REA Group’s Australian revenue up 14% year on year
Online real estate advertising company and parent group of realestate.com.au, REA Group, has reported a total revenue increase of 16% for FY17, with its revenue from the Australian market contributing significantly to the result.
The latest results show REA Group’s annual revenue reached $671.2m, largely driven by “a 14% increase in Australia and the inclusion of iProperty revenue for the full year”.
REA Group’s EBITDA (earnings before interest, tax, depreciation and amortisation) was up 16% year on year, at $381m.
The company’s net profit after tax also had a major increase, up 12% to $228m.
REA Group’s FY17 results
In a release on the ASX, REA Group – which is majority owned by News Corp – highlighted its positive results, noting tightening market conditions.
“Australia’s listing depth revenue increased 18% to $481.8m. This was driven by the success of our residential Premiere All offering and increased yield, despite the decrease in listing volumes.
“Developer and commercial listing dept and subscription revenue increased 15%. This growth was due to the positive take-up of our premium developer product, Project Profiles, which showcases large developments. We achieved this strong result during a period of decline in new dwelling commencements.”
The company noted strategic expansion through flatmates.com.au and its NAB partnership were also key contributors to revenue growth, with media and other business revenue increasing 2%, to $95.3m.
Realestate.com.au’s average monthly visits grew 13%, and average monthly launches of realestate.com.au app increased by 52%.
REA Group CEO, Tracey Fellows, said this year’s financial results were “exceptional” and could be attributed to the brand creating the “best products and experiences” for customers.
Tracey Fellows, REA CEO
“In Australia, we have extended our position as the clear market leader, with our audience growth reaching record highs against our nearest competitor.
“We continue to diversify our business and deepen consumer engagement across the property journey.
“The most significant and exciting has been our move into financial services, through our partnership with NAB and our acquisition of the broking business, Smartline.”
She added the company would remain focused on Asia and its investment in the US with Move going forward.
The company expects the inclusion of its financial services segment to contribute revenue of between $26m to $30m and EBITDA between $7m to $11m for FY18.
REA puts serious heat under Fairfax. The standout number is a constant 57% EBITDA margin. Domain’s dual identity as a print/online concept is matched by a dual equity Fairfax/estate agent ownership. Domain’s margin reflects the reality of its mix but apparently not the real cost of estate agent incentives.
Many, many questions to answer when fairfax results emerge, ahead of it’s “float” of a Domain.
First question: if real estate agents earned equity instead of cash will that equity abandon ship in the “float”? If so, what happens to the incentive to push Domain?
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Numbers is interesting. Explains why the big private equity game hit the wall. I wonder how Hywood will spin this one?
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