The Domain Holdings Australia Ltd (ASX: DHG) share price has dropped as much as 6.86% lower this morning after the property solutions company released its half-year results.
At the time of writing, Domain shares are trading at an intra-day low of $3.53 apiece.
What did Domain announce?
This morning, Domain reported disappointing first-half results with declines across many of its key metrics due to challenging market conditions.
Revenue for the first half came in at $147 million, representing a decline of 10.9% on the prior corresponding period (pcp). However, Domain noted that this result does reflect a like-for-like reduction of only 8%, which was partially offset by efforts that the online property provider made to simplify and optimise its business.
Earnings before interest and tax (EBIT) fell by 33.4% to $25 million; while earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 8.9% to $47 million. At December 2019, the company was in a net debt position of $147.9 million.
A dividend of 2 cents per share, fully franked, was declared and will be paid on 13 March 2020.
Domain noted a 7% growth in residential yield for its listings, while organic traffic grew 18% and cost per enquiry was reduced by 19%.
Segment revenue results
In terms of segment results, commercial revenues saw underlying growth of 22% during the period. Meanwhile, revenue growth in consumer solutions came in at 72% as Domain commented that this segment continues to scale well.
However, Media, Developers & Commercial revenues declined by 6% in the current half. Domain attributed this fall to the challenging market environment that currently stands for Media and Developers. This was partially offset by continued strong performance from its Commercial division.
The lower revenues in Domain's Media business, in particular, reflected the adoption of a new programmatic offering that the online retail provider has put in place.
Additionally, Domain views the broader digital advertising market in Australia to currently be subdued, particularly in the first quarter. However, the business has seen an improved margin performance as clients have migrated to the new model.
Outlook and guidance for the remainder of FY20
Domain commented that activities so far in January 2020 reflected a relatively soft start to the 2020 year and further noted that January is typically a seasonally small month for listings.
However, pleasingly for shareholders, the company has observed early signs of improving property market activity for its business since the Australia Day weekend.
Domain further commented that it believes the necessary work it has done on simplifying and optimising its business should have a positive impact going forward. This work should put the company in a strong position to benefit from a recovery in property activity which it expects for the remainder of the financial year.
