REA to target agents while Domain in turmoil as profit soars
REA Group chief executive Tracey Fellows wants to consolidate the real estate firm’s marketleading position as she seeks to “take advantage” of turmoil at rival Domain after it parted company with her opposite number Antony Catalano.
REA is planning to ramp up marketing activity and deepen re- lationships with real estate agents. “Whenever your competitor is distracted you have the opportunity to be very visible in market with customers, so we’re certainly taking advantage of that,” Ms Fellows told The Weekend Australian.
Analysts have noted that Catalano had deep relationships with agents, particularly in the Melbourne market. They have expressed concerns that any loss of those relationships poses a risk to Domain.
“We’re fortunate to already have a market-leading position but in the end without him (Catalano) at the helm perhaps some of those direct relationships with clients are gone — we see that as an opportunity.”
Recently Domain executive chairman Nick Falloon launched a review of the company’s “working environment” after Catalano was accused by Fairfax Media press of presiding over a “boy’s club”. Domain is 60 per cent owned by Fairfax. Ms Fellows was speaking after strong demand for REA premium advertising products pushed revenues 21 per cent higher, bucking a fall in total property listings.
REA, operator of realestate.com.au, recorded revenue of $406.8 million and net profit of $147.3m — a rise of 21 per cent.
Earnings before interest, taxes, depreciation and amortisation increased 21 per cent to $242.8m for the six months from July to De- cember. The profit was down from $292.lm a year earlier when the company banked a $161.6m gain on the sale of its European operations to private equity firm Oakley Capital.
Directors declared an interim dividend of 47c per share, up from 40c in the same period a year earlier. REA shares rose 2 per cent to $72.97 yesterday, in the face of a broadly weaker market.
The main revenue driver was the Australian business, with rev- enue up 21 per cent to $384m for the half, and agent numbers up 5 per cent on the prior corresponding period.
At the Australian business, premium ad revenue increased 21 per cent to $295.6m on the back of the group’s Residential Premiere All offering and increased yield, despite a decrease in residential listing volumes during the half.
REA is majority-owned by News Corp, publisher of The Australian.