Domain Holdings Australia Limited (ASX: DHG) has announced their FY 2019 results this morning, reporting a 29.3% decrease in net profit after tax (NPAT) to $37.4m. As earning fall with a decrease in residential sales as the housing market continues to slow during FY 2019, the Company expects this to continue into FY 2020 as new listings remain low declining nationally 20% in July 2019.
The share price has fallen 2.44% in response to a price of $2.80, Domain has also announced they plan to distribute a final dividend of 4 cents per share taking the FY 2019 total to 6 cent per share despite the fall in profit.
Domain is a real estate media company that offers multiple property-based solutions, established initially by Fairfax, DHG listed independently in 2017. Domain specialise in marketing, commercial development and property market research intended to attract consumers to their listings. Domain’s property app was rated as Australia’s best reaching 5.6m customers. Despite these strengths the Company has struggled to increase its profits, as its media development investments fail to produce returns.
Domain has reported declines in revenue and earnings for FY 2019, revenue has fallen 6.1% to $335.6m whilst EBITDA is down a further 15.3% to $98m. This fall is mostly attributed to challenges with Domains new media development that offers programmatic advertising, delivering lower returns however also reducing margins. As well as a market shift to smaller boutique developments that are less reliant on Domain’s advertisement products. Domain has also reported a 29.6% decline in print revenue that continues to make up 16% of total revenue, this is due to the continued movement towards online advertising and the weak residential property market. The Company also reported a $178.8m non-cash impairment.
Domains residential advertisement sector that makes up 52% of its revenue base had a minor increase of 0.5%. The Company expanded its online residential sales platform increasing views per listing by 26%, DHG have also generated a platinum product that ensures statistically increased sales opportunity. However, due to the decline in the property market these gains have failed to materialise significant additional revenue for Domain.
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