Domain has “upped stumps” as the naming rights sponsor for the Cricket Australia men’s test series as the property portal seeks to embrace a more targeted marketing approach in the wake of lacklustre half-year results.
The announcement that Domain would withdraw from the naming rights sponsorship comes just half way through a four-year contract and was formalised at a board meeting last Wednesday, according to the Sydney Morning Herald.
Under the arrangement made in 2018, Domain had an option after two years to extend or not for a further two.
The decision not to embrace that extension was made just one day before Domain released its half-year results, noting both revenue and EBIDTA were down 8 per cent.
“For the first half of FY20, Domain delivered a solid performance in the context of the challenging period which the Australian property market has been experiencing,” Domain Chief Executive Officer and Managing Director, John Pellegrino said.
“Revenue of $147 million reflects a like-for-like reduction of 8 per cent partially offset by efforts to simplify and optimise the business which delivered like-for-like cost reductions of 7.8 per cent. EBIDTA of $47 million declined 8 per cent like-for-like, a good result in the circumstances.
“Despite unprecedented declines in new market listings, Domain continues to leverage its key assets of effective listing parity and large, engaged audiences to deliver value to agents and consumers.
“Our residential business grew the number of paid depth contracts with agents and national depth penetration increased to a record level. Our efforts to drive efficiencies throughout this market downturn positions Domain to benefit from any cyclical recovery in property market activity.”
According to Domain’s ASX announcement, key achievements during the first half of FY20 include:
- 7 per cent growth in residential yield
- Record unique audiences across Domain platforms with enhanced audience quality and marketing efficiency. Organic traffic grew 18 per cent and cost per inquiry reduced 19 per cent
- 22 per cent underlying growth in commercial revenues
- The launch of Domain for Agents and Domain for Owners to add even more value to agents and consumers
- 72 per cent revenue growth in Consumer Solutions, supported by a business that is “scaling well, with strong operating metrics at Domain Loan Finder where unconditional approvals and settlements doubled”
- Continuation of a simplification and optimisation strategy to deliver improved performance and business transformation with an 8 per cent like-for-like expense reduction. Over the past 18 months, around $60 million in costs not aligned with Domain’s next phase of growth have been removed through divestments and cost discipline
- The acquisition of Real Time Agent to deliver value to agents and consumers through differentiated, real time data and insights
- Ongoing investment to leverage our data capability to deliver value-added insights
Mr Pellegrino indicated the company was now looking to the future and its strategy.
“The strategy we have established, and are pursuing, is building a customer-centric Australian property market place to drive our next phase of growth,” he said.
“Agents and consumers are at the centre of everything that we do, and we remain wholly focussed on providing them value at every step of their property journeys.
“We are excited by the opportunities for long-term growth arising from our three strategic pillars: Growing our core listings business, growing new revenue in consumer solutions, and simplifying and optimising our business.”
Meanwhile, Domain chief customer officer Jason Chuck told the Sydney Morning Herald the company was now in discussions with Cricket Australia about other ways to evolve their relationship with them outside of the men’s Test cricket naming rights sponsorship.
Mr Chuck noted Domain was “moving away from that particular vehicle” because of a fresh desire for a more targeted and local marketing approach as opposed to one focused on generating national awareness of the brand, which was the rationale behind the Test cricket deal.