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REA Group's HY profit up on Aust listings

Simone Ziaziaris  |  09 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] REA Group's (ASX: REA) Australian arm has driven a 21 per cent lift in half-year underlying profit despite a slowdown in the housing market, but the company has warned it expects conditions to decline further in the second half of the year.

The News Corp-controlled online real-estate advertiser reported an underlying profit of $147.3 million in the six months to December 31 and a 21 per cent jump in revenue to $406.8 million.

Net profit sank 55 per cent to $132.4 million, down from $292.1 million a year ago when the company made $161.6 million from the sale of its European operations atHome Group and REA Italia.

REA, which advertises property and property-related services on websites and mobile apps across Australia and Asia, said revenue was boosted by a strong performance in its core Australian business which was achieved despite lower new dwelling commencements.

Total residential listings were marginally down during the half, but listings grew in Melbourne and Sydney, chief executive Tracey Fellows said.

"This is an exceptional result," Ms Fellows said on Friday.

"While there has been an impact because of fewer project launches, our growth has been boosted by a more positive residential listings mix."

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Despite the positive result, Ms Fellows said the decline in new project commencements seen during the first half is expected to continue in the second half of the financial year and to impact revenue growth in the Developer business.

"We are seeing early signs that Melbourne and Sydney have growth in listings, but we are seeing across the country no significant increase in listings, which are the conditions we have seen in the last couple of years."

Australia's listing depth revenue, which relates to agents paying more to feature prominent listings of a property, increased 21 per cent to $295.6 million driven by an increased yield, despite a decrease in listing volumes.

REA also said its new financial services segment realestate.com.au Home Loans, which started during the half, generated revenue of $13.2 million.

The Australian business also contributed the bulk of earnings, followed by its Asian business, while earnings from the North America and Corporate divisions underperformed.

REA GROUP UP ON AUST BUSINESS:

* Underlying profit up 21pc to $147.3m

* Revenue up 21pc to $406.8m

* Fully franked interim dividend of 47cps, up seven cents

 

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is an AAP journalist.

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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