What property slowdown?

REA Group delivers a blow to Fairfax

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

While house price growth might be hard to come by, one part of the market continues to grow strongly – online property advertising. Realestate.com.au owner REA Group (ASX: REA) has today reported a 27% jump in net profit to $87m for the 2012 financial year, on revenues of just $277.6m. The company also increased its cash balance by 32% – and now stands at a whopping $181.6m. Total dividend for the year is 33 cents per share, full franked, and 27% higher than last years.

This result shows the success online lists can have – following on from yesterday's Carsales.com's profit increase of 23% and the power of the so-called 'network effect'. More listings means more people visit the site, which leads to more listings – you get the picture.

The company's offshore real estate sites continue to do well. casa.it, which is Italy's market-leading property site, according to the company, grew revenues by 35% to $22.4 million, while immoRegion.fr, the French site, grew revenues by 23% in the 2012 financial year. Hong Kong appears to be a disappointment with earnings falling 8%.

A continued drive into new markets such as commercial and "media & developer" (which serves the property development and display media market) is also bringing results, with both sectors increasing revenues at a higher rate than residential. These two sectors now represent 40% of total Australian revenues.

The results will no doubt please 62% owner News Corporation (ASX: NWS), and be a blow to Fairfax Media Limited (ASX: FXJ)  owner of domain.com.au, Australia's second largest real estate listing site.

The Foolish bottom line

With a war chest of $181m and the company's stated goal of being the leading digital marketing company for property, globally, one wonders when it might turn its eyes on ASX listed iProperty Group Ltd (ASX: IPP), which runs 18 property websites across Asia, including market leading portals in Indonesia, Malaysia, Hong Kong and Singapore. iProperty Group's market cap is a touch over $170m.

With REA Group's Hong Kong site showing falling revenues, it might be fairly soon.

If you're in the market for some high yielding ASX shares, look no further than our "Secure Your Future with 3 Rock-Solid Dividend Stocks" report. In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »