REA RIDES HIGH DESPITE RATE RISES
ONLINE listing company REA Group says it can keep performing through the property slowdown as it delivered a $205m interim profit.
The company, which has diversified into financial services and has a growing operation in India, noted interest rate increases and softening consumer sentiment had hit housing prices and volumes.
However, it says longerterm housing market fundamentals are positive.
“While the full effects of higher interest rates will take some time to become apparent and price declines are expected to continue, we anticipate stabilisation of the interest rate cycle will improve confidence and encourage increased activity,” REA chief executive Owen Wilson said.
Mr Wilson cited low unemployment, anticipated wage growth and rising migration as positive forces.
REA, majority-owned by News Corp, publisher of this masthead, said interim revenue rose 5 per cent to $617m and earnings before interest, taxes, depreciation, and amortisation, excluding associates, was down 2 per cent to $359m. Net profit fell by 9 per cent to $205m.
Revenue growth was underpinned by 3 per cent growth in Australia. REA India revenue was up 48 per cent year on year.
Mr Wilson said Australian property was “heavily impacted” in the first half by unprecedented consecutive interest rate hikes.
“Despite these conditions, REA continued to deliver revenue and yield growth during the half. This performance underscores the strength of our products and audience, with customers increasingly relying on our premium products to maximise the impact of their campaigns,” he said.
REA will pay a 75c a share interim dividend. Shares in the company fell $3.18 to $121.25.
In January, national residential new listings were down 9 per cent year on year.