Best house in the street
Need to know
- REA expecting double-digit yield growth in FY23f for core Australian business
- Listing volumes up 7% in July, but ‘low to mid-single digit growth in FY23
- Positive cost ‘jaws’ for FY23f
- FY22 final dividend 89cps fully franked, payment
date 15 September
Investment implications
Another strong Australian property result, tempered by softness in Financial Services. The core Australian business is humming with FY22 EBITDA up 17% yoy on revenue growth of 23.7% in 2H22. That was
driven by an 11% increase in listings and 14% growth in yield. The latter is a key theme for REA and will support burly growth for some years to come.
Higher losses at Elara (India) and Australian Financial Services detracted from the result and will drag on FY23f profit. Mortgage Choice is still being integrated while greater investment in the fast growing Indian business will extend losses.
Outlook commentary is staunchly positive albeit allowing for moderating Australian house prices on interest rate rises. Fundamentally, says REA, the economy is good with low unemployment, high household savings and increasing migration (interstate, we presume).
Figure 1: FY22 Result
This commentary reflects our initial view. For detailed reports for companies under Sandstone Insights coverage, see our latest research notes for our investment view and specific risks associated with investing in these companies.
Stock overview
Share price
Company overview
REA Group is a global digital business specialising in online real estate. It has a leading market position in Australia. It owns and operates adjacent businesses in home loans, mortgage applications, property data services and an array of other property related service businesses.
Price performance
Disclaimers and Disclosures
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