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The multinational property services group has assumed 100 per cent ownership of an Australian mortgage brokerage.
REA Group has released its full-year results for the 2019 financial year, in which it has confirmed that it has purchased the remaining minority stake in Smartline Personal Mortgage Advisers for $16 million.
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REA Group, which is the parent company of realestate.com.au, initially acquired 80.3 per cent of the Smartline business in June 2017 for $67 million while also entering into a strategic partnership with NAB.
Following its acquisition of Smartline’s remaining minority stake, REA Group CFO Janelle Hopkins commented: “Since joining REA Group in 2017, Smartline has become integral to our strategy to allow Australians to search, find and finance property all from one place.
“[This] announcement will provide us with even greater scale and long-term capability.”
Sam Boer, CEO of Smartline, said that the acquisition is a further “step forward in the evolution of the Smartline business”.
“We are delighted to be further consolidating our relationship with REA Group, combining Smartline’s expert mortgage broking franchise and quality network of advisers with REA Group’s digital reach and expertise,” he said.
FY19 results
In its FY19 results, REA Group’s Australian division reported revenue growth of 8 per cent to $862.3 million.
According to the group, the improvement was driven by an increase in residential property services-related revenue of 8 per cent to $555 million and the inclusion of the Hometrack business.
However, REA Group’s financial services division has recorded an 8 per cent reduction in revenue when compared to the FY18, down from $29 million to $27 million.
The group attributed the decline to “tighter lending conditions” and the “subdued property market”, which it said impacted mortgage settlements across the industry.
REA added that while the federal election result and recent changes in the lending market have “reduced uncertainty”, it expects the decline in mortgage settlements to continue into the first half of FY20.
When including its global operations, REA Group’s revenue increased from $807.7 million to $874.9 million.
The global group’s net profit after tax increased 6 per cent to $295.5 million.
Reflecting on the overall result, REA Group CEO Owen Wilson commented: “REA has delivered a strong result in a year of unprecedented market conditions.
“Our continued revenue growth was achieved despite significant declines in listings and new developments, a clear illustration of the value we deliver to customers and consumers.”
[Related: Here for the long haul: CBA commits to brokers ]
