The REA Group share price has dipped today after the company announced uncertain business conditions in 2021 due to the COVID-19 pandemic.
The post Why REA Group (ASX:REA) share price is trading lower after AGM appeared first on Motley Fool Australia. –
The REA Group Limited (ASX: REA) has dipped 1.31% to $138.34 today after reporting a drop in first quarter revenue, and an uncertain guidance for the rest of 2021. This was announced during the company’s annual general meeting (AGM) this afternoon.
A look at the books for FY20
- Revenue of $820.3m, down 6%
- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $492.1m, down 5%
- Net profit of $268.9m, down 9%.
- Earnings per share (EPS) were 204.1 cents, near record highs.
- The board has decided to declare a total dividend of 110 cents.
The property group also advised that its Asian business contributed $47.9 million of revenue and EBITDA of $8.9m, while North American operations’ revenue fell 2% to USD$473 million due to the impact of COVID-19 in the fourth quarter.
Other AGM highlights and first quarter FY21 results
Pinpointing data as its most valuable asset, REA Group said its goal was to become Australia’s property data authority. It has cemented its number one position through realestate.com.au as Australia’s premier property site, with a record 46.2 million app launches in June alone, and topping more than 10 million downloads.
The company also reported its first quarter result showed $196 million of revenue, down 3% from the same period last year. EBITDA for Q1 is $124 million, which is an 8% increase. REA said that the full-year outlook for FY21 remained uncertain with ongoing volatility expected as a result of the pandemic.
A brief look into REA
REA Group operates the realestate.com.au property listing website, amongst others. It has a significant lead over its main competitor, domain.com.au, which is owned by Nine Entertainment Co Holdings Ltd (ASX: NEC). Revenue from realestate.com.au is three times larger than Domain.
The group has also made some strategic investments such as Flatmates.com, which allows the company to tap into a younger audience. Information gathered by REA is used to offer cross-services such as utility connection and mortgage broking.
The company also has interests in international businesses, including a 20% holding in move.com, the second-largest real estate website in the United States, as well as a portfolio of Asian businesses. However, its main revenue generator continues to be in Australia.
REA share price performance
The REA share price has surged up more than 30% in 2020. Its share price briefly dived to a year-low of $64 at the height of the pandemic in March, before making its upward march to today’s level of $138.34. REA commands a market cap of around $18.5 billion.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.