REA to tar­get agents while Do­main in tur­moil as profit soars

The Weekend Australian - - BUSINESS - DAR­REN DAVID­SON PROP­ERTY

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.

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