REA Group has released results for FY21 Q1 with some strong numbers reported despite covid related volatility in the market. Group EBITDA was up 8% year-on-year to A$123.8 million despite revenue falling 3% to A$195.7 million. The fall in revenue being attributed by the company to covid related restrictions in the group’s native Australia, while the rise in EBITDA is chalked up to cost-saving measures resulting in an 18% reduction in core operating expenditure on the quarter.
REA Group Chief Executive Officer, Owen Wilson commented: “This result demonstrates the strength of our business, despite continued COVID-19 impacts. I am extremely proud of the resilience and dedication of our teams to continue to deliver new innovations and excellent customer support while working remotely.”
Elsewhere, revenue from advertising was down, largely due to the reduction of new construction projects with developers being important customers in this segment. Interestingly the losses in media and advertising were offset to some extent by what today’s earning report refers to as “an increase in Data revenue driven by higher valuation volumes”.
The group chose to flag some impressive figures around audience and market leadership of its flagship property portal realestate.com.au which include visitor figures of 12 million per month, a number that represents 60% of Australia’s adult population and 37% year on year growth. The portal also boasts 3.2 times more traffic than that of its nearest rival Domain according to a Nielsen content rating.
As for domestic profitability, today’s report states that realestate.com.au will not be raising prices for its customers until 2021 due to the continued uncertainty around covid related market restrictions, and no specific financials were reported around the Australian portal business for the quarter. Although we can surmise from this that covid has negatively impacted the bottom line here, with entrenched market dominance and a strong balance sheet “with low debt levels and a cash balance of $187.5m”, this is hardly likely to matter in the medium to long term.
Looking at REA’s significant overseas interests, the group claimed increased market leadership in Malaysia as traffic for iProperty in the country was reportedly as high as 1.4 times that of rival PropertyGuru. As for Move, Inc., (the parent company of #2 US portal player Realtor.com of which REA Group owns 20% and News Corp owns 80%), the numbers are rosier than last quarter with a 12% revenue increase reported and a lower cost base.
The other big news from REA with regards to its overseas interest came from India where the company took a controlling interest in Elara Technologies (the parent company of Housing.com and Makaan) back in October. The incorporated financials are expected to be reported from December if all goes smoothly.