Bigger profits reflect happier agents: REA

REA Group has reported improved customer satisfaction ratings since making its controversial pricing changes last year.

Chief executive Tracey Fellows told Real Estate Business that the group’s strong half-yearly results, which were announced last week, show the value that offers.

“I would say the strong results are a reflection of the value we deliver to our customers and the value we’re delivering to vendors – marketing your property on helps that sale process,” Ms Fellows said.

“Customer satisfaction ratings have improved. I want them to keep going up and I want to make sure I have delighted customers.

“What we do see in those customer satisfaction ratings is that consistently our customers say we deliver good return on investment for them, and we contribute in a positive way to their business and what they’re trying to achieve.”

REA Group reported a 25 per cent year-on-year increase in underlying revenue and a 34 per cent increase in underlying profit for the six months to 31 December 2014.

The group attributed this to its “increased focus on agents” and “new market-based pricing model”.

Ms Fellows confirmed that REA Group would freeze residential prices until at least 2016, and also said it had no plans to change its policy of only accepting listings from agents.

“I think that’s a really important, strong statement that we make, and we do that because we think that’s the best way for consumers to sell their property,” she said.

REA Group is such a profitable organisation that its most recent profit result was not far behind that of its ultimate owner, News Corp.

REA Group posted an underlying half-yearly profit of $94.7 million and a headline profit of $126.4 million, although this included $41 million in one-off sales.

News Corp achieved a half-yearly profit of US$142 million (AU$182 million) on revenues of US$2.3 billion.

REA Group, like News Corp, is also an international organisation, with businesses in Asia, Europe and the US, and plans to increase its global sales.

Australia now earns 90.4 per cent of group revenue, but Ms Fellows told Real Estate Business that the time might come when it earns only a minority of group revenue.

[Related: REA trademark claim slammed by peak body]

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