REA (ASX:REA) revenue lifts in September quarter

Online real estate advertiser REA Group (ASX:REA) has recorded revenue excluding acquisitions of $264 million for the September quarter, up 22 per cent year-on-year driven by an increase in free cash flow and national listings.

Free cash flow of $49 million rose 29 per cent year-on-year and earnings before interest, taxes, depreciation and amortisation jumped 25 per cent year-on-year to $158 million.

The company notes that the Australian residential property market showed resilience during the quarter. After modest declines in July, national listings increased 11 per cent for the quarter, with Sydney down 7 per cent and Melbourne up 79 per cent due to lockdown impacts in the prior period.

“REA has delivered an impressive result given the prolonged lockdowns in Sydney and Melbourne. Our performance reflects the continued value our premium listing products are delivering to our customers, and realestate.com.au’s clear position as the number one place to search, find and finance property,” said CEO Owen Wilson.

“Our teams have made excellent progress across a number of key initiatives including the integration of our Mortgage Choice and Smartline businesses, the roll out of new products such as our Connect offering and our integrated rental applications platform, all of which provide the foundations for continued growth.”

REA also noted that Australian residential revenue for the quarter was benefited from increased depth and Premiere penetration, listings growth, the contracted price rise from July 1, and continued growth in add-on products.

“On average, 12.6 million people visited realestate.com.au each month during the quarter, with a record 7.3 million people choosing to use our site exclusively in July. Buyer enquiries also reached record levels during the quarter, up 61 per cent year-on-year, providing our customers with an increasing volume of qualified leads.

“As vaccination milestones are met and restrictions continue to be lifted, we expect property markets across Australia to revert to normal operating settings. Buyers remain out in force and this strong demand is likely to fuel ongoing positive momentum.”

Shares in REA Group (ASX:REA) are trading 3 per cent higher at $172.51.