Goodwill Impairment and Japanese Housing Market Hamper Lifull's Yearly Results

The Japanese portal and international aggregator operator Lifull has released a report on its annual results which shows that despite gains in its overseas division, the company lost $51 million dollars over the financial year.

Lifull runs a property portal in Japan (Lifull Homes) with several adjacent businesses including everything from a home moving aggregator to old age nursing care to flower delivery. As well as its domestic operations Lifull also runs the international aggregators Trovit, Mitula, Nuroa and Nestoria (collectively known as Lifull Connect) as well as several property portals across Southeast Asia and Latin America.

Although revenue for the whole company was up 1.3% on a yearly basis (5.4% above management's expectation), adverse conditions within the Japanese real estate market and an impairment loss related to the 2019 purchase of Mitula Group dragged the bottom line into the red.

The market did not react well to the results with shares in Lifull dropping almost 20% on Thursday as its shares continue to struggle on the Tokyo Stock Exchange.

Available properties in the greater Tokyo area were down 40% and new listings down 33% with a company statement also blaming the Olympic games for having a negative impact on rental enquiries over the year. As a result of this, revenue from the domestic portal operations was down 1.7% and profit was down 39% on the year.

Elsewhere, Lifull's overseas operations enjoyed a more successful year with profits recovering from a heavily pandemic affected 2020 and revenues growing 10.5%. The company has been working on a new offering that posts all portal listings from Latin America and Southeast Asia across all of the group's international listings sites and manages leads on one platform named Proppit.

Proppit along with a new mobile real estate investment platform that Lifull is working on is expected to drive growth for the coming financial year. According to Lifull's yearly presentation to investors, the company is "focusing on increasing consolidated revenue during our FY 2025 Mid-Term Plan and striving for a mid-term CAGR of approx. 15% and operating income margin of 20%"

The company remains bullish on the potential for a global investment platform integrated across its network as well as the potential for AI to change the value proposition of its domestic portal from a lead generation model to more of a personalised matching service.