Property Advertiser REA Lifts Dividend as Annual Profit Rises 24% — Update

By Stuart Condie

SYDNEY--REA Group raised its dividend and flagged strong demand at the start of its new fiscal year as the Australian real-estate advertiser lifted its annual profit by 24%.

The ASX-listed company on Friday reported a core-operations net profit for the 12 months through June of 460.5 million Australian dollars (US$303.6 million), compared with A$372.2 million a year earlier. Revenue rose by 23%, to A$1.45 billion.

REA raised its final dividend to A$1.02 a share, from A$0.83, for a full-year payout of A$1.89 a share.

The average analyst forecast was for a profit of A$457 million from revenue of A$1.45 billion, according to data compiled by FactSet.

Including one-off items including an impairment against its PropertyGuru business, REA's statutory net profit fell to A$302.8 million, from A$356.1 million a year earlier.

Australian domestic listings rose 7% over the fiscal year. REA had flagged growth of about 3-5% as recently as February, before raising its guidance to 5-7% in May as demand including from record migration helped to sustain domestic property markets.

REA said that Australian new residential listings were up 12% on year for the first month of its new fiscal year. Expectations that interest rates will remain unchanged into 2025 should help confidence in property markets, it said.

REA is aiming to grow revenue at a faster pace than operating expenses in fiscal 2025, despite flagging increased salary and tech costs in Australia.

The average Australian home price rose by 8.0% over the 12 months through June, according to property analytics firm CoreLogic. The annual number of homes sold in the period jumped 8.6% from the prior 12 months and was almost 5% above the previous five-year average, CoreLogic said.

Many analysts remain bullish on REA despite the stock more than doubling in value since June 2023. Analysts have pointed to REA's product investment, flexible costs and elevated exposure to Sydney and Melbourne--Australia's two largest property markets--as supporting factors.

"In a strong market, particularly in Melbourne and Sydney, customers increasingly preferenced our premium products to leverage the strength of our audience and maximize their campaigns," REA Chief Executive Owen Wilson said.

REA is 61% owned by News Corp., which owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

August 08, 2024 18:58 ET (22:58 GMT)

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