REA takeover target growing strongly

The portal business being acquired by REA Group has posted strong revenue growth.

Asia-focused iProperty Group reported cash collections of $32.3 million for the last three months of 2015 – an increase of 49.5 per cent on the December 2014 quarter.

This was achieved despite a worsening of the Malaysian ringgit versus the Australian dollar, with Malaysian operations contributing more than 50 per cent of annual revenue.

The group also does business in Thailand, Indonesia, Singapore, the Philippines, Hong Kong and Macau.

According to the report, iProperty also achieved a positive net operating cash flow for the fourth consecutive quarter.

“This result is particularly good as iProperty incurred prepayments for the 2016 property expos, a weakening property market, unfavourable foreign exchange movements and expenditures relating to the iProperty-REA merger during the quarter,” it said.

Managing director Georg Chmiel said the latest financial numbers reflect the significant growth that iProperty’s businesses have experienced over the past few quarters.

“We are looking forward to continuing the growth as part of the REA Group from February 2016, as soon as the scheme is approved,” he said.

Shareholders of iProperty will vote on REA Group’s proposed acquisition on 28 January.

The deal values iProperty at $751 million, although REA Group would only pay $578 million as it already owns 22.67 per cent of the company.

Morningstar, an independent investment analyst, released an upbeat report on the takeover, concluding that the potential gains far outweigh the risks.

[Related: Takeover involves ‘political stability risk]

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