REA Group has today reported strong results for the three months ending September 30, 2021, despite lockdowns in some of its major Australian markets.
In a statement to the Australia Securities Exchange, the Group recorded a 22% year-on-year revenue increase, excluding its acquisitions, to A$ 264 million (US$ 194.6 million), and EBITDA including associates of A$158 million (US$ 116.5 million).
Owen Wilson, REA Group Chief Executive Officer, said: “REA has delivered an impressive result given the prolonged lockdowns in Sydney and Melbourne. Our performance reflects the continued value our premium listing products are delivering to our customers, and realestate.com.au’s clear position as the number one place to search, find and finance property.”
The statement said that Australia’s residential property market showed resilience during the quarter. After modest year-on-year declines during July, national listings increased 11% for the quarter, with Sydney down 7% and Melbourne up 79% due to lockdown impacts in the prior period.
Australian residential revenue increased for the quarter, benefiting from increased depth and Premiere penetration, listings growth, the contracted price rise from 1 July, and continued growth in add-on products.
Commercial and developer revenue increased, despite the negative impact of lockdowns in Sydney and Melbourne. Commercial revenues were up year-on-year, driven by increased depth penetration and price changes which came into effect on 1 July.
Developer revenues benefited from the flow-on effect of increased year-on-year project launches in FY21, and increased project profile durations that was partly offset by a 37% YoY decline in project launches for the quarter.
It noted that the Indian market has rebounded following the negative COVID impacts. REA India, formerly Elara Technologies, achieved strong year-on-year revenue growth driven by Housing.com’s core business and growth in adjacency products.
The Group’s combined share of associates contributed A$1 million (US$ 737,400) to EBITDA, down from A$3 million (US$ 2.12 million) in Q1 FY21. Move, Inc. continued to deliver strong revenue growth. The reduction in contributions from associates also reflects the inclusion of equity accounted losses from Simpology, Realtair, CampaignAgent and PropertyGuru.
The Group strengthened its liquidity position by entering a new syndicated debt facility in September 2021.
Its Realestate.com.au remains as Australia’s number one place for property, attracting a high intent audience of loyal property enthusiasts looking to search, find and finance all their property needs.
“On average, 12.6 million people visited realestate.com.au each month during the quarter, with a record 7.3 million people choosing to use our site exclusively in July. Buyer enquiries also reached record levels during the quarter, up 61% year-on-year, providing our customers with an increasing volume of qualified leads,” added Wilson.
Audience highlights for realestate.com.au, included:
It said that current residential property market conditions are positive, with high levels of buyer enquiry underpinned by continued low interest rates and healthy bank liquidity. It said that year-on-year growth rates are expected to slow as we cycle very strong prior period listing volumes, particularly in the second half, and regulatory measures to slow house price inflation could impact listing volumes.
The Group is targeting positive operating jaws, excluding the impact of acquisitions. Based on the current market outlook, and excluding the impact of REA India and Mortgage Choice, the Group anticipates high-single digit core operating cost growth. This reflects increased investment to deliver our strategic initiatives, combined with a tight labour market driving higher salary inflation.
On successful completion of PropertyGuru’s planned New York Stock Exchange listing, which is anticipated to occur in Q2 or Q3 FY22, PropertyGuru is expected to incur a number of oneoff costs associated with the listing, which will be reflected in the Group’s reported FY22 equity accounted results.
“As vaccination milestones are met and restrictions continue to be lifted, we expect property markets across Australia to revert to normal operating settings. Buyers remain out in force and this strong demand is likely to fuel ongoing positive momentum,” concluded Wilson.
REA Group is a multinational digital advertising business specialising in property. It operates Australia’s leading residential and commercial property websites – realestate.com.au and realcommercial.com.au – as well as the leading website dedicated to share property, Flatmates.com.au. REA Group also owns Smartline Home Loans Pty Ltd and Mortgage Choice Pty Ltd, Australian mortgage broking franchise groups, and PropTrack Pty Ltd, a provider of property data services.
In Australia, REA Group holds strategic investments in Simpology Pty Ltd, a leading provider of mortgage application and e-lodgement solutions for the broking and lending industries; Realtair Pty Ltd, a digital platform providing end-to-end technology solutions for the real estate transaction process, Campaign Agent Pty Ltd, Australia’s leading provider of Buy Now Pay Later solutions for the Australian real estate market and Managed Platforms Pty Ltd, an emerging Property Management software platform. Internationally,
REA Group holds a controlling interest in REA India, formerly Elara Technologies Pte. Ltd, the operator of established brands Housing.com, Makaan.com and PropTiger.com and also owns leading portals in Hong Kong (squarefoot.com.hk) and China (myfun.com). It also holds a significant minority shareholding in Move, Inc., operator of realtor.com in the US, and the PropertyGuru Group, operator of leading property sites in Malaysia, Singapore, Thailand, Vietnam and Indonesia.