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The multinational property services giant has posted a 13 per cent increase in revenue despite continued weakness in the credit and housing space.
REA Group has released its financial results for the third quarter of the 2019 financial year (3Q19), reporting revenue total of $667.8 million, up 13 per cent from $592.3 million in the previous corresponding period.
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Revenue growth was offset by a 9 per cent rise in the group’s expenses, which increased from $241.2 million to $263.1 million.
The improvement in the group’s bottom line came despite a 9 per cent decrease in national listings over the three-month period – including listing declines of 18 per cent in Sydney and 12 per cent in Melbourne.
According to REA, the revenue growth reflects price changes that took effect from 1 July 2018, an “improved product mix and depth penetration”, and a stronger contribution from some of its product offerings.
The group added that its commercial and developer businesses also achieved revenue growth despite the continued “significant decline” in the volume of new project commencements.
The company also stated that its recently acquired Hometrack business also contributed to revenue growth, with the subsidiary expected to deliver the previous FY19 revenue guidance of between $14 million and $16 million.
However, REA’s financial services division reported a fall in revenue, with mortgage settlements via its broking subsidiary, Smartline Home Loans, declining off the back of “tighter lending conditions and the continued uncertainty in the property market”.
The group noted that it expects the decline in mortgage settlements to continue for the remainder of the financial year and into the first quarter of FY20.
Reflecting on the overall result, REA Group CEO Owen Wilson said he was pleased with the company’s overall performance but he lamented the current operating environment.
“Our ability to continue to deliver growth despite the significant market headwinds is testament to the strength of our business,” he said.
“We remain focused on supporting our customers who clearly recognise the value we deliver, demonstrated by depth penetration reaching record levels during the quarter.
“It’s almost a decade since we’ve seen market conditions like these, especially in Sydney where the decline has been the most pronounced.”
Mr Wilson said he expects market uncertainty to ease over the coming months.
“With the banking royal commission now behind us and the federal election taking place next weekend, we expect less uncertainty surrounding the property market as we enter the new financial year,” he said.
[Related: ‘Aggressive’ competition stunts Westpac’s mortgage growth]
