Domain reports 12% drop in revenue for beginning of FY20 as ‘challenging market’ continues

The 2020 financial year has gotten off to a slow start at Domain, with the real estate media business reporting a 12% drop in revenue and an 8% fall in digital revenue. The decreases are an improvement from the final quarter of FY2019 when total revenues fell 17% and digital 11%.

Again, a complicated and challenging property market is being blamed for the subdued figures, with new market listings down 14% nationally. The platform is reporting a focus on dropping its total costs by around 10% across the first half of the new financial year in a bid to offset the shy market.

A soft property market is still hurting Domain with a 12% drop in revenues reported for the beginning of FY20

Domain’s main markets, Sydney and Melbourne, have contributed to the platforms declining revenues. Auction figures, a reflection of the health of the property market, were down 10% in Sydney and 18% in Melbourne. Referring to the figures are ‘unprecedented declines’, chairman Nick Falloon said the platform is focusing on a ‘long term growth strategy’, including growing the core listing business, boosting new revenue with consumer solutions and partnerships, and simplifying and optimising the existing business. Domain is 59% owned by Nine following the Fairfax and Nine merger.

Despite the struggles in the market, residential revenue did increase, 0.5% to $173m, but media, developers and commercial all fell. The business moved to a programmatic advertising model shortly after the incoming of CEO Jason Pellegrino which results in lower revenues, but also lower costs. Print revenue fell 30%, and is one of the avenues in the business which will benefit most from streamlining, said Pellegrino.

Part of Domain’s growth strategy is expanding its offering for clients, both agents and the general public. Part of that is the acquisition of Real Time Agent, a point of sales platform which Domain is acquiring in a $35m deal that will see it pay $19.4m in cash initially and bonus payments of up to $15.6m over the next two financial years depending on performance.

The money will go to Bidtracker Holdings, the business which owns and operates Real Time Agent. The platform will need to hit 200% of the targets in its business plan for the total $35m to be paid. Pellegrino said in the stock exchange announcement that the product would provide ‘huge benefits’ to both agents and consumers.

Real Time Agent is reported to have a 98% customer retention rate over its three years and digitises contracts, auctions and agency agreements, improving the administration time of real estate offices. Bidtracker also offers real-time auction insights.

Domain reported a $137m loss for financial year 2018/19.


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