REA Group confident despite hit from Asia

PROPERTY advertising specialist REA Group says it expects to take a non-cash impairment of about $180 million on the back of weaker market conditions in Asia.

REA said yesterday it planned to take the impairment on goodwill in its results – due in August – for the financial year finishing today.

It was due to a decline in several Asian property markets as a result of changes to government and banking regulations, the company said.

There had been a 33 per cent reduction in the number of properties sold in Malaysia, the group said, while Hong Kong had introduced measures to cool a highly competitive market.

REA chief Tracey Fellows said, while market conditions had been challenging in Asia, the group, majority owned by Bulletin publisher News Corp, remained confident in the long-term growth opportunities in the region.

“We continue to invest in senior leadership to drive strategy and our focus on innovation and marketing positions us well for the market recovery,” she said in a statement.

The owner of the realestate .com.au property portal said the impairment had no impact on current trading and would not affect its compliance with banking covenants.

REA shares dipped 0.8 per cent yesterday to $67.45.

The impairment outcomes are subject to the finalisation of the company’s full-year results, which are due for release on August 11.