By Stuart Condie


SYDNEY--REA Group cut its dividend after higher interest rates and stalling property values contributed to a 7.5% drop in the Australian real-estate advertiser's annual profit.

The ASX-listed firm on Friday reported a net profit for the 12 months through June of 356.1 million Australian dollars (US$232.0 million), compared with A$384.8 million a year earlier. Revenue rose by 2%, to A$1.18 billion.

REA cut its final dividend to A$0.83 a share, from A$0.89, for a full-year payout of A$1.58 a share.

The average analyst forecast was for a net profit of A$250.6 million from revenue of A$799.3 million, according to data compiled by FactSet.

Australian listings were down 12% on-year as higher borrowing costs kept many potential buyers on the sidelines. REA said that volumes were down 5% in the first month of fiscal 2024, but noted that first-quarter volumes will reflect a strong prior period before a more favorable comparison emerges in the December quarter.

"Despite the significantly lower listings in FY 2023, REA Group's result demonstrates the strength and resilience of our business as customers continued to prioritize our premium products, leading platforms and superior audience," Chief Executive Owen Wilson said.

Data by property analytics firm CoreLogic showed the average Australian residential property value fell by 7.9% over the 12 months through February, having surged by 22% across 2021.

Yet tight supply subsequently helped Australia's average house price rise for five months through July and analysts broadly agree that REA's revenue and profit will rally in fiscal 2024.

REA said it expects double-digit growth in fiscal 2024 residential buy yield, and for revenue growth to outstrip growth in operating costs. It forecast operating costs in Australia and India to grow by a percentage in the high-single or low-double digits.

Revenue from India rose 46% on-year to A$79 million.

REA is 61% owned by News Corp., the owner of Dow Jones & Co., publisher of this newswire and The Wall Street Journal.


Write to Stuart Condie at stuart.condie@wsj.com


(END) Dow Jones Newswires

08-10-23 1849ET