Domain posts $156.4m loss as listings fall
DOMAIN has slumped to a $156.4 million first-half loss after a drop in Sydney and Melbourne listings forced the real estate classifieds business to write down the value of its operations.
Domain declared a $178.8 million non-cash goodwill impairment after lower listing volumes meant that, even stripping out the one-off hit, profit for the six months to December 30 dropped 14.2 per cent.
But earnings before inter- est, tax, depreciation and amortisation beat analyst expectations, and Domain lowered its full-year cost guidance. Its shares, which hit an all-time low of $2.08 on Thursday, had soared 41 cents, or 19.6 per cent, to $2.50 by 1.37pm yesterday. However, they are still 34 per cent lower than the opening price of $3.80 at listing in November 2017.
Domain – which lost $6.2 million in the last full financial year – said the result was solid given first-half auction volumes had declined 20 per cent in Sydney and 19 per cent in Melbourne.
“In the context of the current property market cycle, Domain delivered a solid performance in the half, with growth in average revenue per listing,” chief executive Jason Pellegrino said yesterday.
“The result is in line with market expectations.”
Listing volumes continued to fall in the first six weeks of the second half, and Domain said the late timing of Easter combined with upcoming elections would affect the autumn selling season. Domain hopes an advertising deal with major- ity shareholder Nine will help it weather the market slide.
“Nine has a broadcast audience of 19 million people that they reach each month, a digital audience of roughly eight million people that they reach, of which close to five million of that audience are not Domain users,” Mr Pellegrino said.
“So we see a significant upside, but we are taking this cautiously.” Domain said its demerger from Fairfax in October 2017 continued to influence its net result and did not reflect the underlying health of the business.