REA Group Limited announced results for the half-year ending 31 December 2012. Revenue for the Group rose 20% to $161.4 million on the prior corresponding period, EBITDA grew by 30% to $77.3 million and net profit increased by 25% to $51.6 million.
“REA Group’s excellent half-year results reflect the success of our depth listing products, specifically tailored to the requirements of our residential, commercial and developer customers. We now have a suite of depth products delivering exceptional return on investment to our customers through increased visits and enquiry. These products have shown resilience in the current property cycle and are now key growth drivers for the Group, creating substantial value for shareholders,” commented Greg Ellis, REA Group CEO and Managing Director.
Australia – Depth listing take-up accelerates
Australia recorded revenue growth of 21% in the first half due to accelerated take-up of depth products including residential and commercial listing products and developer advertising products. Australian depth listing revenue surpassed subscription revenue for the first time in HY2013 ($59.8m versus $58.2m respectively).
REA Group operates Australia’s No.1 residential and commercial property sites, realestate.com.au and realcommercial.com.au, and the REA Media business serving
developer and display media clients. Residential revenue increased by 21%, commercial revenue increased by 25%, and media and developer revenue increased by 18% on the previous half-year.
Together, REA Group’s property websites - realestate.com.au, realcommercial.com.au and property.com.au - accounted for an average of 75% of total minutes Australians spent on property sites in the six months to 31 December 2012 (nearest competitor 19%)1, and attracted average monthly visits of 19.4 million during the period (approx. 2.4 times that of nearest competitor)2.
In addition to growth in desktop visits, our mobile sites and apps recorded exponential growth. Average monthly visits to realestate.com.au and realcommercial.com.au m.sites grew by 23% on June 2012 and 88% on December 20113. Downloads of realestate.com.au and realcommercial.com.au mobile apps have now exceeded 1.7 million4
Italy – Continues to deliver growth in challenging market environment
Italy’s market-leading residential property site, casa.it, recorded revenue growth of 24% in local currency to €9.7 million (AUD$11.9 million) and EBITDA growth of 383% to €1.1 million (AUD$1.3), an excellent result given challenging local market conditions. REA Group has begun rolling out depth listings in Italy, commencing with listing products for mid-high value properties. Take-up of these products has contributed to 35% growth in monthly Average Revenue Per Agent (ARPA).
Traffic to casa.it increased by 24% to average monthly visits of 7.1 million for the six months to 31 December 20122.
There was an 11% decrease in paying agents during the period due to strict application of our credit policy and the difficult economic conditions which have contributed to a contraction in smaller agencies. However, this was offset by casa.it’s growth in ARPA and in media revenue.
Other countries – Hong Kong and Europe
REA Group’s Hong Kong property site, squarefoot.com.hk, achieved solid incremental growth during the first half, including a 40% increase in agent customers and 110% increase in average monthly visits to the site2. There was a 28% EBITDA improvement in local currency due the consolidation of print publications. With new management in place in Hong Kong, REA Group will continue to invest in the development of the business during the second half of FY2013.
In Europe, the athome business operates the number one property site in Greater Luxembourg as well as sites in Germany and France, which continues to be a key focus for expansion. In local currency, the business recorded 23% revenue growth, 63% EBITDA growth, and 38% average monthly ARPA growth during the half-year. Traffic to all sites in the Greater Luxembourg Region increased by 46% to average monthly visits of 736,000 for the six months to 31 December 20122.
Greg Ellis said: “REA Group has a highly-engaged team of over 650 people across Australia, Hong Kong and Europe. This team works hard every day to deliver outstanding products and services that add value both for our customers and for the consumers who engage with our sites. Our focus on investing in our people, technology and innovation is delivering sustained growth in all areas of our operations.”
REA Group Chairman, Hamish McLennan, commented: “These excellent results are confirmation that our strategy, together with our investment of over $45 million annually in our platform and advertising products, continue to deliver increased value to REA Group’s customers. On behalf of the Board, I would like to congratulate Greg and his management team on the Group’s first-half performance.”
Dividend & DRP
The directors have declared a 2013 interim dividend of 16 cents per share fully franked, a 28% increase on the 2012 interim dividend of 12.5 cents per share. This growth builds on 2012 interim dividend growth of 25% (vs 2011 interim dividend of 10 cents per share) and demonstrates the Board’s commitment to returning increased value to shareholders. The interim dividend will be paid on 20 March 2013, with a record date of 6 March 2013. Following a review of its capital management program, the Board has decided to suspend the Dividend Reinvestment Plan indefinitely. Any future decision to recommence the Plan will be notified to shareholders.
1 Nielsen Online Market Intelligence, Total traffic for audited sites, average monthly time on site for the six month period for realestate.com.au, realcommercial.com.au and property.com.au compared to domain.com.au and commercialrealestate.com.au
2 Nielsen Online Market Intelligence, Total traffic for audited sites, average monthly desktop visits for the six month period for 3 realestate.com.au,realcommercial.com.au and property.com.aucomparedtodomain.com.au and commercialrealestate.com.au Adobe Omniture Site Catalyst, average monthly visits June-December 2012 vs June-December 2011
3 Adobe Omniture Site Catalyst, average monthly visits June-December 2012 vs June-December 2011
4 Googleplace store and Apple app store. iOS and Android downloads as at December 2012 for realestate.com.au and realcommercial.com.au combined