ASX 200 falls 0.6%, REA Group reports

S&P/ASX 200 Index (ASX:XJO) drops 0.6%, REA Group Limited (ASX:REA) reports its FY20 result to investors.

The S&P/ASX 200 Index (ASX: XJO) went down 0.6% to 6,005 points.

The federal government announced today that jobkeeper would be extended to a wider group of businesses which may have just started getting into financial trouble. It will largely support Victorian businesses which are now facing difficulties due to the heavier lockdowns.

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REA Group Limited (ASX: REA) reports its FY20 result

REA Group announced its FY20 result today. Revenue went down 6% to $820.3 million. The revenue decline was less than the listing declines – during FY20 national listings were down 12% with Sydney listings down 6% and Melbourne listings down 8%.

Listings rebounded strongly in July 2020 for the ASX 200 share, which is now into FY21. July national listings were up 16% with Sydney listings up 47% and Melbourne listings up 13%.

Core earnings before interest, tax, depreciation and amortisation (EBITDA) was down 5% to $492.1 million and net profit after tax (NPAT) dropped 9% to $268.9 million. Earnings per share (EPS) was also down 9% to $2.04.

During FY20 the company saw Australian residential decline by 4%, with lower national listing volumes partially by price changes that took effect from 1 July 2019. Commercial and developer revenue declined 7% with new project commencements down 27%.

Media data and other revenue declined by 19% primarily due to lower developer display advertising in line with new project commencement volumes. Financial services operating revenue increased due to higher settlements and improved broker productivity.

REA Group announced a full year dividend $1.10 per share, a 7% cut.

REA Group CEO Owen Wilson said: "The property market has shown great resilience, bouncing back from the lows of COVID-19, however, the extent of this recovery is still dependent on the efforts to contain the virus and the outlook for the underlying economy. We have a strong balance sheet, a talented workforce and a loyal audience which will see us emerge an even stronger business once more normal conditions return."

The REA Group share price rose 1.9% today.

Insurance Australia Group Ltd (ASX: IAG)

The ASX 200 insurance giant announced its FY20 result today.

IAG's gross written premium (GWP) rose by 1.1% to $12 billion. Insurance profit dropped 39.5% to $741 million. The underlying insurance margin dropped 60 basis points to 16% and the reported insurance margin decreased 680 basis points to 10.1%.

The net profit after tax (NPAT) dropped 59.6% to $435 million.

The reported margin fell below the guided range of 12.5% to 14.5% due to the higher than expected level of natural peril events, a strengthening of reserves (mainly relating in the liability), professional risks and workers' compensation areas, and credit spread effects. COVID-19 impacts on the underwriting profit largely offset each other.

The underlying margin declined because of higher reinsurance costs, the lower interest rates are continuing to impact investment income, and there was a poorer performance from the commercial long tail classes in Australia.

IAG didn't declare a final dividend. The total year dividend was 10 cents per share, amounting to a 68.8% reduction.

The IAG share price dropped 0.8% today.

News Corp (ASX: NWS)

The ASX 200 news business reported its FY20 result when it released its fourth quarter numbers.

Revenue dropped 22% to $1.92 billion due to the negative impacts of COVID-19 and the sale of News America Marketing.

The company saw a net loss of $401 million which included impairment charges of $292 million and higher restructuring costs due to COVID-19 compared to a $42 million loss in the previous year.

However, one highlight was the Dow Jones segment which achieved record average subscriptions of 3.8 million to its consumer products, with 28% growth in digital-only subscriptions, including 23% growth of its digital-only subscriptions at The Wall Street Journal. Dow Jones segment EBITDA rose by 13% in the fourth quarter.

The News Corp share price went up 5.7% today, it was one of the day's top ASX 200 performers. 

Motley Fool contributor Tristan Harrison 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.

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