In the AGM held this morning on 20 November 2018, Domain Holdings Australia Limited (ASX: DHG) shares an overview of its world-class product and services ecosystem, the information about its strong fundamental which forms the foundation of Domain’s growth, FY2018 financial performance, its 5 key revenue categories, their confidence in domain opportunity. In the AGM, the chairman shares about the world-class product and services they offer making it a leader in national residential listings search platform. They also advertise through domain media which is its online advertising platform. At Domain, there are around 6.1 million digital audiences, 2.1 million print audience, 1.6 million social audiences, 117 million editorial content, 12000 residential agents, 3500 CRM subscribers, 3000 commercial real estate agent, 4.5 million data subscribers, and around 850 employees.
The company possesses a strong fundamental which forms the foundation of its growth. Through digital media, the revenue has gone up by 20%. There was an increase in the number of downloads of its highly-engaging property app by 17%. The residential mobile inquiries increased by 21%. There was an increase in the penetration of agents and listings by 24% which drives the depth revenue for the company. Also, the transaction revenue has also increased by 75%.
This financial year 2018, Domain delivered a strong fundamental performance. Its pro-forma revenue was reported as $357.3 million, Its pro-forma EBITDA was $115.7 million, pro-forma net profit after tax was $52.9 million, pro-forma earnings per share was 9.2 cents, total dividend per share is 8 cents and the net debt to EBITDA ratio is 1.1x.
There are 5 key factors which influence the growth of the Domain. These are residential, media, developers and commercial, agent services, transactions, and other services and print. Through residential, the revenue as a percentage of the total comes to be 48%. There was an increase in revenue through this category by 19.9% which was driven by a modest decline in the listing volumes, the yield increased, there was growth in depth revenue by 24%. Through media, developers and commercial there was an increase in the revenue by 11.2%. It covers around 15% of the total revenue generated. The impact in the results was due to strong commercial revenue growth, developer growth which is the indicator of gain in the market share in the softer market as well as the challenging digital display advertising market. Another key factor is the agent services which generates 8% of the total revenue.
The results in this category get influenced by subscribers and yield as well as the integration of agent service offerings. Transactions and other services are yet another source of revenue generation parameter which generates 7% of the total revenues. The results under this category get influenced through strong compare and connect, early revenue from its Loan finder and launch of domain insure. This has increased by 74.5% as compared to the previous year. Last but not least, the print is another category which influences the revenue. It covers 22% of the total revenue generated. This has gone down by 12.6% as compared to the FY17. The decline in the result was due to the structural decline in revenue and the cost initiatives which were implemented in order to support stable EBITDA.
The CEO of Domain shows confidence in the upcoming opportunity of Domain. It is capable of delivering strong growth in platinum depth. Also, he highlighted that Domain has the potential to deliver consumer value at all stages of property search, ownership and sales experience. The current market price of the share is A$2.450 (AEST: 2:11 pm) which has gone down by 0.407% and has the market capitalization of $1.43 billion.
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