Despite facing significant market headwinds, REA Group Limited (ASX: REA) was able to achieve revenue growth of 7% in 2019 March quarter as compared to the previous corresponding period. Further, the company reported a growth of 27% in its Free cash flow which totaled at $82.9 million in the March quarter. For the nine months ended 31 March 2019, the revenue grew by 13% to $667.8 million and its free cash flow grew by 23% to $227.9 million.
Despite significant declines in new residential listing volumes and new project commencements, the company has been able to deliver growth in FY 2019. During the March quarter, national listings decreased by 9% but despite of that, the company was able to deliver growth in Australian residential revenue, reflecting the price changes that took effect from 1 July 2018, improved product mix and depth penetration, and stronger contribution from products such as Audience Maximiser.
Along with listing, the volume of new project commencements also witnessed a decline but despite that, the commercial and Developer businesses achieved solid revenue growth, driven by an increase in project profile duration, higher developer display advertising and an increase in commercial depth penetration.
Media, data and other revenue continued to grow due to the inclusion of the Hometrack business, offset by reduced advertising revenue in key segments and lower available inventory as Premier listings increased.
Due to the tight lending conditions and uncertainty in the property market, Financial Services revenue was lower than the prior comparative period. The company is expecting the decline in mortgage settlements to continue for the remainder of FY19 and into the first quarter of FY20.
As per the company’s outlook, it is expected that the listing numbers will be impacted by consecutive long weekends over Easter and Anzac Day, as well as the Federal election campaign. Due to these factors, the company is expecting to have a lower rate of revenue growth in Q4 FY19 than Q3 FY19, while expense growth will also be lower than Q3. However, the rate of revenue growth is still expected to exceed the rate of cost growth for the full year.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $81.610, up by 0.579% during the day’s trade with a market capitalisation of ~$10.69 billion as on 10 May 2019 (AEST 12:48 PM). The counter opened the day at $80.500 and reached the day’s high of $82.500 and touched a day’s low of $79.710 with a daily volume of ~ 145,535. The stock has provided a year till date return of 9.26% & also posted returns of 0.80%, 11.62% & 8.30% over the past six months, three & one-month period respectively. It had a 52-week high price of $94.120 and touched 52 weeks low of $69.230, with an average volume of ~ 279,762.
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