Domain Sees Half-Year Revenue Buoyed by Urban Market Rebound

The real estate portal operator Domain Group has released its results for the first half of the Australian financial calendar. Highlights from the ASX-listed company's report include:

• Revenue was up 11% year-on-year at A$202 million.
• EBITDA increased 32% to A$68 million at a 34% margin.
• Residential revenue was up 16% year-on-year at A$138 million.

The results are in line with those of arch-rival REA Group, which reported a domestic revenue increase of 19% for the period, and reflect a more buoyant real estate market in the lucrative Sydney and Melbourne markets.

Commenting on the results, Domain Chief Executive Officer and Managing Director, Jason Pellegrino, said:

“The first half of FY24 has seen a pleasing turnaround in the property market environment in Sydney and Melbourne, although other markets have remained challenging, impacted by rising interest rates and cost of living pressures. We have retained our disciplined Marketplace approach, with operating expenses increasing less than 3% year-on-year in the first half. We continue to be optimistic about the opportunities available to our Marketplace and our ambition to become a much bigger business.

Growth in Domain's residential segment was largely thanks to a reported 20% increase in average revenue per listing (ARPL) and a 14% increase in depth penetration.

Although listings volumes are now recovering, the company report highlighted the ongoing challenging market conditions for agents, especially outside of Sydney and Melbourne.

The report also highlighted the 10.3% unique audience growth which Domain claims is greater than the 4% growth achieved by its main competitor (REA Group) over the period.

Domain's Media, Developer and Commercial segment saw revenue increase 9% year-on-year for the period as commercial real estate thrived. The gains were somewhat offset by the continued sluggishness of the new build segment in Australia.

The six-month period covered in Domain's report was also notable for spanning the company's divestment from its mortgage business. Held as a joint venture with privately owned digital mortgage brokerage, Lendi, Domain Home Loans was responsible for a A$7.3 million loss in FY23.

Pellegrino confirmed the exit in the latest missive to the market and hinted that Domain may be in the market to re-enter the mortgage game or other adjacent revenue streams if and when the right opportunity presents itself.