REA profit jumps 23pc, amid weaker property market
Amid a drop in online listings, the company — which operates the websites realestate.com.au, realcommercial.com.au and Flatmates.com.au — reported its revenue lifted 20 per cent to $807.7 million.
“While total residential listings declined approximately 2 per cent for the year, there was a moderate increase in Melbourne and Sydney,” REA said in a statement on Friday.
“Listings in these key markets were up strongly in the first half however listings in Sydney declined in the second half.”
The real estate company will pay shareholders a fully-franked final dividend of 62 cents per share, which is a 30 per cent gain over last year.
“It’s been a year of unprecedented product launches focused on delivering value for our customers,” REA’s chief executive Tracey Fellows said.
“This has been led by our new suite of Agent Edge products providing onsite branding and connecting customers with potential sellers.”
But REA has flagged some risks ahead, like its expectation of “weaker listings” ahead of the Victorian and NSW state elections — in November and March respectively.
It also forecast “significantly lower” new project commencements for the current financial year, particularly in the east coast capital cities of Sydney, Melbourne and Brisbane.
Australia’s residential construction is expected to plunge nearly 23 per cent by 2020, according to forecaster BIS Oxford Economics.
“If that eventuates, revenue in the developer business is expected to be up slightly year-on-year with the decline in volumes more than offset by further new customer acquisition and the benefit of longer duration of project profiles,” REA said.
Rupert Murdoch’s News Corp owns a 62 per cent stake in REA Group.
News Corp’s digital real estate division — which includes REA and realtor.com — was one of the strongest parts of its business, amid a $US1.4 billion full-year loss.
REA shares have jumped 2.1 per cent to $84 at 12:00pm AEST.