REA Group Ltd Annual Report 2021

Annual Report 2021 | REA Group Ltd Operating and financial review Reconciliation of results from core operations A summary of financial results from core operations for the year ended 30 June 2021 is set out below. For the purposes of this report, core operations are defined as the reported results set out in the financial statements adjusted for significant non-recurring items such as 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. A reconciliation of results from core operations and non-IFRS (International Financial Reporting Standards) measures compared with the reported results in the financial statements on page 62 is set out below. The following non-IFRS measures have not been audited but have been extracted from the audited financial statements. Core and reported results 2021 $’000 2020 $’000 Growth Reported operating income 927,811 820,269 13% EBITDA from core operations (excluding share of gains and losses of associates and joint ventures)* 555,620 492,073 13% Share of gains/(losses) of associates and joint ventures 12,618 (15,411) >100% Gain on associate disposals and transaction costs (3,480) (1,059) >(100%) EBITDA from core operations* 564,758 475,603 19% Restructure costs (926) (8,159) 89% Net gain/(loss) on acquisitions and disposals and transaction costs (1,023) (1,000) 2% Integration costs (3,923) – n/a Impairment charges – (148,569) n/a Revaluation of contingent consideration – 1 n/a Historic tax provision (3,245) – n/a Reported EBITDA* 555,641 317,876 75% Net profit from core operations 318,024 268,865 18% Restructure costs, net of tax (648) (5,711) 89% Net gain/(loss) on acquisitions and disposals and transaction costs, net of tax 1,665 (2,001) >100% Integration costs, net of tax (3,786) – n/a Impairment charges – (148,569) n/a Unwind, revaluation and finance costs of contingent consideration – 1 n/a Historic tax provision, net of tax (2,272) – n/a Reported net profit 312,983 112,585 >100% * The Directors believe the additional information to IFRS measures included in the report is relevant and useful in measuring the financial performance of the Group. Group results from core operations Group operating income from core operations increased 13% to $927.8 million. This includes the consolidation of the Elara business from 1 January 2021. Excluding the impact of acquisitions, revenue increased by 11% for the year. The Group delivered an exceptional result, successfully navigating the pandemic while also accelerating its growth strategy through pivotal investments. In Australia, the residential property market recovered strongly after a challenging first quarter, impacted by COVID-19 lockdowns in Melbourne. Positive buying conditions resulting from fiscal and monetary policy settings have helped fuel housing demand with national residential listings increasing 15%, Melbourne listings up 11% and Sydney listings up 25%. The increase in listings, combined with improved depth and Premiere penetration, increased subscription revenues and continued growth in add-on products resulted in an increase in Australian residential revenue of 18%. Year in review Directors’ Report Financial Statements Remuneration Report Sustainability Our Leaders 31