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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
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Thank you for standing by, and welcome to the REA Group Q3 FY 2020 Financial Results Conference Call.[Operator Instructions] I would now like to hand the conference over to Mr. Graham Curtin, General Manager of Group Finance. Please go ahead.
Good morning, everyone. My name is Graham Curtin, General Manager of Group Finance, and I'd like to thank you for joining us to discuss REA Group's results for the third quarter ended 31 March 2020.As you're aware, the quarterly numbers we published are very much top line results, so we're restricted in the amount of detail we can give. Our CEO, Owen Wilson, will provide a business update. Then our CFO, Janelle Hopkins, will talk to the financial results. Following this, we'll be happy to take any questions you may have.With that, I'll hand over to Owen.
Thanks, Graham. And good morning, everyone.Let me start by saying what an extraordinary few months it's been as governments, businesses and our communities have grappled with the social and economic impacts of the COVID-19 health crisis. In the midst of these challenging circumstances, REA delivered an improved performance for the quarter ended 31 March. This reflected the continued recovery of the real estate market prior to the effects of COVID-19 and excellent cost management. Revenue was $199.8 million, an increase of 1%. And EBITDA from core operations, excluding share of losses from associates and joint ventures, was $119.6 million, an increase of 8%.During the quarter, we saw gradual improvements in national residential listings, led by Melbourne and Sydney. This trend was particularly evident in the first half of March. National listings were up 3% midway through March with listing increases of 15% in Melbourne and 24% in Sydney. This was before the impact of COVID-19 was felt, which caused listings to finish down 2% for the month. Overall national residential listings declined 7% for the quarter, while Melbourne and Sydney were up 6% and 5%, respectively. In the Developer market, new project commencements were down 24%.Before I talk to our business highlights, I'd like to acknowledge and thank all of REA Group's employees for their incredible efforts throughout the quarter. I've been extremely proud of the way our team has not only successfully adapted to virtual working arrangements, but also, by the way, they have rapidly delivered so many innovative solutions to support our customers and consumers. Never before has the delivery of new products, features and support measures been so critical to ensure Australia continues to have a well-functioning property market. I'll touch on some of these later.Looking at market conditions. Prior to the impact of COVID-19, the property market was in full flight. We saw listing volumes continually improving in the weeks leading up to mid-March. We also saw record audience numbers and strong buyer activity. February saw our highest-ever number of visits to realestate.com.au at 93.5 million, up 18% year-on-year. We also had record app launches at 38.6 million, up 26% year-on-year. In March, we hit a new record audience number with 10.7 million people visiting our site, up 23% year-on-year. Inquiries for properties for sale on realestate.com.au were up 29% year-on-year for the quarter, while average auction clearance rates remained high at 77% for the quarter across Melbourne and Sydney. These numbers demonstrate the positive market momentum we were seeing pre-COVID-19.Turning now to our strategy. We recognize the importance of actively managing short-term business requirements while staying focused on the delivery of long-term growth opportunities. This balance will ensure we continue our position of strength post-COVID-19. Our core priorities remain unchanged: firstly, providing our customers with access to the largest and most engaged audience of property seekers; secondly, providing the richest content, data and insights to empower our customers and consumers throughout their property journey; and thirdly, delivering superior customer value through products and features that drive valuable leads and great ROI.Turning to our consumer and customer highlights for the quarter. We're continuing to push boundaries, launching innovative solutions while working virtually. Our focus has been to enable real estate agents to successfully connect with as many consumers as possible despite social distancing restrictions. Responding to the government ban of in-person auctions, REA launched Online Auctions. This new feature enables agents to promote their vendors' upcoming auctions and seamlessly link through to the preferred auction technology platform. Since launch, we've formed partnerships with 4 of Australia's leading online auction providers, and we've seen hundreds of properties listed for online auction on our site. We launched Digital Inspections. We've seen incredible uptake since launch. Over 47,000 buy and rent listings now feature