Residential revenue lifts REA Group profit
Written on the 10 August 2018 by Business News Australia
A new digital home loan service offering from realestate.com.au also turned a profit, while the company's $130 million acquisition of property data specialist Hometrack Australia is forecast to boost results in the 2019 financial year.
Despite a slight decline in Australian property prices last quarter, online real estate advertising leader REA Group (ASX: REA) has notched a 22 per cent jump in EBITDA in FY2018.
The Melbourne-based company attributed the $463.7 million earnings result to a "very strong performance" in its residential segment, even though total listings nationwide were down 2 per cent for the year.
Sydney and Melbourne, where property prices have fallen, generated a moderate increase in residential listings.
A newly created financial services segment delivered EBITDA of $10.8 million with the launch of realestate.com.au Home Loans, an Australia-first end-to-end digital property search and financing experience complemented by the acquisition of mortgage broker Smartline.
A $130 million acquisition of property data specialist Hometrack Australia was completed in June, and the board expects it to deliver EBITDA of between $6-7 million in FY2019.
The vast majority of REA Group's $807.7 million in revenue came from the Australian market but its Asian business comprising iProperty and Chinese listing site myfun.com contributed $44.3 million for the year, representing an 18 per cent revenue rise.
The company highlighted a strengthening of its leadership position in Malaysia and Indonesia, while it now has the fastest growing property portal in Singapore having moved from fourth to second position in the market.
REA Group also has investments in India's PropTiger and North American company Move Inc, which operates realtor.com. Both these companies delivered strong results for the period.
"We have had an excellent year, delivering double digit growth. We're giving consumers and customers even more reasons to come back to us by creating better and more personalised property experiences," REA Group CEO Tracey Fellows said in today's results announcement.
"In Australia, realestate.com.au continues to be the # 1 place for property with 2.6 times the monthly visits of our nearest competitor. We have the largest, most engaged audience across every device, on every screen size," she said.
"It's been a year of unprecedented product launches focused on delivering value for our customers. This has been led by our new suite of Agent Edge products providing onsite branding and connecting customers with potential sellers."
Business News Australia
Author: Business News Australia