- Revenue: $391.1 million, up 13%
- Expenses: $254.1 million, up 7%
- EBITDA: $137.1 million, up 26%
- EBIT: $92.7 million, up 32%
- Net Profit: $49.4 million
- Earnings Per Share (EPS): $0.078 for continuing businesses
- Adjusted Net Profit: $56.4 million, up 24%
- Adjusted EPS: $0.089, up 24%
- Dividend: Fully franked dividend of $0.04, full year dividend of $0.06
- Residential Revenue: Increased 19%
- Media, Developers, and Commercial Revenue: Increased 8%
- Agent Solutions Revenue: Declined 6%
- Domain Insight Revenue: Increased 8%
- Digital Revenue Growth: 14%
- EBITDA Growth: 27%
- Print Revenue: Increased 1%
- Group EBITDA Margins: Expanded to 35%
- Core Digital Margins: Increased to 45.8%
- Average Revenue Per Listing: Increased 18% year on year
- Net Debt: $150.8 million, down from $185.8 million
- Leverage Ratio: Improved to 1.10 times from 1.71 times
- Cash Balance: $33.8 million
Release Date: August 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Domain Holdings Australia Ltd (ASX:DHG, Financial) reported a 13% increase in revenue to $391.1 million.
- EBITDA grew by 26% to $137.1 million, and EBIT increased by 32% to $92.7 million.
- Net profit attributable to members rose by 24% to $56.4 million, with earnings per share also up 24%.
- The company declared a fully franked dividend of $0.04, maintaining a full-year dividend of $0.06.
- Domain achieved a significant 10% year-on-year growth in unique audience, driven by product innovation and increased value to buyers.
Negative Points
- Expenses increased by 7% to $254.1 million, impacting overall profitability.
- Agent solutions revenue declined by 6%, primarily due to lower gross revenues from Realbase's AIM products.
- The developer's business faced ongoing challenges, with revenue declining year-on-year due to high construction and funding costs.
- Print EBITDA was lower despite a 1% increase in print revenue, reflecting higher costs.
- The company expects FY25 costs to increase in the high single to low double-digit percentage range, potentially impacting margins.
Q & A Highlights
Q: Just on the implied revenue outlook for FY25, it's probably a little bit better than I expected. Is there anything else lumpy in there?
A: The expectations of revenue are underpinned by an 8% price increase and strong take-up of depth products, particularly Audience Boost. The WA IDS contract will contribute slightly lower in FY25 as we move from implementation to ongoing deployment. (Jason Pellegrino, CEO)
Q: On commercial and developer, are there any pricing tailwinds we should think about into '25?
A: We will have a price increase in commercial and developers. The developer market remains challenging due to high construction and funding costs, but we expect stabilization and potential improvement with government support. (Jason Pellegrino, CEO)
Q: Can you talk about what's driving the volatility in the listings coverage number?
A: The volatility is due to differences in business days, public holidays, and other factors. The overall trend is positive, with listings coverage recovering and exceeding pre-price increase levels. (Jason Pellegrino, CEO)
Q: Should we be thinking controllable levers stronger than your sort of 12% or potentially even stronger than 15% that you delivered last year?
A: We are confident about next year with an 8% price rise and strong uptake of premium products like Platinum Edge and Audience Boost. We aim for double-digit growth in average revenue per listing. (Jason Pellegrino, CEO)
Q: Can you clarify how much geo mix benefited your FY24 resi growth and with a view you'll be seeing some of that unwind in FY25?
A: Geo mix was a high single-digit tailwind in FY24, expected to moderate in FY25. The market is normalizing, with Sydney and Melbourne performing well and Queensland showing improvement. (Jason Pellegrino, CEO)
Q: Are there any costs that might have been deferred into '25 driving part of that growth?
A: No costs were deferred into FY25. We demonstrated discipline in FY24, particularly around contractor and consulting costs, but there was no deferral. (Peter Williams, CFO)
Q: Can you give us a feel for the difference between paid listings and any free listings that you're providing versus total?
A: The 3% growth in total listings includes both subscription (free) and paid listings. The majority of the listings drop-off earlier in the year were free listings, which have since recovered. (Jason Pellegrino, CEO)
Q: How will you drive customers up through the depth tiers using Audience Boost?
A: As you move up the depth tiers, you get a larger quality product driving more views. Platinum Edge, for example, has access to the broadest range of platforms and delivers significantly more views. (Jason Pellegrino, CEO)
Q: How much of the stable margin guidance for FY25 is due to the variable cost from Audience Boost?
A: The stable margin guidance reflects investment in foundational areas, Audience Boost, and disciplined cost management. Audience Boost is a significant part of our investment for next year. (Peter Williams, CFO)
Q: Should we expect Realbase revenue to be stronger in FY25 given Audience Boost is using the AIM technology?
A: The majority of Audience Boost revenue will be recognized in our core listings business, driving incremental growth. There will still be a line in our agent solutions business for traditional products. (Jason Pellegrino, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
