Despite the ongoing volatility in the real estate market (if you’ve been house hunting, you already know), digital property group REA Group (ASX: REA) has shown strong results in H1 FY24, driven by greater demand and higher prices.
Compared to H1 FY23, the Company saw an 18% surge in revenue to $726 million, coupled with a major 22% rise in EBITDA excluding associates, reaching $439 million. Net profit also experienced a commendable uptick of 22%, totalling $250 million.
However, the reported net profit dipped 37% to $127 million, primarily attributed to the impairment of PropertyGuru and other one-off impacts within the period under review.
REA Group Chief Executive Officer, Owen Wilson, said, “REA has delivered an outstanding result driven by strong yield growth and the benefit of a more normalised listings environment. This resulted in a strong uptake of our premium products as customers sought to leverage our leading audience to maximise their campaigns in the strengthening market. REA India’s momentum also continued with price and customer growth and new premium depth products delivering strong revenue growth.”
Operating predominantly in Australia, REA Group oversees platforms like realestate.com.au and realcommercial.com.au, alongside auxiliary ventures like valuation tool PropTrack and mortgage broking firm Mortgage Choice. Core Australian revenue reached $682 million, marking a 17% year-on-year increase.
The residential segment spearheaded revenue growth, with a 19% surge to $505 million. This increase was primarily driven by a 19% rise in Buy yield and a 4% uptick in national listings, offsetting a 3% negative impact from revenue deferral.
Moreover, REA Group’s Media, Data, and Other revenue witnessed a 21% increase to $60 million, fueled by the robust performance of FinTech company CampaignAgent, which was consolidated in July 2023.
Realestate.com.au, the Company’s flagship site, maintained its dominant position, attracting a significant audience and driving record-breaking engagement. Its average monthly visitors amounted to 10.6 million, and an average monthly visit duration three times longer than its nearest competitor.
Wilson added, “Buy listing views also increased during the half, culminating in a record number of views in October. This reflects both investment in our exceptional consumer experience and strengthening demand in the market. Pleasingly, our focus on the growth of our valuable active membership base continued to yield strong results as we added new features driving deeper engagement and delivering rich new insights for our customers.”
As for its Indian arm, REA India reported a 21% revenue increase to $44 million, with property and advertising revenues soaring by 32%. Housing.com maintained its top position, driven by price adjustments and enhanced marketing strategies. Operating costs rose by 7% to $63 million due to increased investments in employees and marketing. Expectations point to higher growth rates in the second half of FY24.
Looking ahead, REA Group remains optimistic about the future, with Australia’s residential property market showing resilience. Increased listings, particularly in Sydney and Melbourne, alongside strong demand supported by favourable economic conditions, indicate promising prospects.
With January national residential new Buy listings up by 12% year-on-year, REA Group foresees continued growth momentum, albeit at a slightly lower rate compared to the first half of FY24.
It expects losses for combined contributions from associates in FY24 to be between $25 to 30m, reflecting continued tough market conditions in the US and investments for future growth.
Alinda is a Business Reporter for The Sentiment
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