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Company Information

Company at a Glance

Industry:
Media
Fiscal Year-End:
Jun 10

Company Overview

Based in Melbourne, REA and its subsidiary companies, known as the REA Group, make up a global online real estate advertising group, with 21 websites. REA operates several commercial or residential property websites across Australia, the UK, Italy and NZ. REA’s businesses also include real estate office-management tools, website design services, mortgage broking and real estate print publishing. REA’s Australian websites include realestate.com.au, realcommercial.com.au and propertylook.com.au.

Company History

REA was established in 1995 and listed on the ASX in December 1999.

Industries Of Operation

REA operates in and dominates the online real estate ad market. The Australian online advertising market generates around $490M annually; and continues to grow strongly, outpacing other media. Barriers to entry are relatively high due to the hitherto duopoly structure. However this is constantly being challenged by new competitors, albeit unsuccessfully. REA's key market positioning metrics are: no. of subscribers (6,540); no. of ads (350K+); and unique visitors (1.9M).

Differentiating Factor

Vis-a-vis the broader advertising market REA’s offering affords it some level of protection in a market downturn due to its more cost-effective value proposition. REA’s dominant position in online real estate advertising (75%-80% of Australian real estate agencies advertise with REA) gives it a competitive edge in terms of scale and ability to command premium rates. REA also provides internet solutions, such as web design, development and hosting for individual real estate offices or franchises.

Major Customers & Competitors

REA's customers are those who use and search the site but it is the agents who list their properties that generate the company's revenue.
REA competes directly with other online real estate sites such as domain.com.au and propertylook.com.au. Traditional real estate agents such as McGrath Realestate are also establishing online sites, further intensifying competition.

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Market Statistics

Market Cap ($M):
1,310.1
Equiv. Shares (M):
127.3
% All Ords:
0.10
12Mth Range ($):
3.00 - 12.60
Turnover ($M pa):
236.7
Index:
n/a
Sector:
Consumer Discretionary
Industry Group:
Media
Industry:
Media
Sub Industry:
Publishing

Last 5 Market Sensitive Announcements

Date
Announcment
01-Jul-10 11:32
Realestate.com.au integrates Adslot`s Publisher Technology
25-Feb-10 14:41
4D December 09 Results and Announcement
20-Aug-09 15:30
REA Group Announces FY09 Results and Payment of Dividend
07-Aug-09 17:56
REA Group and News Int Sell UK Online Business
31-Jul-09 16:38
REA Group signs agreement to sell its stake in UAE business

Calendar Of Events

Date
Event
25-Nov-09
AGM Date for Final Year Result
16-Oct-09
Dividend Date Payable for Final Year Result (10c 100% franked)
25-Sep-09
Dividend Record Date for Final Year Result (10c 100% franked)
21-Sep-09
Dividend Ex-Dividend Date for Final Year Result (10c 100% franked)
20-Aug-09
Reporting Date for Final Year Result

Directors

Name
Position
R Freudenstein
Chairman
A MacLeod
Director
J McGrath
Director
S White
Director
S Rue
Director
R Amos
Non-Executive Director
K Conlon
Independent Non-Executive Director
J Philips
Non-Executive Director

Management

Name
Position
G Kent
CEO
G Chmiel
Acting CEO
G Ellis
Managing Director

Substantial Shareholders

Name
% Holding
News Limited
60.7

Consensus Recommendation Summary


1
1
2
4
4
Sell Under Perf. Hold Out Perf. Buy

Number of Brokers in Recommendation Summary: 12

Consensus Earnings

FY10 FY11
Consensus EPS1 (c) 38.9 49.4
EPS Growth (%)   26.8
P/E Ratio (x) 26.2 20.7
P/E Rel. All Ords (x) 2.34 n/a
P/E Rel. Sector (x) n/a n/a
Number of Brokers in Earnings Survey: 12 12

1. Consensus EPS is generally "reported EPS" but will vary as to whether it is on a pre or post preference earnings basis. This number is not always on the same basis as the Aegis EPS.

Historical Forecast Earnings And Recommendations

Consensus Recommendations

Consensus information provided by Reuters.

Consensus EPS Forecasts 1

1. Consensus EPS is generally "reported EPS" but will vary as to whether it is on a pre or post preference earnings basis. This number is not always on the same basis as the Aegis EPS.

Peer Recommendation Comparison

  P/E (x) EPS Chg (%) Dividend Yield (%) MktCap ($M) Price ($) Consensus Rec
  09A 09A 09A    
News Corporation 3.9 81.2 1.2 13,071.8 16.37 Out Perf.
Fairfax Media 10.3 (48.1) 1.6 3,469.1 1.48 Out Perf.
Consolidated Media Holdings 32.2 (35.0) 5.3 1,926.8 3.10 Out Perf.
Seven Group Holdings 9.5 (26.4) 6.3 1,872.2 6.13 Out Perf.
REA Group >99 (95.8) 1.7 1,310.1 10.20 Out Perf.

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