virtual tours, helping connect agents with buyers and renters. We're currently seeing over 2 million views each week across digital inspections and 3D tours.At a time when Australians are looking for trusted sources of property news, total visits to the news section on realestate.com.au increased 80% for the quarter year-on-year. In April, we hit a new record number of visits at 6.6 million. Our team of journalists and economists are providing insightful content to allow people to make the most informed decisions while also helping to stimulate the market generally. During the quarter, we launched the ability for consumers to search by address in the realestate.com.au app. This means app users can now quickly find any property in Australia, including listings to buy or rent or the property valuation and history for the 14 million properties on our site.Turning to our customer highlights. Our customers remain front and center as we look to counteract the market challenges COVID-19 creates. We've introduced a range of support measures to provide our customers with financial relief. We also changed our listing products to give agents greater flexibility and the tools they need to help give vendors the confidence to list their properties. These initiatives include reduced subscription fees, providing the ability to relist or re-upgrade for free, campaign extensions for new developments, shorter-duration products and delayed contract price increases until further notice. Responding to agent feedback, last week, we announced a number of additional offers available to our Premiere All customers designed to help stimulate the market. This includes our new pay-on-sale offering, which will be in market until 30 June. With pay on sale, our Premiere All customers can apply this product to 20% of their listings, which means that vendors' advertising costs are paid only if the property sells. We've received incredibly positive customer feedback around the flexibility and variety of offers we now have in market with an option available to suit every vendor.To help our customers stay on top of the most recent COVID-19 news, REA introduced weekly newsletters, videos and webinars featuring our economists. To date, almost 7,000 customers have attended our webinars. And our market-related videos have been viewed over 200,000 times, proving to be highly relevant support tools.Turning to our Financial Services business. We've now generated almost $2.5 billion in home loan applications. Pleasingly, we've seen higher recruitment of new brokers and an increase in settlements compared to the same period last year. During the quarter, we successfully consolidated our broker offerings under the Smartline brand. We're now directly connecting realestate.com.au consumers with all of our brokers, with leads flowing straight into the Smartline platform. This is further streamlining the process of helping people to finance their next property.Looking at our Asia business. Like Australia, our priority has been to ensure the health and safety of our employees while delivering appropriate customer support measures in response to COVID-19. During the quarter, Malaysia and Hong Kong both maintained their leadership positions at 1.5x and 1.1x their nearest competitor, respectively. Janelle will provide more color on the Asia results. The 99.co JV was successfully finalized on the 28th of February. It's exciting to have the JV underway, as it strengthens our competitive position in the growth markets of Singapore and Indonesia.Before I hand over to Janelle, a few closing remarks from me regarding current market conditions. COVID-19 continues to have a negative effect on the real estate market, which will impact the group's revenue. However, we know that Australians' passion for property remains. We've seen a strong rebound in buyer activity on our site in April. Search activity on realestate.com.au is now back to the levels seen prior to the COVID-19 pandemic. Since the weekly low of 5 weeks ago, the sale search activity has increased 46% nationally, and rental search activity is 45% higher. For the month of April, visits to the buy section of the site were up 20% year-on-year, while buyer inquiries were up 24% year-on-year. While buyer interest is strong, customers are telling us there is still some hesitation to commit to transactions in the current environment, and we've not seen any sign of listings recovery at this stage. We do know that a return of consumer confidence will be a key factor to the recovery of the housing market. We now have the tools in place for agents to provide vendors with the confidence to bring their properties to market.At the same time, we're beginning to see the relaxation of COVID-19 restrictions that impacted the property market. Open for inspections and on-site auctions will recommence in New South Wales this weekend, and other states are following to varying degrees. REA is well placed to support vendors and customers as the market returns.I'll now hand over to Janelle to talk through our financial results in more detail.
