Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- REA Group Ltd (ASX:REA, Financial) reported a 23% increase in revenue to $1.45 billion for FY24.
- EBITDA, excluding associates, rose by 27% to $825 million.
- Net Profit After Tax (NPAT) increased by 24% to $461 million.
- The company declared a final dividend of $1.02 per share, bringing the total dividend for the year to $1.89 per share, a 20% increase.
- REA India achieved a 31% revenue increase, driven by strong performance in Housing.com.
Negative Points
- Operating expenses increased by 18% to $628 million, impacting overall profitability.
- The developer business faced challenges with project launches down 13% due to increased input costs and labor shortages.
- Move, the North American business, reported a 10% decline in revenue due to challenging macroeconomic conditions.
- The company anticipates a marginally negative geo mix impact in FY25 due to the strong performance of Melbourne and Sydney in FY24.
- REA Group Ltd (ASX:REA) expects high single-digit group operating cost growth in FY25, driven by increased employee and technology costs.
Q & A Highlights
Highlights of REA Group Ltd (ASX:REA) Earnings Call
Q: What is the outlook for buy yield growth next year?
A: Janelle Hopkins, CFO: Yield growth will primarily be driven by the 10% increase in Premier+ price. The final yield will depend on factors like geo mix, additional depth growth, and the uptake of Luxe. Currently, it's early in the year, so the 10% price increase is the primary driver.
Q: Any early feedback on the Luxe product?
A: Owen Wilson, CEO: Feedback has been very positive, with uptake across various geographies. Luxe is performing as expected, and some agents are becoming early adopters.
Q: How should we think about India's OpEx expense growth?
A: Janelle Hopkins, CFO: High single-digit cost growth is expected for the group, with a bit less in Australia and a bit more in India. The acquisition of Realtair is included in this guidance.
Q: Are you still targeting 1% to 3% jaws for FY25?
A: Janelle Hopkins, CFO: We don't target a specific jaws range, but historically, it has been 1% to 3%. The actual jaws will depend on residential listings performance.
Q: How are you viewing your offshore investments, particularly Move and PropertyGuru?
A: Owen Wilson, CEO: Both markets are good to be in. The US market should rebound as interest rates come down. PropertyGuru is strong in Singapore and Malaysia, and we like being in these growing markets.
Q: What drove the revenue acceleration in India in Q4?
A: Janelle Hopkins, CFO: Higher Housing Edge revenues in the second half contributed to the acceleration. We expect Housing Edge revenue to be flat in FY25, but strong growth is anticipated in the core Housing.com business.
Q: How do you plan to monetize the new feature enabling digital offers through Realtair?
A: Owen Wilson, CEO: This feature will be monetized through our subscription product. It provides valuable insights to our customers about buyer intent early in the process.
Q: Can you talk about the geo mix trend, particularly in Q4 and July?
A: Janelle Hopkins, CFO: In Q4, other cities like Brisbane started to turn positive, reducing the geo mix benefit. We expect a small negative drag in FY25.
Q: Are you seeing an acceleration in the take-up of the pro subscription product?
A: Owen Wilson, CEO: It's still early, but penetration is where we expected it to be. Pro subscribers are getting more seller leads, and we expect uptake to increase as proof points play out.
Q: Can you confirm that positive jaws are also expected for the Australian business in 2025?
A: Janelle Hopkins, CFO: Yes, we are targeting positive jaws for the Australian business in 2025.
Q: Is there a price differential between an ad purchase direct or upfront versus through CampaignAgent?
A: Owen Wilson, CEO: There is no price differential; the cost is the same whether purchased upfront or through CampaignAgent.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
