Realogy Holdings Corp., a global leader in residential real estate franchising and provider of real estate brokerage, relocation, and title and settlement services, recently reported financial results for the first quarter ended March 31, 2013, including the following:
• Realogy’s net revenue for first quarter 2013 was $957 million, a 9% increase compared to the same period in 2012.
• The Company’s Adjusted EBITDA was $71 million in the first quarter, which was an increase of 34 percent year-over-year. The increase was primarily due to a 14 percent year-over-year increase in sales volume (home sale transaction sides times average sale price) at the franchised and company-owned real estate services segments combined.
• Net loss attributable to the Company in the first quarter was $75 million, which was after $89 million of interest expense, $42 million of depreciation and amortization and $3 million of debt extinguishment charges.
The Company’s combined transaction volume was up 14 percent for the first quarter of 2013. RFG, our franchise segment, and NRT, the operator of our company-owned brokerage offices, reported closed home sale side increases of 6 percent and 5 percent, respectively. Average home sale price increased 9 percent at RFG and NRT’s average home sale price, which is generally twice the national average, increased 6 percent compared with the first quarter of 2012.
“Our transaction volume, which was at the top end of the range of the guidance we provided in February, and our first quarter performance continue to support our firm belief in the strength of the housing recovery,” says Richard A. Smith, Realogy’s chairman, chief executive officer and president. “The first quarter results were particularly encouraging given the seasonally lower transaction volume typically seen in the first quarter of any year.”
In our relocation business, Cartus experienced a 10 percent increase in broker referrals and a 4 percent year-over-year decrease in initiations compared with 2012. In our title and settlement services segment, Title Resource Group (TRG) experienced a 5 percent increase in purchase title and closing units compared to the first quarter of 2012 and an 11 percent increase in refinance title and closing units.
“We expect continued growth in transaction volume, with 14 percent to 17 percent increases in the second quarter,” says Tony Hull, Realogy’s executive vice president, chief financial officer and treasurer. “On a combined basis, RFG and NRT transaction sides are anticipated to increase 7 percent to 9 percent and average sale price is expected to increase 7 percent to 8 percent year-over-year in the second quarter.”
Business Highlights
• RFG generated new franchise sales totaling $68 million in gross commission income, which was an increase of 42 percent from first quarter 2012.
• Earlier today, NRT was ranked as the No. 1 residential real estate brokerage firm in the nation by REAL Trends for the 16th consecutive year, ranking highest by sales volume and closed transaction sides. NRT’s 2012 sales volume of $128.7 billion (pro forma for acquisitions) is three times higher than the next largest brokerage.
• In late March and early April, NRT completed three accretive tuck-in acquisitions in Florida. These acquisitions enabled NRT to expand its footprint into two new markets.
• During the first quarter of 2013, Cartus signed 32 new corporate clients and expanded the scope of services provided for over 80 existing clients, the impact of which is expected to benefit future quarters.
• TRG’s title and settlement capture rates on NRT homesales improved to 41 percent in the first quarter, up from 39 percent in the first quarter of 2012. TRG’s underwriter reported a 22 percent increase in first quarter net premiums year over year, and its underwriting claims experience for the quarter was less than 1 percent, which continues to substantially outperform the industry average loss ratio.
For more information, visit www.realogy.com.