Thanks, Owen. And good morning, everyone.REA delivered an improved performance for the quarter, reflecting the continued recovery of the real estate market prior to the effects of COVID-19 emerging in mid-March. Revenue for the quarter from core operations grew by 1% to $199.8 million. Core operating expenses were down 9% on prior year at $80.2 million. And EBITDA from core operations excluding share of associate losses increased by 8% to $119.6 million due to the continued focus on cost management across the group. Despite the increase in EBITDA, free cash flow reduced by 20% for the period primarily due to timing factors, with stronger debtor collections this December versus prior year, a reduction in trade payables and an increase in tax installment payments during the period.As Owen noted earlier, despite the Australian property market showing strong signs of recovery during the quarter, led by Melbourne and Sydney with their listings growing 6% and 5%, respectively, national residential listings declined 7% over the 3-month period. Australian Residential revenue was flat for the period. The stronger revenue growth achieved from the recovery in Melbourne and Sydney, combined with the benefits of price changes, higher depth penetration and improved product mix, has not yet offset the weaker market conditions still being felt in other parts of the country.Moving to the Commercial and Developer business. Revenue increased as a result of higher depth penetration in the Commercial business and extended project profile duration in the Developer business. This was partially offset by lower Developer revenue due to the 24% decline in project commencements for the quarter. BIS Oxford is projecting further declines for the remainder of this calendar year.Media, data and other revenue declined due to the reduction in Developer display advertising as a result of lower new project commencements, reduced advertising revenue in key segments following the bushfires and lower available inventory as Premiere listings increased. Pleasingly, Financial Services revenue increased due to higher settlements in line with stronger property market and improved broker productivity coupled with the timing of partnership payments during the period.The Asia segment revenue also increased for the quarter, driven by strong growth in Malaysia underpinned by improved customer acquisition. This was partially offset by the ongoing disruption in Hong Kong and event cancellations in response to COVID-19. As planned, on the 28th of February, we finalized the 99.co JV, which resulted in a noncore gain on sale of $7.7 million. The operating results of the joint venture are now included in the share of equity-accounted investments.The group continued its cost management program with reductions in marketing, consultant costs and discretionary spend. Combined with efficiencies gained from an organizational realignment undertaken in the first quarter, this resulted in a 9% reduction in core operating expenditure.During the quarter, the Board approved and paid an interim dividend of $72.4 million or $0.55 per share. This was a consistent payout ratio to prior year.Turning to our balance sheet.We have a strong balance sheet, low debt levels and a cash balance of $135 million at 30 April 2020. As a contingency against the potential impacts of COVID-19 having a more significant and prolonged impact on the market, we have further strengthened our liquidity position by entering into a $149 million loan facility with our banking group, plus obtained a $20 million overdraft with NAB. On our current estimates, neither of these contingent facilities are expected to be drawn this quarter.Looking forward, the real estate market continues to be negatively impacted by COVID-19, which will impact the group's revenue. Since mid-March, there has been a negative impact on residential listings, with April national residential listings down 33% with declines of 27% in Melbourne and 18% in Sydney. Our customer support initiatives include increased advertising duration, which is expected to extend the revenue recognition period. The group is working proactively to offset a portion of the anticipated revenue declines by implementing cost-saving initiatives. These include workforce planning measures, reduction in marketing costs and a review of all supplier arrangements. Our Q4 core operating expenses are expected to be approximately 20% lower compared to Q4 last year.We believe these cost-saving initiatives are balanced to support both the short-term performance and long-term growth initiatives of the group.I will pause there. Operator, we will now open for questions.
[Operator Instructions] Your first question comes from Kane Hannan from Goldman Sachs.
Just a few for me, please. Just firstly, obviously, the million-dollar question around the listings outlook. I know it's something difficult to predict but would just be interested in your views around whether you think it's likely to get worse from [indiscernible] numbers before it gets better [indiscernible] the phasing of the recovery back until we get to a more normalized turnover level. Secondly, just again a bit of a higher-level question around your pricing structure. Given those price deferrals, the pay-on-sale introduction, the leads pricing is still a bit of a work in progress. Just interested in your thoughts around whether this could present a bit of an opportunity to do something more significant with your pricing structure and then the various tiers. And then finally, just lastly, the free cash flow, just interested what drove the decline in that in the quarter and how we should be thinking about that into the fourth quarter.
