(Corrects to change syntax in first paragraph)
* Records heavy writedown of A$178.8 million
* Posts annual net loss of A$137.6 million
* Sees “encouraging signs” of buyer activity into FY2020
By Shreya Mariam Job and Aditya Soni
Aug 16 (Reuters) - Real estate classifieds platform Domain Holdings Australia on Friday posted a wider annual net loss as a steep property downturn led to a writedown, but the company sees green shoots of a market recovery in 2020, sending its shares higher.
The company took a goodwill impairment of A$178.8 million($121.14 million) during the year to account for the lower 2019 listings environment, it said in a statement.
Stricter lending rules, higher property taxes on foreigners and an apartment glut have led to the steepest price drop in the Australian property market in a generation.
Domain’s new listings declined about 12% nationally in fiscal 2019, pressured by a drop in auction volumes in Sydney and Melbourne, it said.
The company’s net loss came in at A$137.6 million in its first full year results since listing, compared with a loss of A$6.2 million a year earlier.
Excluding the impact of the charge, underlying net profit fell nearly 30% to A$37.4 million.
However, the company said it had seen some “encouraging signs” of buyer activity in the first weeks of fiscal 2020, imbuing confidence in investors.
“Domain is better placed than ever to deliver on our growth ambitions, as the market returns to a more positive listings environment,” Chief Executive Officer Jason Pellegrino said.
Shares jumped as much as 5.1% to an over two-week peak, while the broader market was little changed.
Kyle Rodda, market analyst at IG Markets, said the outlook for the Australian property market has improved with investors hoping that the factors that have driven shares lower could be reversing.
“Lower interest rates, tax cuts, loosening of lending standards are fitting for consumer confidence who are hoping for a turnaround,” he added.
Interest rate cuts by the country’s central bank coupled with easing lending rules helped improve buyer confidence at property auctions, data released by a major analysis firm last month showed.
With markets pricing further cuts this year and in 2020, industry watchers have said that while a return to boom time is not in the horizon, signs suggesting a bottoming-out for the sector is imminent.
$1 = 1.4760 Australian dollars Reporting by Shreya Mariam Job and Aditya Soni in Bengaluru; Editing by Stephen Coates and Rashmi Aich