorded in November, equating to 65 per cent of Australia’s population
- REA also acquired Realtair and Campaign Agent, now holding 19.9 per cent and 27 per cent, respectively
- As of December 31, the company had a cash balance of $179.9 million and low debt levels
- REA has ended the day 1.62 per cent in the green with shares trading at $157
Online real estate advertising company REA Group (REA) has delivered a strong half-year performance update, despite the volatile market conditions.
The company had earnings before interest, taxes, depreciation and amortisation (EBITDA) of $290.2 million which is up nine per cent over the prior corresponding period (pcp).
Net profit was also up 13 per cent to $172.1 million, as was the interim dividend — up seven per cent to 59 cents per share.
Unfortunately, REA’s revenue was down two per cent from the pcp to $430.4 million.
Additionally, continued focus on cost management saw a 13 per cent reduction in operating expenditure over the half.
“We have delivered a remarkable first half result, particularly given the Melbourne market came to a virtual standstill during the lockdown,” CEO Owen Wilson commented.
Australia
In Australia, REA owns and operates realestate.com.au, real commercial.com.au, and flatmates.com.au.
Revenue was flat at $413.3 million, but residential revenue increase four per cent to $295.6 million.
Unfortunately, there was a reduction in listings due to COVID related issues, however, this has no impact on group revenue.
Commercial revenue decreased due to a 26 per cent decline in listings which still continues to be affected by COVID-19.
Media and data revenue also declined by 12 per cent, largely driven by a reduction in display advertising and lower display spend.
“Australia’s property market appears to be on the march again, showing signs of a strong recovery in November and December. This was fuelled by the easing of COVID-19 restrictions, combined with increasing consumer confidence, record low interest rates and healthy bank liquidity,” Owen said.
Asia
REA’s Asia revenue declined 38 per cent, primarily driven by renewed COVID lockdowns and event cancellations. EBITDA totalled $1.7 million.
However, iProperty.com.my in Malaysia remains the country’s number one property site with site visits growing 35 per cent YoY.
realestate.com.au growth
During the half, realestate.com.au delivered record audience numbers with an average 12.3 million site visitors each month, up 39 per cent over the pcp.
Additionally, 13 million users were recorded in November, equating to 65 per cent of Australia’s population.
Average daily users totalled 1.9 million, a 56 per cent increase year-on-year (YoY), while average monthly visits totalled 115 million, up 36 per cent YoY.
“realestate.com.au remains the clear number one in online real estate and during the half we accelerated our audience growth,” Owen said.
“Our unrivalled audience of high intent property seekers is also extremely loyal with almost 6.5 million people choosing to use realestate.com.au exclusively,” he added.
Investments
On December 1, REA acquired a 17.9 per cent interest in Realtair and increased its holding to 19.9 per cent in January. All up this cost REA $7.3 million.
Realtair provides an end-to-end real estate sales solution which allows agents to pitch, sign, automate and streamline the steps from property appraisal to settlement through mobile.
In February, REA entered a binding agreement to acquire a 27 per cent interest in Campaign Agent for $13.3 million.
Campaign Agent owns VPAPay which is the market-leading buy now pay later solution for vendor paid advertising.
Outlook
REA expects commercial revenue to remain challenging with Asia revenue likely to be negatively impacted for the remainder of FY21 due to COVID restrictions still in place in the country.
Additionally, REA expects core operating costs will increase this half as COVID related savings, such as travel and entertainment, reduce.
As of December 31, the company had a cash balance of $179.9 million and low debt levels.
REA has ended the day 1.62 per cent in the green with shares trading at $157 in a $20.41 billion market cap.
