- REA Group reported a 23% increase in full year profit to $279.9 million.
- The result was helped by a new financial services division selling home loans.
- But online property listings are falling, especially in Sydney, the biggest market.
Online property classified advertising business REA Group Limited, the owner of realestate.com.au, posted a 23% increase in full year profit of $279.9 million, despite falling in listings in Sydney, the biggest market.
Revenue was 20% higher at $807.7 million, driven by a 21% increase in the Australian business mainly due to a strong performance in residential housing and the inclusion of home loans sales.
But the year ahead is showing the Sydney market as an issue.
Listings in these key markets were up strongly in the first half but listings in Sydney fell in the second half.
In July, overall Australian residential listings fell 4% compared to the same month in 2017 with a larger decline in Sydney.
REA, majority owned by media group News Corp, also anticipates weaker listings in the lead up to the Victorian election in November and the NSW election in March.
“We have had an excellent year, delivering double digit growth,” says REA Group CEO Tracey Fellows.
She expects the rate of revenue growth to exceed the rate of expense growth in the current financial year.
The company declared a fully franked final dividend of 62 cents, bringing the total payout to shareholders to 109 cents a share, a 20% increase on last year.
In Australia, REA operates property sites realestate.com.au, realcommercial.com.au, and Flatmates.com.au.
During the year the company launched realestate.com.au Home Loans and also made an investment in broking company Smartline.
The Financial Services business delivered revenue of $29.3 million, at the upper end of guidance, reflecting a tightening of lending by the banks.
The Asian businesses, iProperty and Chinese listing site myfun.com, contributed revenue of $44.3 million for the year, an increase of 18%. REA also has The EBITDA for Asia also has a 14.1% stake in PropTiger in India.
REA has a 20% investment in Move which operates realtor.com, the number two property portal in North America.
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