ASX 200 rises 1%, Zip soars, REA reports

The S&P/ASX 200 Index (ASX:XJO) went up by 1%. The Zip Co Ltd (ASX: Z1P) share price jumped after and REA Group Limited (ASX:REA) reported.

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The S&P/ASX 200 Index (ASX: XJO) went up by 1.1% today to 6,841 points.

Here are some of the highlights from the ASX:

REA Group Limited (ASX: REA)

The real estate business announced its FY21 half-year result today for the period to 31 December 2020.

It said that revenue was down 2% to $430.4 million. However, operating expenses fell by 13% to $145.8 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 9% to $290.2 million, including associates. Net profit after tax (NPAT) went up 13% to $172.1 million and earnings per share (EPS) increased by 13% to 130.7 cents.

The REA Group board decided to increase the interim dividend by 7% to 59 cents.

The ASX 200 share said that the residential property market has shown continued signs of recovery with national residential listings increasing by 4% for the half, including an increase in Sydney listings of 19%. However, in Melbourne the lockdowns caused first quarter listings to decline by 44%. There was a rebound of listings in the following three months, leading to an overall decrease in the Melbourne market of 11% for the half.

REA Group said that it had been concentrating on costs, with all cost categories showing a decrease due to a combination of ongoing cost management initiatives, COVID-19 related savings and the deferral of some marketing spend in the second half.

In January, national residential listings were flat, with an increase in Melbourne of 12% and a decline in Sydney of 1%. The company continues to see strong levels of buyer enquiry, underpinned by low interest rates and healthy bank liquidity.

REA Group CEO Owen Wilson said: "We have delivered a remarkable first half result, particularly given the Melbourne market came to a virtual standstill during the lockdown. I am proud of the way our teams focused on the things we could control to deliver outstanding customer support and product enhancements to help consumers navigate the disruptions.

"Australia's property market appears to be on the march again, showing signs of a strong recovery in November and December. This was fuelled by the easing of COVID-19 restrictions, combined with increasing consumer confidence, record low interest rates and healthy bank liquidity."

The REA Group share price went up 1.6% today.

Splitit Ltd (ASX: SPT)

The Splitit share price dropped 2% after announcing an agreement for growth with Goldman Sachs.

Splitit said that it has signed a three-year US$150 million receivables warehouse facility with the US investment bank.

This doubles the size of Splitit's existing credit facilities, supporting US and European growth.

Splitit said that this gives the potential for gross margin expansion by reducing the use of existing shorter term, higher cost funding.

The CEO of Splitit, Brad Paterson, said: "This large committed facility from Goldman Sachs is a key pillar of our merchant sales volume growth strategy. Demand from merchants in the US and Europe for our funded model has never been stronger, and couple with our existing strong balance sheet, we now have the foundations in place to accelerate our growth plans whilst also driving improved margins."

Major market movers

There were some large movements in the ASX 200 today. The News Corp (ASX: NWS) share price went up 13.2% after reporting its own result.

Other big gains were the Zip Co Ltd (ASX: Z1P) share price rising by 8%, the Virgin Money UK (ASX: VUK) share price grew by 7.1%, the EML Payments Ltd (ASX: EML) share price rose 7.1% and the Nearmap Ltd (ASX: NEA) share price went up 7%.

At the red end of the ASX 200, the Janus Henderson Group (ASX: JHG) share price fell 5.6% after making an announcement.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended EML Payments and REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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