Domain Holdings Australia Limited (ASX: DHG) has been among the worst performers on ASX today as its stock price fell heavily on the news of 1% fall in FY19 revenue year-to-date.
Trading update provided by property portal operator Domain Holdings Australia disappointed investors to such extent that DHG crashed 13.438% to land up at $2.770 on todayâs close.
Early this morning Domain Holdings revealed 1% plunge in its total revenue since the start of fiscal year 2019 on the back of lower auction volumes and new listings in Sydney and Melbourne housing markets.Â [optin-monster-shortcode id="wxhmli4jjedneglg1trq"]
But what bottlenecks the performance of Australiaâs leading property website owner?
Itâs the consistently booming slump in Australian Housing market driven by tightened lending rules.
Domain Holdings Australia offers real estate technology and media service through its own property classified website Domain.com.au. But, due to the housing downturn in Australia specifically affecting property markets in Sydney and Melbourne, Domainâs new listings and auction volumes has significantly gone down.
The company informed that its print and digital revenue has been drastically impacted due to 8% fall in Sydneyâs new listing and 22% decline in its auction volume for the September quarter. Meanwhile, Melbourne performance added to the financial struggle of the company as new listings fell by 1% and auction volumes slipped by 18% in Melbourne market in second quarter of FY19.
Although the company has posted 6% higher digital revenue year-to-date for FY19, its developer revenues have been adversely affected due to lesser number of new development projects specifically in New South Wales. Domainâs pro forma total Costs are approximately 7% higher in Fiscal year 2019 up till today.
Australiaâs leading newspaper publisher Fairfax Media Limited spun off Domain Holdings almost a year back, retaining a stake. Ahead of Fairfax and Nine Media merger announced in July this year, Fairfax Media and Nine entertainment shares tumbled when Fairfax flagged 5% drop in its revenue for the financial year-to-date on Friday.
Fairfax Media Limited (ASX: FXJ) share price nosedived 13.548% to $0.670, whereas stock of Nine Entertainment co. Holding Limited (ASX: NEC) fell by 12.381% to close at $1.840 on 12 October 2018.
However, the merger of these print and television media group is due to be completed by the end of this calendar year.
In the closing statement Domain Holdings told that cost initiatives are underway to eye an improved cost performance in coming period. For FY19, Domain expects a low- single digit increase in its pro forma underlying Costs excluding investment, whereas total costs have been anticipated to increase mid-to-high-single digits.
Domain Holdingsâ Annual General Meeting is scheduled to be held on 20 November 2018.
Ahead of releasing disappointing trading update for financial year-to-date, the share price of Domain Holdings has plunged by 13.438% to last close at $2.770 on 12 October 2018. Moreover, DHG stock has seen a performance change of -7.78% year-to-date.
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