Domain’s full-year loss has blown out to $138 million because of impairments linked to the Australian property market downturn.
The real estate advertiser, which lost $6.2 million last year, said revenue for the year to June 30 rose by almost 20 per cent to $343.3 million but the bottom line was hit by previously announced impairments of $179 million.
Chief executive Jason Pellegrino said it was a solid performance in the context of major listing declines in Melbourne and Sydney.
Stripping out the writedowns, Domain’s underlying profit increased to $37.4 million from $23.5 million.
Mr Pellegrino said the market had shown encouraging signs in the first weeks of FY20, including increased attendance at open for inspections, and increased home loan application volumes.
However, the company said listings volumes remained weak in a seasonally low listings period, with national market new listings declining down 20 per cent in July, and Sydney and Melbourne new listings down 26 per cent and 27 per cent respectively.
“To put this in perspective, property sales as a percentage of Australia’s dwelling stock are at their lowest point in more than 20 years,” Mr Pellegrino said on Friday.
Domain’s News Corp-owned rival REA Group also posted a big drop in full-year profit this month, amid what the realestate.com.au owner called “unprecedented market conditions”.
Domain’s new listings declined around 12 per cent for the year, double the 6.0 per cent decline reported at the first half.
Residential revenue increased 0.5 per cent for the year, but income from media, developers and commercial declined around 13 per cent.
Domain said the softer developer result again reflected weakness in NSW and Victoria.
“Financing constraints and other regulatory issues have shifted market demand from investors to owner-occupiers, and from large high rise developments to smaller boutique projects which require a lower level of marketing support,” the company said.
Domain – of which Nine Entertainment owns a 60 per cent stake – maintained a final dividend of 4.0 cents, but the amount franked rose from 70 per cent to 100 per cent.
Domain’s full-year dividend is 6.0 cents, fully franked, down from a partially franked 8.0 cents.
The company also announced plans to further leverage its relationship with its majority-owner by launching a new Your Domain TV show in September.
Domain has already been integrated into Nine’s reality home renovation program The Block.
Shares in Domain fell by as much as 2.8 per cent in early trade but were 1.05 per cent higher at $2.90 by 1110 AEST.
Shares in the company are still down more than 18 per cent on a year ago, but have climbed by about 40 per cent since February’s historic low of $2.05.
AAP
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