Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

REA Group FY20 results unpacked

We examine the highlights from real estate advertising company REA Group’s latest set of full-year results.

REA Source: Bloomberg

REA Group share price rises even as market conditions deteriorate

Real estate advertising company – REA Group (REA) – saw its share price rise on Friday after releasing its full-year results to the market.

Here, the company reported a mild slump across both the top and bottom-line, while noting that the outlook for Australia’s property market remains uncertain due to the coronavirus pandemic.

Despite these headwinds facing the property market, the REA Group share price has outperformed the ASX 200 benchmark year-to-date, rising 5.79% in that period – to finish Friday’s session at $113 per share.

Speaking to how the company has handled the current situation, the Group’s Chief Executive Officer, Owen Wilson today said:

'In these challenging conditions, our products and services are playing an increasingly vital role in supporting our customers and vendors. Ensuring Australia has a well-functioning property sector remains core to our purpose and vital for our country's long-term economic growth.'

Full-year results unpacked

On the top-line, REA Group saw its revenue contract 5% 6% to $820.3 million -- down from revenues of $874.9 million. This result, said management, was driven by a reduction in the 'Residential and Developer businesses.'

In step with those revenue declines, residential listings exhibited weakness across the board, declining 12% on a national level, and 6% and 8%, in Sydney and Melbourne, respectively.

Listings were impacted by two key factors according to the Group, with management attributed H1 FY20 listing weakness to the restrictive lending environment caused by the Hayne Royal Commission. More recently, it was noted that 'The emergence of COVID-19 in mid-March significantly impacted listing in April and May’ though 'As COVID-19 restrictions eased in June, the real estate market responded positively.'

Despite those declines, engagement on REA's flagship website remain strong, with fourth quarter property views up 29% and buyer enquiries up 46% -- on a year-over-year basis.

By comparison, on the bottom-line, REA reported earnings (EBITDA) of $492.1 million (-5%), against profits (NPAT) of $268.9 million (-9%). The company also declared a fully-franked, final dividend of 55.0 cents per share – taking the company’s full-year dividend to 110 cents per share.

Other bits and pieces

From an operational perspective, the Group boasts a strong balance sheet – with a cash position of $223 million and low debt levels. The Group continues to tightly manage costs in response to the coronavirus pandemic, with first quarter operating costs expected to come in between 5-10% lower than the prior corresponding period.

The outlook: Uncertainty set to persist

Looking forward, REA noted that Melbourne-focused government mandated restrictions are likely to weigh on listings during the lockdown period. Such restrictions, said management, ‘coupled with the projected reductions in new development project commencements and listing volume declines in the Commercial and Asia businesses, is likely to cause adverse impacts on revenue in Q1 FY21.'

Want to take a position in REA Group, long or short?

Create an IG trading account or log in to your existing account to get started now.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on stock opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.