Thanks, Kane. Look, in terms of listing outlook, it is very difficult to forecast what's going to happen to listings. It is very encouraging that we're seeing so much buyer activity on our site. That's usually, if the buyers are there, sellers will follow, but we've not seen any sign of recovery listings as we sit here today. The good news is it's also not getting worse. So as the restrictions are lifted across the country, you would see a more normal operating property market. We do know the banks are lending and we do know interest rates are at all-time lows. So whether we've hit the bottom now or not, it's hard to tell and hard to predict where it's going to go, but it does feel like conditions are going to be better as we go forward. All that is predicated on obviously there being no rebound in the virus and the need to go back to further restrictions. In terms of pricing, again I think you're right. I think we have given ourselves the license at some stage in the future to review our price, and I think the moves we've taken have been incredibly favorably received by our customers. They appreciate the deferral of the price increase that was contracted for 1 July. They've also greatly appreciated the flexibility we've shown in our products, our subscription discounts, et cetera. And so I would say that, that does give us flexibility, I think, in terms of the magnitude of future price increases. I'll let Janelle talk to the cash flow question.
Thanks, Kane. On the free cash flow, it really is the timing issue for this quarter, where the benefit we've got from higher EBITDA flowing through to cash has been offset by lower debtor collections. We put a new collection system in last year. So actually our debtor collections were stronger this December than last December, and that's then flowed into this quarter. And our timing of our creditor payments were also lower and our tax installments were higher. On Q4, it's really hard to predict. Obviously, it's going to base on what happens from an EBITDA perspective, but I can say in relation to April we haven't seen any deterioration. Our collections are strong, and no deterioration in our debtors' books so far.
Your next question comes from Eric Choi from UBS.
I'll have another go at listings. Just was wondering if you can tell us what's happening to new listings on a week-on-week basis; and given there was sort of a bounce in WA post the easing of their restrictions, whether we've seen any sort of positive signals in New South Wales as well. And then just a second question on rentals, can you just tell us how rental listings volume movement is compared to that 33% decline that we saw in for-sale listings? And then just lastly, on costs. I think you're guiding to a mid-70s cost number in the June quarter, but just because that's a seasonally high-cost quarter, I'm just wondering if we can go even lower than that into FY '21 if required.
Look, Eric on listings, as I said, week-on-week, we're not seeing any change from April. And I think it's too early for the lifting of restrictions in New South Wales to flow through to listings at this point. It takes a while for between a vendor making contact with an agent and getting a listing on site. So it hasn't come through yet in New South Wales, but WA -- if WA is an indication of where things might go when restrictions are lifted, then that is encouraging. It's just we're not seeing it yet. Rental listings have been very steady. We saw, we did see a surge in rental listings in April. And that was largely off the back, we think, a lot of Airbnb landlords were trying to switch to more traditional tenancy arrangements because people can't travel. Airbnb revenue was down to 0, and so they were coming back. We also, I think, saw vacancies from accommodation that was normally for foreign students. We think that was coming back on the market. As we sit here today, rental listings are pretty flat. So it's a very stable market, the rental market. So no major impact from that.
And on costs, Eric. Clearly, in Q4, we've taken significant actions in response to the expected declines in revenue. They include things looking at our staffing costs; looking at all our discretionary expenditure; and pausing some of our marketing spend, particularly on things like customer events, where we can't hold them at the moment; and absolutely looking at all of our supplier arrangements and renegotiating them in this current environment. When we think into '21, a combination -- there'll be a combination of impacts. So some of the benefits we will have from Q4 will play through into '21 because there will be permanent savings flowing through from things like the organizational restructure we did at the start of last -- of this year, but some are timing. So things like the supplier renegotiations are more of a timing nature. Ideally, we -- the costs we've taken, some of them, we'd really be liking to put back in, things like marketing, but it will really depend on our revenue position going forward into '21.
