Real Estate Investar Group Ltd (AX:REV) saw a lower volume of property transactions closing in H117, resulting in slower revenue growth than expected. This was partially offset by lower overheads. Good working capital management preserved cash despite lower EBITDA. We have cut our forecasts to reflect slower revenue growth. The company continues to execute on its strategy to capitalise on its growing membership base of property investors to generate property-related transaction revenues.
H117: Property transactions disappoint
Real Estate Investar (REV) reported H117 revenues of A$2.2m (+14% y-o-y, -25% h-o-h). Revenues were lower than we expected due to fewer property transactions in H117. The completion of property sales can be lumpy, and management is confident that the volume of sales should be materially higher in H217. H117 EBITDA of -A$1.1m compared to -A$0.6m in H116. REV ended H117 with net cash of A$0.6m. We have revised down our FY17 and FY18 forecasts to reflect H117 performance, partially offset by lower operating costs. We continue to expect EBITDA to turn positive in H217 and forecast net cash at end FY17, although the company has noted that it is likely to raise further funds over the next 12 months.
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