Australia's REA Group, which provides property and property‐related services on websites and mobile apps across Australia and Asia, recently released its financial statements for the year ended 30 June 2018.
The press release indicates Group operating income grew by 20% to $807.7 million, driven by the continued growth in listing depth products, where agents can upgrade listings to feature more prominently. Additionally, Smartline operating income was included from 1 August, which was not included in the prior comparative period.
The Group achieved a 22% increase in EBITDA from core operations to $463.7 million and a 23% increase in net profit from core operations to $279.9 million. Operating expenses increased due to the inclusion of the new Financial Services segment and continued investment in strategic initiatives including an increase in marketing for both Australia and Asia.
Operating income grew across all regions for the year and Australia remained the primary revenue driver for the business. Revenue growth in Australia reflects the success of REA’s strategy to promote depth products, corporate expansion plans, and continued product innovation, all of which have strengthened customer relationships and the consumer experience.
In Australia, realestate.com.au is the number one place for property. It has maintained its lead with the largest and most engaged audience of property seekers, with more than twice the visits compared to the nearest competitor site across all platforms.
Corporate expansion and investment activities
The Group has continued to deliver on its global strategy and corporate expansion:
On 31 July 2017, the Group completed its acquisition of an 80.3% stake in Smartline. Smartline is one of Australia’s premier mortgage broking franchise groups with over 300 advisers nationally, settling more than $5 billion in loans annually with a total loan book of approximately $26 billion. The Group’s purchase consideration was $82.1 million, of which $67.6 million was funded from existing cash reserves with the remainder recognised as contingent consideration as at 30 June 2018.
In September 2017, the Group acquired a 70% share in a newly formed company ‘realestate.com.au Home Loans’, a mortgage
broking business owned by Advantedge Financial Services Holdings Pty Ltd, a subsidiary of National Australia Bank (‘NAB’). Through this partnership with NAB, realestate.com.au launched realestate.com.au Home Loans, an Australian first end‐to‐end digital property search and financing experience. The Group also launched its realestate.com.au Home Loans mortgage broking offering, where consumers have access to more than 30 lenders.
On 1 June 2018, the Group acquired 100% of Hometrack Australia Pty Ltd (‘Hometrack Australia’). Hometrack Australia is a provider of property data services to the financial sector. Its suite of products includes property data analytics and insights, customised data platforms and an Automated Valuation Model (‘AVM’). The purchase consideration of $126.3 million was funded from existing cash reserves and debt of $70 million.
Strong operational results, offset by key investment activities and shareholder returns in the form of dividends, resulted in a cash balance of $115.8 million and net current liabilities of $21.5 million as at 30 June 2018. During the year, REA made significant deferred consideration payments in relation to recent acquisitions, which reduced the cash balance at 30 June 2018. The Group generated positive operating cashflows and traded profitably for the year. The Directors expect this to continue into the foreseeable future.
Dividends paid or declared by the Company during, and since, the end of the financial year are set out in Note 10 to the Financial Statements and below:
Source: Average monthly visits to the realestate.com.au site and app versus the domain.com.au site and app for the year ended 30 June 2018. Web visits: Nielsen Market Intelligence – Home and Fashion; App launches: Nielsen Digital Content Ratings.
REA Group's Financial Statements for the Year Ended 30 June 2018 - Full Article
SOURCE REA Group Ltd
Edited by Gordana Davila
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