REPORTING SEASON: REA Group Ltd (REA)

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Figure 1: REA Group Ltd 12 month chart

 

Strong Australian property market boosts profit

·         REA Group (REA), the digital advertising company behind property site realestate.com.au posted a solid 37% rise in FY14 Net Profit to $149.8m

·         Profit, which has increased yearly since 2009 was helped most by a 30% rise in revenue from its Australian business together with improved margins

·         Record low interest rates, strong population growth and increased demand for property helped lift earnings from ‘residential property’ ads by 33% to $252.9m

·         REA has been moving away from a ‘subscription model’ and instead sellers/agents are paying for each property listing separately on their websites – which has boosted revenue

·         REA has consistently invested more than $45m/y on innovation and its technology platform

·         A 30% franked final dividend of $0.35 per share will be paid to eligible investors on 25 Sept

·         REA also operate websites in China, Hong Kong, Italy, Luxembourg, Germany and France

·         REA Group shares fell following the result however are improving for the sixth straight year; up 16% this calendar year and 1200% firmer since August 2008

 

You can see all of CommSec’s reporting season analysis by clicking here.

Steven Daghlian, Market Analyst,