The iProperty Group (ASX:IPP) has today released its half-year results. The good news for the company is that revenues are up 80% year on year to AU$5.2m for the first half of 2011. The other good news is that the loss improved from AU$1.5m in the first half of 2010 to AU$1.1m in first half 2011.
So what is behind these strong results? As Chairman of the iProperty Group, I thought it would be good to give you my perspective on how the business is travelling and where it is heading.
Our Malaysian business is firing on all twelve cylinders. What is abundantly clear is that when you have a dominant position in the market, the business starts to build its own momentum. When looking at the half year on half-year results, the business is up 114%. Especially pleasing is the 146% growth in online revenues.
As all property portal owners know, driving growth in online revenues is critical to the long-term success. The reason for this is simple: as the variable costs are almost zero, long term online revenues have the potential to deliver high margins. It is all a game of getting to scale. I therefore have to congratulate the Malaysian team on a great result. Given that the business is only scratching the surface of real estate advertising, the challenge is how the team can accelerate growth.
Both Hong Kong and Singapore have also delivered strong half year on half year growth. While not in the same league as Malaysia (due to competitive tensions), both of these businesses have done extremely well. Of particular note is the Singapore business that, in spite of a strong competitive market, delivered a 79% year on year revenue growth.
Like Malaysia, the next hurdle for both the Hong Kong and Singapore teams is to maintain and develop this success. For all portals around the world, this can be achieved through absolute clarity on the mission that is most important to them – for example, signing up agents or developers.
When looking forward in the business, the recent acquisition of the number one and number three portals in Indonesia creates a fantastic, new long-term growth optio. From first-hand experience in Malaysia, and from historic experiences in Australia, France, Germany and the UK, we know that clear market leadership can create massive upside value.
The other good news for the business over the last 12 months has been the AU$9m capital injection by Seloger – the French market leader. This not only helped to create a much stronger balance sheet for the business, but it also provided funds to accelerate growth.
Overall it has been an excellent six months for the business. We have strengthened our position in each market, entered Indonesia and created a strong balance sheet. We have a great team in place and a strong, cohesive board providing clear direction to management. The challenge is now simple – execute well!
Disclosure: CAV Investment Holdings, a related party of Classified Ad Ventures – the owner of Property Portal Watch – owns shares in iProperty Group.
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