REA Group Ltd Annual Report 2021

REA Group Ltd | Annual Report 2021 16 STRONG RECOVERY In Australia, REA Group operates the leading residential and commercial sites, realestate.com.au 2 0 and realcommercial.com.au , 21 as well as the leading website dedicated to share property, Flatmates .com.au . 22 Australian highlights Residential property market bounces back Revenue increased 13% to $870 million, driven largely by increases in the Residential, Developer and Data businesses. After a challenging Q1 FY21, impacted by Melbourne COVID lockdowns, the Australian residential property market recovered strongly for the remainder of the year. Australian Residential revenue increased by 18%, reflecting higher national listings, improved depth and Premiere penetration, increased subscription revenues and continued growth in add-on products. Revenue from our Commercial and Developer businesses increased 5% with Developer benefiting from a 17% increase in new project commencements, driven in part by government stimulus, an increase in project profile duration and higher subscriptions. This was partially offset by a decline in Commercial revenues due to the negative impact of COVID on listing volumes. Collectively media, data and other revenues were broadly flat YoY, with growth in Data and Media revenues offset by a reduction in other revenues. Financial Services operating revenue increased 9% driven by higher settlements, increased broker recruitment and improved productivity. This was more than offset by a reduction in partnership revenue as the current NAB agreement performance payments reached maturity in September 2020. In March 2021, REA Group announced its proposal to acquire 100% of the shares in Mortgage Choice Limited, providing a compelling opportunity to establish a leading mortgage broking business with increased scale. The acquisition aligns with REA’s financial services strategy and complements our existing Smartline broker footprint, resulting in greater national broker coverage. The transaction completed on 1 July 2021. Consideration was $244 million, funded by an increase in REA’s debt facilities. On 15 June 2021 the Group acquired a 34% interest in Simpology, further accelerating REA Group’s financial services strategy. Simpology is a leading provider of mortgage application and e-lodgement solutions for the broking and lending industries. 20 Nielsen Digital Media Ratings (Monthly Tagged), Jan 21 – Jun 21 (average), P2+, Digital (C/M), text, Real Estate/Apartments subcategory, Unique Audience. 21 Nielsen Digital Media Ratings (Monthly Tagged), Jan 21 – Jun 21 (average), P2+, Digital (C/M), text, realcommercial.com.au vs commercialrealestate.com.au, Unique Audience. 22 Similarweb, visits to flatmates.com.au vs flatmatefinders.com.au, Jul 20 – Jun 21. Year in review