Your next question comes from Eric Pan from JPMorgan.
Just 2 for me. There's been an increase in off-market listings during the crisis. How much do you estimate that has impacted your listings volume? And are you seeing that trend proliferating? And then just secondly, what are you seeing in terms of the U.S. and Indian markets in terms of impacts from the crisis? Should we expect increased losses from those markets?
Look, in terms of off-market listings, Eric, I mean, by their nature, they're impossible to measure, so it's very hard to tell. We hear anecdotally that in some areas they've increased. And I think that was largely in response to some consumers and vendors being reluctant to commit to marketing in this environment. And that's why we've brought some of the measures in just to give our customers the tools they need, to give vendors the confidence to list. So we haven't seen any noticeable increase, but as I said, it's very hard to measure. What I would say, and this -- our customers are saying this to vendors, that in this market, you are -- your property will be invisible if you don't show it to the 10.7 million people on our site. And so it's really, I think, only a desperate vendor who doesn't list in this environment. In terms of the U.S. market, they've had very heavy impact of COVID-19 across there. Depending what happens with their restrictions -- you've seen all the protests, that they are looking to lift restrictions so much regardless of the health outcomes. And as you heard on the news call, the support measures we've put in place will have an impact on revenue in Q4. What didn't get a lot of coverage is that they've also taken a lot of cost measures and taken a lot of costs out of their market, but we don't give a forecast for that business.
And in terms of the Indian subsidiary?
Indian subsidiary. Again, India is in shutdown. It is having an impact on the business, and therefore you can expect that their numbers will reflect that.
Your next question comes from Lucy Huang from Bank of America.
I just have 3. Firstly, actually, are you able to talk or give some more color on depth penetration? Have you seen growth across the states? And do you think in this environment you're continuing to take share from competitors, or do you think the market is holding relatively stable? Secondly, in terms of the new products that you mentioned like digital auctions and inspections, do you think there's a pathway to monetization in the future? I guess, do you think this trend is likely to continue with agents more receptive to using these products? And then just one last one, on the pay for sale (sic) [ pay on sale ] pricing structure, I guess, moving forward once we've cycled off COVID-19, do you think there is likely to be a push from agents to keep that model in place? And what's your view on that? And just in the near term as well, what kind of financial impact do you think that will have on top line in the near term?
I'll speak to the auctions and pay on sale, and I'll let Janelle talk to penetration. Look, in terms of Online Auctions, it has been a necessary way for the auctions to take place given the restrictions. What we're hearing from our customers is, post-COVID, they would much prefer to go back to the in-street or in-room auctions. Our customers, our vendors love the theater of that, the in-street auction. It is a good way to talk to unsuccessful bidders, et cetera. So I -- there will be probably Online Auctions in some form, maybe on things like land and developments, but I don't think it's going to stay as a permanent feature to the level it is at the moment. In terms of pay on sale, that is at a premium price to a normal Premiere listing, and that is to offset the fact that some of the properties that get listed won't sell. It's going to have a very minimal impact on overall revenue, but it will increase deferral of revenue. Revenue recognition will be extended because obviously we won't -- we can't recognize the revenue until the property has sold. As whether that's a permanent feature, we will wait and see how it performs. It's in the market for 2 months. We'll seek feedback from vendors, from our customers; and make a call on that further on.
And in response to your question on penetration, yes, absolutely, we've seen growth in penetration again this quarter and across all states.
And just to follow up, sorry, with the pay for sale (sic) [ pay on sale ] listing. What type of premium has been applied? Are you able to give us an indication?
