To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The REA Group Ltd (ASX:REA) has announced its full-year results for the year ended 30 June 2022, reporting its core operating revenue increased 12 per cent year-on-year (YoY) a pro forma basis to $79 million, following its $244 million acquisition of brokerage and aggregator Mortgage Choice.
In Australia, REA Group operates the leading residential and commercial sites realestate.com.au and realcommercial.com.au, data and insights business, PropTrack, as well as mortgage broking business, Mortgage Choice.
While Mortgage Choice has continued to operate under its own brand following REA's acquisition of it, and its merger with Smartline, REA said it had injected a “refreshed” brand to market, supported by a “national, multi-channel media campaign”.
The property group reported 154 new recruits joined its broker network taking it to 1,002 (up 6 per cent YoY).
Overall, REA reported $1,116 million in core revenue, up 23 per cent YoY, or 18 per cent excluding the “impact” of the Mortgage Choice acquisition.
In addition, its core operating costs increased 34 per cent, which it said was “largely driven” by the Mortgage Choice and REA India acquisitions.
The group’s operating revenues, across its financial services, benefited from a 28 per cent increase in settlements, driven by continued broker network growth, and increased productivity in a strong housing market, partly offset by higher broker payout rates.
The report highlighted a 13 per cent increase in mortgage submissions and 26 per cent uptick in settlements YoY.
It also recorded $66 million in net revenue for its financial services a -2 per cent fall YoY, which was “partly offset” by higher broker commission payout ratios and higher run-off rates. Of this revenue Mortgage Choice accounted for $44 million.
Further, revenue was negatively impacted by a $13 million valuation adjustment to expected future trail commission due to “faster loan run-off rates” and “higher broker commission payout ratios”.
The report also highlighted the success of its new partnership with Ubank and home loan comparison experience with Simpology.
Commenting on the FY22 results, REA group chief executive officer Owen Wilson said it had been an “exceptional year” for REA.
“The record take up of our premium listings products enabled us to fully capitalise on the buoyant listings environment, and it demonstrates the value we provide to our customers and vendors,” Mr Wilson said.
“Key milestones were also achieved in our property data, financial services and Indian businesses, building strong momentum. These markets present great opportunities and the revenue contribution of these businesses is growing rapidly.”
[Related: Mortgage Choice official joins REA Group]