Australian Investment Blog

ASX:DHG 13/08/2018

Domain (DHG) moves higher after delivering first results

Stock

Domain Holdings (DHG) $3.29 as at 13/08/208

Event

After a choppy open, the real estate listings website Domain is trading higher following their FY18 results announcement. The result was mostly in line for the period, however commentary was more upbeat than the market was expecting. This result was the first full year report since demerging from Fairfax late last year, whilst also the first opportunity for the market to review the company’s progress post the departure of Sam Catalano but come before new CEO Jason Pellegrino commences later this month. Domain Figures

The result did include some large one-off costs that skew the statutory results to a net loss of $6.2m however the market is becoming more bullish on the ability for Domain to deliver in FY19. Key to this is Jason’s expertise in growing a digital business, whilst the merger of Nine Entertainment & Domain’s majority shareholder Fairfax is seen as a positive “through additional marketing and audience reach of the combined business” the company said Domain Holdings (DHG) Chart DHG Chart

Market Matters Take/Outlook

The result shows a successful start to life for Domain as a separate business however we see headwinds going forward. A new CEO, and heading into a housing downturn may see listings come under pressure – the company has already noted a subdued listing environment for the first weeks of FY19 – could see Domain head lower. Although the Nine-Fairfax merger assists the business, we see the merger as unlikely, and the potential upside to Domain limited in the short term.

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