Yes. It's a 20% premium. And what I should say: Whilst auctions, digital auctions, probably will go back to normal, my view is that Digital Inspections are here to stay. We're seeing 2 million views a month -- sorry, a week, to Digital Inspections. And I think consumers are going to want to have that as a feature of our market going forward. It will enable them to really hone down on the ones they want to inspect physically. Physical inspections won't go away, but I think you'll find consumers do less of them because they can eliminate the ones that don't fit their needs via the digital inspection tool.
Your next question comes from Entcho Raykovski from Credit Suisse.
First, I'm just going to have a go at the penetration question as well, maybe a bit more specifically. It looks like on an overall basis the benefit from penetration is pretty limited even though Sydney and Melbourne volumes are up for the quarter. I guess, if we look at national being down 7%, your price increase of 7% exactly offsetting it. So I guess, can you talk a bit further as to why that's driving it? I mean, did you see lower depth penetration in particular regions? I know you've broadly talked about that. And then from a timing perspective, was there a pickup towards the end of the quarter, particularly in March, as volumes improved? Sorry. I know it's a long question, but that's the first one. And then secondly, around costs, could you give us an indication of the breakdown of the cost reductions for Q4 between the different buckets, so workforce, marketing and supplier arrangements? And just interested whether you're factoring any JobKeeper benefits in that guidance and whether you think you're likely to be eligible.
Thanks, Entcho. So on the penetration: so we have seen increased penetration, as I said in the answer before. The challenge for this quarter is we did see the substantial growth in Melbourne and Sydney coming through in late February and into March. And so what you don't see is obviously, from a revenue recognition perspective, some of the benefit of that is deferred into April because they're 60-day products. So you don't see as much of the benefit coming through. Plus, in March, we did put those new offers out, which did also increase deferrals in the March result. So some of that is masking some of the benefits you're getting from penetration.
Got it. And sorry. Just as a follow-up to that, could you give us an idea of what sort of benefit the fourth quarter might get from some of that deferral?
We're not disclosing that at this point in time.
Okay.
On costs. So clearly we've looked across the board at costs. So the 2 -- obviously the 2 biggest drivers of the cost base is marketing and staff costs. On marketing, we -- clearly the savings will be coming through because we cannot do with many of the customer events, but we're not splitting out the delta between what is actually marketing savings versus staff savings. On the staff savings, as I flagged, it is things like we've looked at our bonus achievement percentages. We've also looked at where in the current environment, roles can't be performed. We've looked at whether we can redeploy them into other areas of the business where we're very busy, like our customer operation support area. Plus we've taken a decision to do a few additional short-term shutdowns of the business to save costs, but that will benefit that staff line.
And on JobKeeper, we have to -- we get grouped with News Corp, and we have to have a greater than 50% reduction in revenue. And so we don't qualify for JobKeeper, and I hope we never do.
Your next question comes from Roger Samuel from Jefferies.
Most of my questions have been answered, but I do have one, which is just in terms of your Premiere All contracts. Do you think you can sign up more agents to Premiere All in this environment?
Absolutely. And we have signed customers to Premiere All in the last few weeks. In fact, that's been one of the most pleasing aspects, that our staff have adapted so well to working virtually that we have had some big revenue wins done virtually by our sales force, including new Premiere signings in areas where we're not as heavily penetrated as others. So absolutely. And then if you look at the offers we put out last week for our Premiere customers around pay on sale and some of the other flexibility we're giving them, it's never been a more compelling time to sign up to Premiere All. And so we are getting a lot of interest from customers.
Okay, all right, but have you got a sense of the real estate agency industry and whether people are going out of business and potentially they may cancel your subscription and the contracts as well?
No, we're not seeing any signs of our customers going out of business. This is not the first market downturn we've seen. And so I mean, even this time last year, we were talking about some pretty heavy drops in listings. Our customers have become quite adept at managing through cycles. I think they're being very quick to act on their own costs. I think most of our customers will qualify for JobKeeper, so -- and they will qualify also for some of the support measures that the banks are putting in place. As Janelle said, we're not seeing any degradation in our debtor balances, our payments, et cetera. I think our customers are managing through this well.
