REA Group’s strong results
Monday, February 25, 2008/
A slowing economy and more cautious property market has helped the REA Group to announce a 68% jump in EBITDA growth and 50% revenue growth for the half year ending 31 December 2007.
REA Group, which includes realestate.com.au and subsidiary companies, says revenue has jumped to $71.4 million from $47.7 million for the previous corresponding half. EBITDA also has jumped to $14.2 million from $8.4 million.
Australian revenues were up 39% to $54.9 million. Subscribing Australian agents increased to 8824, representing about 95% of Australian agents.
CEO Simon Baker says the Australian business delivered strong growth, with agents buying more products, developers and display advertisers increasing their spend, and more customers visiting sites.
Baker says there have been more listings on the market and the listings are staying on the sites for longer. “The cost of print is not going down, so if people know they are going to be listing for longer, they will list online.” He says agents are also reporting getting more leads from online and so are increasing their spend.
Other highlights were paying agents increasing 56% to 18,931 as at 31 December 2007. Property listings grew 58% to a record high of 1.15 million and combined traffic across all sites averaged 7.3 million per month, a 55% increase on year. This resulted in more than 8.8 million unique browsers in January, 2008.
The Packer/News consortium MyHome, which launched last year, has “come and almost gone.
And Fairfax with Domain is more interested in protecting the print product than developing online,” he says.
Challenges ahead include choosing which new markets to enter and how to do it. “We will consider all markets except Africa and Antarctica; well until penguins can type.”
Some countries are running at a loss. “But that is because we are investing in them,” he says.
The UK and Italy delivered strong results, with the UK increasing revenue by 42% over the corresponding half in fiscal 2007. “We are number one in Italy and a clear number two in the UK,” he says.
The other challenge is to maintain the culture while growing a global company. “We now have operations in 12 countries. We are working with each country’s managers and they get better and better.”