This article is from the Australian Property Journal archive
NEWS Corp’s property portal, news and research company REA Group posted a strong set of first-half numbers on the back of strong listings volumes across the country, as chief executive Owen Wilson announced his retirement.
Revenue growth jumped 20% to $873 million, while EBITDA increased 22% to $535 million, and a net profit lifted 26% to $314 million .
Reported net profit increased 246% to $441 million, reflecting the gain on sale of the group’s 17.2% stake in PropertyGuru and other one-off impacts in both periods.
The interim dividend of $1.10 per share was 26% higher.
“REA’s exceptional first half result was driven by strong yield growth in a healthy listings environment. Vendors remained confident during the half with sales volumes consistently higher than the prior year, demonstrating the depth of demand, while buyers benefitted from more choice and some moderation in price growth,” Wilson said.
SQM Research data shows total listings grew by 4.5% in January, hitting 243,642 properties – 10.3% higher than a year earlier. Along with stretched affordability, that has translated into the slowdown in price growth, and in some cities, price falls.
“Following sustained listings growth, the Australian property market has reached a more balanced level of supply and demand. Continued strength in underlying fundamentals and the expectation of at least one interest rate cut before the end of FY25 should further support the health of the market,” Wilson said.
REA Group’s realestate.com.au remains the largest property listings site in Australia, and it claims 5.1 million more Australians visit the site every month on average compared to its nearest competitor Domain. It said 11.9 million people visited each month on average during the half, with 6.1 million people exclusively using realestate.com.au.
The site receives 130.7 million monthly visits, and recorded 2.2 million monthly buyer enquiries, up 4% year-on-year.
REA Group’s Australian residential business revenue increased 21% to $614 million. Buy revenue growth was driven by a 14% increase in buy yield and a 5% increase in national listings. Buy yield benefited from a 10% average price rise in its Premiere+ listings offering, increased Premiere+ and total depth penetration, and growth in add-ons including Audience Maximiser and Luxe, offset by a small negative impact from geographical mix.
The company’s expectation for double-digit FY25 residential Buy yield growth remained unchanged, although the magnitude of growth may be impacted if the negative drag from geographical mix continues across the remainder of the year.
Rent revenue was driven by an 8% average price rise, growth in depth penetration and a 6% increase in listings.
Commercial and Developer revenue increased 10% to $110 million. Commercial revenue growth was driven by an average 12% price rise, increased depth penetration and higher listings. Developer revenues were up modestly.
REA Group said 1.5 million people visited its commercial property portal realcommercial.com.au each month, 2.7 times more visitors than the nearest competitor.
The company’s India business delivered a 46% increase in revenue growth to $64 million. Revenue from adjacent services on Housing Edge increased 153%, driven by increased customer acquisition and usage. Housing.com revenue was up 15%, helped by improved monetisation in Tier 2 cities, while PropTiger revenues declined by 26%, reflecting reduced volume of stock and lower commission rates in the strong property market.
REA India’s app-first strategy saw Housing.com‘s app sessions increasing 37% and share of app downloads at 54%.
The Group repaid all external debt of $209 million following the sale of PropertyGuru in December. A $400 million undrawn debt facility remains in place, with a maturity of September 2028. The group has a cash balance of $338 million.
Wilson retires
Wilson has announced his intention to retire from full time executive roles in the second half of 2025 after 10 years with REA, and six years as CEO – a period in which the group’s numbers have improved substantially.
“It has been a privilege to lead REA Group for the past six years and I am proud of all our team has accomplished. The business is in excellent shape as evidenced by the results we have announced today. We have an exciting strategy and a talented and committed team to deliver it,” he said.
REA Group chairman, Hamish McLennan said, “After more than 10 glorious years at REA Group, Owen has decided to retire. His stellar leadership leaves the company exceptionally well positioned and REA is one of the best home-grown technology companies which has flourished into being a global leader.
Robert Thomson, News Corp CEO, said, “Owen has shown extraordinary leadership in building a global success story at REA, which has become the gold standard for digital platforms. He has fashioned a dynamic, talented team and cultivated a competitive, empathetic culture. Owen’s positive influence will resonate for many years to come.”
