Rent.com.au has released its quarterly results for the period ending March 31, noting new records have been set for visits to its website and apps.
CEO Greg Bader said the March quarter was typically when Rent.com.au sees the greatest number of renters moving home, and the March quarter proved no different, with increased visits to the website and apps, as well as additional demand for Renter Resumes and products.
“We anticipated this seasonality, so it is especially pleasing that our revenue did not just grow compared to the December quarter as expected, but also grew significantly by 20 per cent compared with the same busy quarter of 2019,” Mr Bader said.
He continued the key driver of revenue growth were renter products, with RentCheck proving particularly popular.
Used by renters to enhance their Renter Resume in preparation for applying for their new rental home, RentCheck revenue grew 30 per cent compared with the same quarter in 2019.
“There was also a promising contribution from our new partnership with AGL which, although not yet operating at the level we believe it can get to, grew revenue from our RentConnect product by 18 per cent over the same period in the previous year,” Mr Bader said.
“The ongoing recovery of Advertising Sales revenue further contributed to year over year revenue growth. And what has been pleasing in that area of our operations is that we’re developing solid relationships with key advertisers who are achieving good results from accessing our renter
“There is still a lot more value in this space, including deeper integration with advertisers, and we are in early discussions with advertisers regarding the opportunity presented by RentPay”.
Mr Bader noted given the company’s near-term goal of breaking even, continued EBITDA improvement was as important as the revenue growth.
Results indicate Rent.com.au managed to deliver an improvement of 3 per cent vs the December quarter and an impressive 50 per cent vs the March quarter in 2019.
“This improvement came despite our increasing investment in the research and development of the new RentPay product,” Mr Bader said.
“If we ignore this RentPay impact on EBITDA, the rest of the Rent.com.au business improved EBITDA by 23 per cent vs the December quarter and 73 per cent vs the March 2019 quarter.
“In fact, for the month of March 2020, the EBITDA loss before RentPay was just $29k, our best ever result,” he noted.
“We also continue to invest in future growth opportunities in our core business.
“For example, during the quarter we implemented a new marketing automation platform, consolidating our customer facing systems into one integrated platform.
“This consolidation not only brings some cost saving benefits but also enhances our emerging data capability which will allow us to better tailor our customers experience of Rent.com.au and in the future, RentPay.”
As with most businesses across Australia, Rent.com.au had been impacted by the economic disruption and uncertainty caused by the measures taken to combat the coronavirus, Mr Bader acknowledged.
“Our staff are following Government recommendations and have been working from home for some weeks,” he said.
“Being an online business, the productivity impacts have been minimal, with daily ‘all staff’ updates to ensure continuity.
“We have ramped up our social media activity to keep our customers informed as industry changes occur, and our blog pages remain a trusted source of information for the renting community.
“There is always a certain level of people that need to move, or that had planned moves already in train, but in general the number of people searching for or moving to a new property has declined from mid-March onwards, and this has had an impact on search volumes and Renter Product sales.
“Activity across the advertising industry has dropped significantly because of advertisers pulling back on their ad campaigns as social distancing measures affect demand for their products and services.
“Rent.com.au has been similarly impacted but we remain in close contact with our advertising customers to ensure that we are well positioned to benefit when spending resumes.
“Likewise, we have used the lull in demand to reduce our own marketing spend,” Mr Bader said.
He noted Rent.com.au had been able to mitigate the significant forecast impacts on revenue through implementing a series of cost reductions and with support from government stimulus measures.
“We have substantially reduced salary costs for six months without redundancies, maintaining our full capability to ensure that we deliver RentPay on time and are ready to accelerate our growth as soon as we can,” Mr Bader said.
“We requested staff to consider voluntary salary deferral or reduction measures targeting a saving of 20 per cent. It is testament to the commitment of the team that we have exceeded this target,” he continued.
In addition, he said the Directors had agreed to defer their fees until the company’s annual general meeting, with a view to seeking shareholder approval to be issued shares in lieu of these fees.
Some staff have deferred a percentage of salary to October 2020, while others including senior management have accepted an issue of performance shares in lieu of a percentage of salary.
“It is disappointing that our growth momentum has been paused by this global crisis, however despite this Rent.com.au is in a remarkably good position to deliver on its potential,” Mr Bader said.
“I could not be prouder of how our team has pulled together to deliver on both our financial result as well as delivering on our broader goal of making renting easier.
“We are also strongly supported by a core shareholder base who share these goals and I am confident of delivering for them.”