Online real estate advertising company REA Group (ASX:REA), have released their half-yearly results for the 6 months ending 31st December 2015.
The report reflected some sustained growth in revenue, operating cash flow, and EBITDA (Earnings before Interest, Tax, Amortisation and Depreciation).
Revenue for the half year ending 31st December 2015 was $314.8 million. This is a 7.5% improvement in revenue, when compared to the PCP. Likewise, Cash Flow from Operating Activities was $329.8 million. Reflecting almost 18% growth in ongoing business operations. Moreover, EBITDA was $180 million, advancing 2.6% to the PCP.
While net profit from core operations rose 28% for the period, the overall profit declined 9% compared to the PCP, at $115.1 million. However, this decrease was in part attributed to the group’s share of losses in Asian based, ASX listed online real estate company iProperty Group Ltd (ASX:IPP), along with US based company Move Inc. The total share of losses was approximately $5.8 million.
The Group’s websites within Australia, Europe, along with Asia all recorded improved results for the year. Australia remained the key contributor, delivering 92% of the businesses revenue.
Moreover, the group garnered average monthly visits of 70.6 million for the period. This is a 29% expansion, when compared to the PCP. Property listings remained relatively stable, at 1.6 million in December 2015.
As briefly mentioned before, REA has aimed to expand investment internationally. During this period, the group announced its intention to acquire the remaining shares iProperty Group Ltd, in which they already have a 22.7% interest. This deal will be struck with REA acquiring the remainder of the equities for $4.00 per share, by mid-February 2016. However, IPP shareholders could also elect to receive $1.20 cash, along with shares in a company that would have indirect exposure to IPP, for a period of 2 years post-closing. IPP shareholders approved the overall scheme on the 28th January 2016, with final court approval obtained on the 2nd February 2016. This deal will be predominately funded by new debt facilities totalling $480 million, with the remainder from existing cash.
The board of REA declared a 100% full franked dividend of $0.36 per share. With the Ex-Dividend date being on the 2nd of March 2016, along with the Payment date on the 11th March 2016.
The dividend is over 11% lower to the previous dividend ($0.405 per share), which was paid on the 14th September 2015.
Investors haven’t reacted very positively to the half-yearly results, with REA down approximately 1.6% (As at 10.31am AEDT), to $50.39.
Author: Ben Khouri
Feb 05, 2016
Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.