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REA credited larger average loans along with higher settlements and submissions for growth in its financial services arm in 1H25.
REA Group, parent company of realestate.com.au and major brokerage Mortgage Choice, has reported revenue and profit growth in its financial results for the half-year ending 31 December 2024 (1H25).
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The group reported a net profit of $313.9 million for the half – up 26 per cent on 1H24 – while earnings before interest, tax, depreciation, and amortisation (EBIDTA), excluding associates, rose 22 per cent to $535.4 million.
Group revenue climbed 20 per cent to $872.9 million.
The financial services arm of the group (which includes Mortgage Choice) saw revenue increase 13 per cent year on year to $41.0 million.
The loan book inched up 1 per cent year on year to $90.3 billion while broker numbers remained stable at 1,076.
Volumes were positive in the half, with submissions up 13 per cent year on year and settlements increasing 6 per cent on a year earlier to $11.9 billion.
REA attributed the growth to greater penetration of higher-margin white label products, increased productivity across the broker network, and higher average loan size by brokers.
Commenting on Mortgage Choice, REA said brand investment had helped deliver revenue growth and value to its broker network.
Looking ahead, the company also said that strong employment, high immigration levels, and expectations for interest rate cuts in the first half of 2025 continued to support buyer demand and vendor confidence to list.
Noting the results, group CEO of REA Group, Owen Wilson, told investors that “market conditions have continued to improve for REA’s financial services business, with a combination of product innovation and brand investment continuing to drive revenue growth.”
Commenting on economic conditions, Wilson told investors: “The Australian property market remains healthy and reached a more balanced level of supply and demand during the half. Buy demand has been supported by continued immigration, healthy employment levels and the view that interest rates have peaked.
“This buy demand, coupled with steady house prices, has given vendors the confidence to bring their properties to market.”
Wilson also said that “the expectation of at least one interest rate cut in the first half of 2025 will support the health of the market”, before adding that recent weaker-than-expected inflation figures make an interest rate cut “even more likely”.
CEO to step down
On the same day as reporting 1H25 results, REA announced that Wilson will retire from full-time executive roles in the second half of 2025 after 10 years with REA and six years as CEO.
REA has begun the search for a new CEO and is considering both internal and external candidates, the company said.
He will remain with the business to ensure a smooth transition.
Wilson said: “It has been a privilege to lead REA Group for the past six years and I am proud of all our team has accomplished. The business is in excellent shape as evidenced by the results we have announced today. We have an exciting strategy and a talented and committed team to deliver it.”
REA Group chairman Hamish McLennan congratulated Wilson on his tenure: “After more than 10 glorious years at REA Group, Owen has decided to retire. His stellar leadership leaves the company exceptionally well positioned and REA is one of the best home-grown technology companies which has flourished into being a global leader.
“Our board and staff sincerely thank Owen for his contribution in building an incredible organisation under his outstanding leadership.”
[Related: REA Group to buy share in non-bank lender]
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