Goodwill impairment slams Domain results

Written on the 15 February 2019 by Business News Australia

Goodwill impairment slams Domain results

A $178.8 million non-cash goodwill impairment has dragged Domain's results into a loss during the first half of FY19.

The real estate classifieds company recorded first half revenue of $186.3 million, but the impairment charge dragged the company into a net loss after tax result of $156.4 million.

Excluding this impairment charge the company recorded NPAT of $21.1 million, down 14.2 per cent on the prior corresponding period.

The goodwill impairment has impacted Domain's ability to declare a dividend for the first half, but the company expects its dividend capacity to return at the end of the financial year.

Domain says the lower H1 FY19 listings environment in Sydney and Melbourne forced the goodwill impairment charge to come about.

Despite the low listings, chief executive officer Jason Pellegrino is optimistic.

"Domain has effective listings parity and record-level audiences," says Pellegrino.

"We reach 7.2 million Australians across all platforms. We have a large exclusive app audience, with app downloads up 13 per cent year on year."

Following the merger of Fairfax and Nine Entertainment, Domain came under the ownership of the latter. Pellegrino says the merger is a positive moment for Domain.

"We are excited by the merger of Fairfax and Nine and the considerable marketing and audience boost it provides to our business," says Pellegrino.

The first six weeks of H2 saw continued growth in yield and lower listings volumes in what Domain calls a "seasonally low listings period".

"The late timing of Easter reduced current visibility into the Autumn selling season," says Domain.

Shares in Domain are up 17.94 per cent to $2.46 per share at 12.41pm AEDT.

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