REA Group slumps after posting 24% net profit decline
Make us a preferred source
Make us a preferred source on Google
More news: Shares in REA Group slumped in early trade after the real estate listing platform reported a 24% decline in net profit after tax, citing distortions from the gain on the sale of PropertyGuru.
Shares fell 10.01% to $164.14 at 12:44pm AEDT.
RBC Capital Markets analyst Garry Sherriff maintained a 'sector perform' rating on the stock, with a target price of $225 per share.
Meanwhile, Jarden analyst Tom Beadle flagged modest downside risk to the consensus EBITDA, and said the $200 million share buyback would be a key focus. He retained a 'neutral' rating, setting a 12-month price target of $196 per share.
REA Group posts 24% net profit fall on prior-year PropertyGuru gain
The news: News Corp-controlled real estate listing platform REA Group posted a 24% decline in net profit after tax compared to the previous corresponding period, mainly due to the distortion from the gain from the sale of PropertyGuru in the comparable period.
The numbers: Net profit for the first half came in at $336 million, slightly below the market consensus estimate of $345.32 million, according to Visible Alpha. Revenue lifted 5% to $915.8 million, which was below the expected $927.36 million.
Residential revenue increased 7% to $658 million while buy revenue growth was driven by a 14% increase in yield. This was partially offset by a 6% decline in national listings.
REA declared a fully-franked interim dividend of $1.24 per share, higher than the $1.10 declared in the previous corresponding period but below the expected $1.47 per share.
The context: REA Group saw 12.7 million people visit each month on average, with a record 13.2 million in November with 6.4 million people exclusively using realestate.com.au.
it also flagged plans to roll out an OpenAI powered conversational search tool in Q3 as well as customer AI engagement program.
What they said: "REA Group's first half performance was underpinned by strong double-digit yield growth in our residential business. Our focus on richer, more immersive consumer experiences supported record audience and strong engagement," REA Group CEO Cameron McIntyre said.
McIntyre also said: "The Australian property market remained healthy, led by a strong listing environment in Melbourne and Sydney with steady interest rates, population growth and strong employment supporting record levels of demand".
