Domain grows revenue by 10.7% to $289.6m, but print declines 33%
Domain Holdings Australia Limited (DHG) has delivered its results for the 2021 Financial Year, revealing a significant boost in net profit after tax, which grew 66% to $34.3 million year-on-year.
Domain, which is majority owned by Nine Entertainment Co, reported a 10.7% increase in revenue to $289.6 million, and declared a $0.04 per share dividend to be paid to shareholders.
Domain Results FY21 [click to enlarge]
The FY21 report also revealed an EBITDA of $100.6 million after the impact of an accounting change, an increase of 21.1%, while expenses were also up 5.6% to $189 million. Net debt was reduced from $105.8 million down to $79 million compared to the same time last year.
Domain also revealed it will also repay benefits received in FY21 from the Federal Government’s JobKeeper scheme, which will impact FY22.
Domain CEO and managing director, Jason Pellegrino, said Domain’s Marketplace model will allow the business to continue to take advantage of the recovering property market.
“Through the uncertainties of the past year and a half, Domain maintained the pace of business strategy evolution. The adoption of our Marketplace model is designed to make our solutions work better together, expand our addressable markets, and deliver on our purpose to inspire confidence for all of life’s property decisions,” he said.
“The actions we have taken have positioned Domain to take full advantage of an improving property market environment, with Core digital EBITDA growth of 31% like-for-like. The recovery in market listings has combined with an expansion in Domain’s controllable yield to deliver accelerating revenue growth in the second half.
“While the market recovery was very welcome, it’s been extraordinary for me to see the amazing efforts and outcomes that have been achieved by Domain’s high performing teams.”
Pelligrino and chief financial officer Rob Doyle performed well on their personal performance outcomes. The report revealed that each of them exceeded their financial targets, with revenue at 108% of target and EBIDTA at 122% of target.
People and Culture Initiatives were also met, but their performance in ‘Transformational Initiatives’ were considered to be below target despite this area accounting for 40% of performance judgement.
Meanwhile, Domain’s core digital revenue was up 16% on a like-for-like basis, Pellegrino revealed, while the month of March saw Domain reach a new unique audience record of 9.6 million across both print and digital (up 23% year-on-year).
“Our focus on quality, high intent audiences is driving efficiencies in marketing spend, and this trend continued. We have seen a 55% increase in buyer enquiries, our most valuable audience interaction, while reducing cost per enquiry by 25% year-on-year in the second half,” he added.
Residential revenue was up 21% to $185.3 million, which Pelligrino linked with strong demand fuelling recovery in listings after FY20’s COVID-impacted lows.
Revenue across media, developers and commercial was up 7% as “developers delivered a solid revenue increase for the year, benefiting from demand from first home buyer and downsizer markets.”
CEO and MD Jason Pellegrino
Pelligrino also said that a 33% decline in print revenue reflected the pause in printing during COVID in 2020, but said that was followed by “substantial second half recovery as publishing activities resumed” and asserted that Domain’s print operations remain sustainable.
“For the year, the mastheads published only 68% of their usual schedule. Cost reduction initiatives, together with print volume declines, supported a 27% year-on-year decline in expenses, and the maintenance of EBITDA profitability,” he said.
“Print remains sustainable in premium markets due to the strategic value it delivers to agents from high value, passive audiences, as well as building agent profile and brand.”
Domain’s results also included an updated FY22 outlook, which revealed that national listings are already up nationally on the same period last year.
Ongoing costs for FY22 are expected to increase in “the high single-digit to low double-digit range”, excluding the impact of the $5.7 million JobKeeper repayment.
Domain’s financial results also disclosed the company’s voluntary employee program, Project Zipline’ which was launched in 2020 to deliver a 20% reduction in employee cash salary costs.
Between 4 May and 1 November employees were asked to take either a specific percentage of their salary package as a one of grant of share rights, reduce their working days, or take leave without pay.
90% of staff opted to support Project Zipline with 87% taking part. Domain revealed that the share rights granted to participating staff totalled $2.0093 based on a volume-weighted average market price (VWAP).
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Zanda Wilson was a reporter and podcast producer at Mumbrella, specialising in radio reporting. He left Mumbrella in September 2021.
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