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Domain to repay JobKeeper, scales up brokerage

The property listings group has committed to returning millions of dollars in JobKeeper subsidies to the government while it expands its broker business.

Domain produced a net profit of $37.9 million for the 2021 financial year, 66 per cent more than the year before, while earnings before interest, tax, depreciation and amortisation (EBITDA) was up by 19 per cent, to $189 million.

On a like-for-like basis, Domain delivered $289.6 million in revenue, 9.7 per cent more year-on-year.

The group has indicated that it is optimistic around the property market, despite the ongoing lockdowns.

As a result, Domain has decide to maintain its growth strategy and to pay back $5.7 million in JobKeeper grants it received during FY21 – which will be deducted from its FY22 earnings.

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“In the FY22 year to date, national listings are slightly up on last year. While listings volumes have been impacted by lockdowns, particularly in Sydney, July continued to deliver strong national depth performance,” Domain chief executive and managing director Jason Pellegrino said.

“We remain confident in the resilience of the market, as evidenced by consistent patterns of sharp rebounds when restrictions ease.”

However, the group’s consumer solutions business, which includes mortgage brokerage Domain Home Loans, experienced $6.2 million in EBITDA losses.

Other businesses under the consumer solutions umbrella include home and contents insurance arm Domain Insure, utilities arm Domain Connections and Domain for Home Owners, a personalised extension of the property platform.

The earnings loss had grown from the year before, when the segment had posted $3.6 million in EBITDA losses. Mr Pellegrino reported the hit derived from Domain Home Loans scaling up its headcount to “address operating constraints”.

Expenses of $11.7 million for consumer solutions had increased by 27 per cent from FY20, reflecting boosted investment in Domain Home Loans and Domain Insure.

Revenue for the consumer solutions segment was mostly stable, slipping by 1.2 per cent to $5.5 million for FY21.

Domain Home Loans (DHL) had contributed 2 per cent of the division’s revenue, with the mortgage broker’s underlying revenue growing by 12 per cent.

New accounts with DHL had grown by a third during FY21, while unconditional approvals were up by 29 per cent and settlements rose by 20 per cent.

Mr Pellegrino commented the broking business is expected to ramp up its growth in the coming year.

“Improving fourth quarter conversion metrics, scaled-up headcount and a new management team are expected to accelerate future performance,” he said.

Domain Home Loans recently hired former BrickX boss and Deloitte partner Kareene Koh as its new general manager and chief executive.

During FY21, Domain’s core digital division, including residential; media, developers and commercial; and agent and property data solutions; increased its revenue by 17 per cent year-on-year, to $265.5 million, while EBITDA rose by a third to $130 million.

Meanwhile, revenues from the print magazine business declined by a third to $17.8 million, particularly as publishing activity hit a pause during COVID. Mr Pellegrino reported the mastheads had only published 68 per cent of their usual schedule in FY21.

[Related: New home sales down by a fifth: HIA]

Domain to repay JobKeeper, scales up brokerage
Domain to repay JobKeeper, scales up brokerage
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