REA Group Ltd Annual Report 2021

REA Group Ltd | Annual Report 2021 22 KEY MARKETS REA’s footprint spans three continents providing exposure to some of the fastest growing global markets experiencing rapid digitisation. Global footprint Asia financial performance REA Group continued to leverage its unique capabilities across its Asian businesses comprising iProperty .com.my in Malaysia, squarefoot.com.hk and SmartExpo.com in Hong Kong, ThinkOfLiving.com in Thailand and myfun.com in China. Asia revenue 51 declined by 16% in FY21 after being negatively impacted by significant extended COVID lockdowns, cancellation of events across all markets and a one-off COVID related reduction in syndicated MyFun listings in the first half of FY21. EBITDA before associates and joint ventures 52 was $10 million, with revenue declines partially offset by continued cost management across the region. Creating the most compelling proptech group in Southeast Asia On 31 May 2021, REA entered into a binding agreement to transfer ownership of its Malaysia and Thailand entities to PropertyGuru, in exchange for an initial 18% equity interest in PropertyGuru. This strategic shareholding will provide REA with exposure in a larger, more diversified Southeast Asian company. The transaction completed on 3 August 2021, following REA’s divestment of its 27% interest in 99 Group on 30 July 2021. Southeast Asia is one of the fastest growing regions globally, predicted to become the fourth largest economy by 2030 in terms of combined GDP. COVID has brought a permanent and massive spike in digital adoption across the region’s real estate sector, presenting significant future opportunities. The transaction creates new opportunities and access to a deeper pool of expertise, technology and investment to provide enhanced digital solutions to meet the needs of home seekers, property agents and developers. The enlarged PropertyGuru business is uniquely positioned to accelerate the next wave of proptech innovation across Southeast Asia. 51 Prior year number includes contribution from Singapore and Indonesia. 52 Financial results from core operations are defined as reported results adjusted for significant non-recurring items such as restructure costs, gain/loss on acquisitions and disposals, related transaction costs, integration costs and historic tax provision (historic indirect tax provision reflects potential retrospective changes to interpretation of tax law). In the prior year, this included items such as restructure costs, revaluation of contingent consideration, gain/loss on acquisitions, disposals and divestments, and impairment charges. 53 The Group held a 59.65% shareholding on acquisition and subsequently increased its holding to 60.65% as at 30 Jun 21. Shareholding increased to 65.49% in Jul 21. REA takes controlling position in Elara On 17 December 2020, REA moved to a controlling position in Elara, holding a 60.7% shareholding as at 30 June 2021 53 with News Corp holding 39.0%. Elara delivered local currency revenue growth of 23% in FY21, despite the Indian market being heavily impacted by COVID. Digital adoption of real estate has accelerated and new consumer segments are migrating online Year in review