Domain Holdings Australia Ltd

Second Half 2018 trading conditions & Appointment of Key Personnel:Domain Holdings Australia Ltd.’s (ASX: DHG) stock has risen 1.92% in three months as on August 01, 2018. The company has appointed Jason Pellegrino as the Managing Director and Chief Executive Officer (CEO), effective from 27 August 2018. Moreover, in the first seventeen weeks of H2 FY18, DHG experienced pro forma digital revenue growth of 21% and total revenue growth of 13%. For FY18, DHG’s costs are expected to increase in the range of 12% to 13% from FY17’s pro forma costs of $216 million. Meanwhile, as per Proforma results in 1H 2018, DHG had delivered 12.5% rise in the revenue to $183.3 million, however the net profit after tax fell by 8.1% to $24.7 million. Therefore, we give an “Expensive” recommendation on the stock at the current price of $ 3.280 while this tech sector stock is a key to watch in view of group’s full year result due on August 13, 2018.
 

REA Group Ltd

Acquisition of Hometrack Australia:REA Group Ltd (ASX: REA), engaged in a multinational digital advertising business specialising in property, saw its stock rising 7.58% in three months as on August 01, 2018. ACCC had approved the acquisition by realestate.com.au Pty Ltd of Hometrack Australia Pty Ltd, which is among the leading providers of property data services. The purchase consideration of the acquisition is $130m, which will be funded from existing cash reserves and debt of $70m. On the other hand, REA for the third quarter 2018 reported 19% growth in the revenue & EBITDA. In the first nine months of 2018, the revenue grew by 20% to $592m and EBITDA growth from core operations was 21% to $345m. The growth is driven by the strong performance of the company’s residential and commercial businesses and the inclusion of the financial services business, which was not included in the prior comparative period. The growth achieved during the third quarter is good though the listing volumes in Australia were lower due to the timing of Easter and project launches continuing to be lower than the prior corresponding period. This had resulted in modest growth in the company’s business. Moreover, financial services segment, that was launched in the first half, reaffirmed the FY 18 guidance and expects to deliver the revenue in the range between $26m - $30m and EBITDA between $7m - $11m. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 84.510 while the full year results are due on August 10, 2018 and the group’s performance would be subject to housing cycle to some extent.
  

Third Quarter 2018 Financial Performance (Source: Company Reports)

 
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