The portal operating company REA Group has announced its financial results for the third quarter of the Australian financial year. The Melbourne-based company's performance was solid amid a housing market that is picking up with revenue increasing 8% year on year to AUD225.6 and EBITDA increasing to AUD123.3 representing a 13% gain.
Growth in the quarter was particularly strong in February and March after a flat January with new listings coming to market particularly strong in Melbourne (+13% on the quarter). The company's flagship portal Realestate.com.au saw record traffic of 13.2 million users and 137.3 million visits in March representing what REA say is 3.2 times the traffic of its nearest competitor, Domain.
Commenting on the results, CEO Owen Wilson said:
“Australia’s property market is in full flight, with this positive momentum contributing to strong listings growth for the quarter. Once again, realestate.com.au set new audience records and delivered over 3 million buyer enquiries per month, an increase of 82% for the quarter.”
As for other areas of the business, new development projects were up 14% after being severely affected by the pandemic throughout 2020, data and media services were down slightly and financial services suffered slightly due to "a reduction in partnership revenue".
REA's overseas business interests were a mixed bag over the quarter with Move Inc (operator of #2 US portal Realtor.com) seeing a 37% revenue gain on the quarter on the back of a strong domestic US housing market, while iProperty Malaysia's revenues continue to be heavily affected by the pandemic along with Elara Technologies (operator of Housing.com and Makaan) in India which delivered an AUD7.3m EBITDA loss in line with expectations.
The quarterly financial update also mentioned REA's proposed acquisition of mortgage brokerage Mortgage Choice which the company aims to complete by July with the press release stating that:
"The proposed acquisition aligns with REA’s financial services strategy by leveraging the Group’s digital expertise, high intent property seeker audience and data insights across a larger network. It also complements the existing Smartline broker footprint, resulting in greater national broker coverage."
The acquisition would see REA Group follow US giant Zillow down the path towards incorporating its own mortgage offerings into the portal.
REA Group's share price hit highs of $160 last month since March 2020 lows of $133. Unlike many US tech stocks which have seen considerable pullback since early 2021 highs, REA has not seen dramatic drops since and at the time of writing is trading at $156.