Domain's Profits Suffer in HY1 as Listings Decline in Key Australian Markets

The real estate portal operator Domain Group has posted its results for the first six months of the Australian financial calendar. Notable points from the Sydney-based company's operations during the period include:

• Revenue was up 7.1% on the comparison period at A$188 million.
• Net profit was down 39% at A$15.9 million while EBITDA was down 19.2% at A$49.3 million.
• New sales listings were down 9.5% compared to the comparison period.

Domain's Residential segment historically accounts for between 60-70% of total revenue. Although new sales listings coming to market dropped 9.5% over the period, the segment only saw a like-for-like revenue decrease of 1% over the period.

Domain Chief Executive Officer and Managing Director, Jason Pellegrino, said: “The challenges of the current property environment are well known given the dramatic change in global inflation and geopolitical risk, and the impact of nine interest rate increases in nine months. Domain has weathered major events over the past four years including the Royal Commission and COVID.

It is telling that the scale of the listings declines during the latest December quarter eclipsed both those events, with Sydney and Melbourne recording listings declines double the market average. In response to the rapid change in the market environment, we have responded with a disciplined and thoughtful approach to cost."

The company noted that depth penetration was stable over the first half of the year and that its Social Boost product helped to boost revenue over the period.

Like rival REA Group's last week, Domain report noted that the worst of the listings decline had been seen in the lucrative markets of Sydney and Melbourne. Despite a volume decline, the company was able to increase the revenue it generated per listing during the period.

Revenue from commercial real estate was stable while new build revenues declined slightly in the face of challenging market conditions. The company said that its media revenues outperformed a challenging market.

The performance of Domain's Agent Solutions segment was up 173% on the comparison period thanks to the A$180 million purchase last April of the campaign management platform RealBase. On an adjusted like-for-like basis the figure was 6%.