Domain suffers revenue decline as print tumbles 35.2%
The challenging advertising and property markets have hit real estate listings and content portal Domain, with the group today announcing an underlying revenue decline of 10.9% for the first half of the 2020 financial year.
Print revenues – which contribute to 12% of the group’s overall revenue – were particularly hard hit, down from $27.3m in the first half of the 2019 financial year to $17.7m this time around, a decline of 35.2%.
Domain’s underlying results for H1 FY2020 (Click to enlarge)
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the group was also down, coming in at $47m, a decline of 8.9%.
Net profit was down 38%, from $20.9m to $12.9m. The company’s net debt is $149.7m.
Domain’s performance by segment (Click to enlarge)
Statutory revenue was $157.6m and profit was $19.4m, including a $6.4m significant item related to the sale of assets.
Domain’s CEO Jason Pellegrino noted print’s decline, but said the company still believes it has a role to play.
“The print revenue decline reflected the ongoing structural shift to digital as well as the challenging cyclical market environment,” he said. “High-value auction and developer markets in Sydney and Melbourne, which have been hardest hit, are particularly important for print. Volume declines and cost initiatives underpinned a 31% reduction in expenses year-on-year. The sale of the Star Weekly titles contributed to margin.
Domain still believes in the value of print (Click to enlarge)
“Domain continues to derive value from print through the high-value, aspirational audiences it attracts, as well as the powerful platform it delivers for agent profile and brand.”
Overall, Pellegrino said given market conditions, Domain delivered a solid performance.
“Despite unprecedented declines in new market listings, Domain continued to leverage its key assets of effective listings parity and large, engaged audiences to deliver value to agents and consumers,” he said.
“Our residential business grew the number of paid depth contracts with agents, and national depth penetration increased to a record level. Our efforts to drive efficiencies throughout this market downturn positions Domain to benefit from any cyclical recovery in property market activity.”
The investor presentation also noted the power of Domain’s integrations with Nine, its majority owner.
Domain’s various integrations with Nine (Click to enlarge)
Domain has also recently pulled its support of the men’s test cricket halfway through its four-year deal with Cricket Australia, leaving the body without a naming sponsor.
