Domain, Nine Entertainment’s 59%-owned digital real estate listings business has sought more debt from its lenders and intensified its cost-cutting.
Domain told the ASX that it had received fresh debt facilities from its lenders, waivers on its financial covenants, and had started making staff cost cuts in response to the impact of COVID-19.
Domain said it had a new agreement with its bank lenders to provide an 18-month $80 million debt facility on top of the $225 million facility announced last November.
The lenders have also agreed to waive Domain’s financial covenants for June and December this year.
That news saw Domain shares star on the day with a sharp 18% jump in the share price to $2.55.
Its rival, REA, 61% owned by the struggling News Corp, has already started cost-cutting and in March deferred a fee rise.
The company will temporarily cut staff costs by 20% which includes reducing work hours or employees being offered a salary packaged with share rights. The company said staff and related expenses account for 45% of its cost base.
Domain also said it had paused its print publications until the demand for listings returns and cut its marketing spend on outdoor, radio, sporting, and events with the focus remaining on areas where it says audiences remain engaged.
For the March quarter, Domain reported digital revenue had increased 3%, excluding divestments, and 15% for the month of March. The company said April listing volumes “are reflecting COVID-19 impacts”. In other words, they have fallen otherwise, if they had risen Domain would have pointed that out.
March’s performance provides confidence it is well-positioned when the markets return to normal.
Overall revenue was up 1% for the quarter.
In March REA withdrew its 2020 profit forecast and revealed the start of cost reductions.
Domain did not provide a revenue outlook at its half-year results, only cost guidance.
