REA Group’s 26% Profit Rise Highlights Growth but Faces Market Challenges Ahead
REA Group Ltd has delivered a robust half-year performance, reporting a 20% increase in revenue to $872.9 million and a 26% rise in net profit after tax to $313.9 million, driven by strong growth in both Australian and Indian markets.
- Revenue up 20% to $872.9 million in H1 2024
- Net profit after tax rises 26% to $313.9 million
- Interim dividend increased by 26% to 110 cents per share
- Strong growth in Australian property advertising and Indian operations
- Divestment of PropertyGuru stake yields $150.6 million gain
Strong Financial Momentum
REA Group Ltd has reported a compelling half-year financial performance for the six months ended 31 December 2024, underscoring its dominant position in the online property services sector. The company posted a 20% increase in revenue, reaching $872.9 million, alongside a 26% surge in net profit after tax to $313.9 million. This growth reflects the Group’s successful execution of its core strategies across its Australian and Indian markets.
The interim dividend was also raised by 26% to 110 cents per share, signaling confidence in sustained profitability and cash flow generation. This dividend is fully franked, maintaining REA’s commitment to delivering shareholder value.
Regional Performance Highlights
In Australia, the Group’s flagship platform, realestate.com.au, continues to lead with an average of 130.7 million monthly visits, quadrupling the traffic of its nearest competitor. Australian property and online advertising revenue grew 19% to $767.7 million, driven by yield improvements and increased national listings. Residential revenue alone rose 21%, supported by price increases and deeper market penetration of premium advertising products.
REA India delivered an impressive 46% revenue increase to $64.2 million, propelled by strong growth in adjacent services on its Housing Edge platform and increased app engagement. Despite a decline in PropTiger revenues due to market conditions, the overall Indian segment remains a key growth driver for the Group.
Strategic Moves and Investments
During the period, REA Group completed the divestment of its 17.2% stake in PropertyGuru, generating a net gain of $150.6 million. This transaction has strengthened the Group’s balance sheet, enabling the repayment of all external debt and leaving a robust cash position of $338.2 million at half-year end.
The Group also expanded its fintech footprint by acquiring a 19.9% interest in Athena Financial Pty Ltd, a fast-growing digital non-bank lender, for $60 million. This aligns with REA’s strategy to integrate property search and home financing into a seamless consumer experience.
Outlook and Strategic Focus
REA Group’s growth strategy remains focused on leveraging its unparalleled audience reach and data insights to enhance customer value and consumer experience. The company aims to continue innovating its property advertising solutions, deepen its financial services offerings, and build next-generation marketplaces in Australia and India.
With a strong operating cash flow and a healthy balance sheet, the Group is well-positioned to navigate competitive pressures and evolving market dynamics. The Board’s decision to increase the interim dividend reflects confidence in the sustainability of earnings and cash generation.
Bottom Line?
REA Group’s strong half-year results set a confident tone for FY25, but sustaining growth amid market shifts will be key to watch.
Questions in the middle?
- How will REA Group sustain growth in India amid competitive pressures and market fluctuations?
- What impact will the integration of Athena Financial have on REA’s financial services segment long term?
- How might evolving consumer behaviors and technology trends reshape REA’s property advertising model?