[Operator Instructions] Your next question comes from Paul Mason from E&P.Your next question comes from Ivor Ries from Morgans Financial.
Owen, Ivor Ries here. Just a question to refresh my memory on the extension to 60-day terms for your products. Does that apply to all of your depth products now or just a limited share?
So that's the offer we put out in March. That does apply to our -- all of our depth products. The offer was that, if a property doesn't sell in the term that it's contracted, you get to relist at the same level for free.
Yes. And is there a sort of a...
[indiscernible] that implies really to properties that don't sell.
Yes. And is there a sort of a sunset clause on that offer just like that it would expire after 6 months or something rather? Or is it in place for 12 months?
No, no, no. All of our offers expire on 30 June. And there's one offer that we've got in for Premiere All customers only, which is the shorter-duration product. That's only for May, but everything else expires on 30 June.
Your next question comes from Fraser Mcleish from MST Marquee.
Just 2 for me, just on the contracted price changes that you've delayed. Should we expect -- is that a 12 months delay? Or would your intention still to be to sort of hit the button on that contracted increase when market conditions improve? Yes, that's my first one. And just my second one is, Owen, just to qualify just on the comments around the short-term listings. I mean Domain, I think, had said, since Easter, they've actually started to see listings kind of flat or a bit better each week. Are you saying you're not seeing that?
Okay. Now look, in terms of the price increases, we're just -- we've said, just deferred until further notice. And that will depend on the market. As I said, I think the support we've shown to the market in general and our customers in particular has given us license to make that price increase if the market returns; or wait 12 months and do something, I think, larger next year. We'll really just wait and watch and see what happens to the market and do the right thing by our customers and the market in general. In terms of listings, we haven't seen week-on-week increases. I think I did see the comments made by Domain, and I suspect they were looking at a week -- Easter was in different weeks this April versus April last year. And if you looked at a week compared to the Easter prior, you do get some crazy numbers. So if you look at April as a whole, our numbers are quite consistent. And if you look at what's happening into May, they're roughly similar to April. As I said, we haven't seen an increase yet in listings, so I can't comment on what they were seeing or what they're commenting on.
I don't think they were talking about versus PCP. I think they were just saying on absolute level the week after April was a bit better and the week after that was a little bit better. So still big declines on PCP.
No, I can't comment on what they -- I can only comment on what we see.
Your next question comes from Paul Mason from E&P.
Sorry about before. Just one for me. I just wanted to get your thoughts on sort of elasticity of demand. Today, you guys have shown sort of 1% revenue gains and a volume impact that's sort of negative 7%. And we've seen from your competitor similar revenue gains despite a much higher quoted overall yield gain, which implies a bigger volume impact. And so I just want to get your thoughts on sort of how we can interpret the relativities of those to your report.
I think we've said before our competitor is very much heavily dependent on Melbourne and Sydney. And so you saw that last year when Melbourne and Sydney led their decline. They were impacted much more significantly than we were. And as you saw in these numbers, Melbourne and Sydney are leading -- were leading the recovery, and so therefore, they get a better benefit from that. Melbourne and Sydney are clearly the highest-yielding markets for both of us. And so if you're heavily dependent on Melbourne and Sydney and Melbourne and Sydney are going up, you're going to see a different outcome. We've got a much more balanced portfolio across the country. And unfortunately, during the quarter, the non-Melbourne and -Sydney markets were down.
Thank you. There are no further questions at this time. I will now hand back to Mr. Wilson for closing remarks.
Great. Thank you for taking the time to join us today.Look, it's no doubt that these are strange and uncertain times. And we face circumstances that none of us have seen before, but what I do know is that REA is very well placed to manage through these conditions and continue our position of strength well into the future. We look forward to updating you again when we release our full year results.Thanks, everyone.