REA Group has recovered from an early share price dive after flagging hopes that a population-driven demand for housing will help it recover from a first-half affected by a building activity and listing downturn.
The realestate.com.au owner said on Friday profit from core operations for the six months to December fell by 13 per cent to $152.9 million amid challenging market conditions.
This decline was driven by a 14 per cent fall in national residential listings during the period – including a drop of 17 per cent in Sydney and 16 per cent in Melbourne – while developer project commencements also slipped by 30 per cent.
The company took an early share price hit following the announcement but approached the close of trading as one of the bourse’s stronger performers, climbing 3.19 per cent or $3.62 to $117.00 by 1507 AEDT.
REA’s stock had fallen by as much as 4.0 per cent to $108.83 in early trade.
Chief executive Owen Wilson said the group has faced unprecedented market conditions in the last 18 months.
Management also expect developer projects to fall by about the same 30 per cent margin this half.
However this could help residential sales.
Mr Wilson said: “We’ve reached the stage where (developers) haven’t built enough (homes) for population growth. So demand is going to be there.
“Anecdotally, customers are feeling a little more confident about this year than they were last year.”
Chief financial officer Janelle Hopkins said REA anticipated more favourable listing conditions in the second half would deliver better revenue.
The company’s $147.6 million net profit result was a vast improvement on last year’s impairment-blighted $2.3 million figure.
REA Group – majority owned by Rupert Murdoch-controlled News Corp – will hold its interim dividend flat at a fully-franked 55 cents per share.
REA’S HALF-YEAR FIGURES
* Net profit down 13pct to $152.9m
* Revenue down 6pct to $440.3m
* Final dividend held at 55 cents per share, fully franked