Thanks, Christian. Morning, everyone, and welcome to the call this morning. So this morning, in keeping with tradition, what we'll try and do is we'll try and get through the presentation in about thirty minutes, and then we'll allow another thirty minutes for Q&A. In the room with me today, I've got Ajay Bhatia, so Ajay's the MD for Australia, Paul Barlow, who's the MD for International, Will Elliott, who's our new Chief Financial Officer, Kellie Cordner, who's our Chief Marketing Officer, and S.B. Kim, who's the Chief Executive Officer of Encar in South Korea. I'll call out the slide numbers as we sort of go through it.
If you turn to Slide four, which is just the highlight slide, and I guess from my point of view, the result really does continue to demonstrate the market leadership and the strategy that we've been executing over the many years now to build the diversified business that we've got. Revenue up 5%, EBITDA up 6%, and NPAT up 7%. Domestically, you know, it has been a tougher automotive market with softer new Cars ales, but what we've really seen is continued resilience in the used car market and improvement in our key operational metrics over the past six months, which has been pleasing.
Internationally and looking at what's been going on over there, we are continuing to see the long-term investments that we're making in these markets through product and through innovation really continue to come through in a meaningful way with Korea and Brazil, in particular, the standouts, and they've obviously once again delivered strong half one performance outcomes for us. Just looking at Slide five and some of the key operational highlights, and what you see there is we continue to demonstrate the strength and the capability that we've been building as a business in terms of how we're serving our customers and consumers around the world these days.
Many of the metrics on here, I won't go through, 'cause most of you have seen them before, and you're familiar with them. One of the ones that we added this time around, which I'd like to call out a little bit, is just what we've been seeing with our Virtual Member Garage here in Australia, which is now up to around four hundred and twenty thousand cars in this Virtual Member Garage, and it's up 36% year-on-year. The growth that we've been seeing there really reflects the trust and the value that we deliver to our members outside just the buy-sell cycle.
And as we get through the presentation, I'll talk to you a little bit more about some of the things that we're doing in that space that really have really been a great catalyst for the step up in engagement that we're seeing in our virtual garage. On to Slide six, and as I mentioned, first half results were, you know, we really continue to demonstrate the strength of our market leadership and the diversified business model that we have. And while the portfolio of international businesses that we've been really nurturing now for a number of years are really continuing to build scale and size, obviously, as we continue to invest in those.
And all that combined with the strong cash flow and balance sheet positions that maybe some of you already seen as you've gone through the deck really do set us up for long-term continued shareholder value creation. So looking at just some of the group performance numbers and a little bit of explanation around that. So if you go to Slide eight it has the three charts, and you know sort of speaking about long-term shareholder value creation, if you look at those three charts you can really see from those that we've continued to deliver once again on sustained growth around revenue, EBITDA and NPAT.
Slide nine, and this is looking at look-through revenue and EBITDA, which from my perspective it really better reflects our true performance as a business because it's picking up Brazil, and that's obviously becoming a bigger part of the overall business that we have. But as this slide demonstrates, our strategy of diversification, our business model across those high-growth international markets that we've been focusing on is really continuing to perform well for us. And really pleased to see the significant contribution from that those investments are now making to the group as a whole, and now contributing around 23% of look-through revenue and 18% of look-through EBITDA is coming from those international investments.
Onto Slide ten, and look, I won't go through talk about revenue on this table, 'cause we'll dive into that in a little bit more detail in a minute. But just looking at the EBITDA performance by segment, as you can see there, the online advertising segment was up 4% on PCP, and that was achieved predominantly through what we saw in growth in terms of private seller and dealer growth, as well as you know, the continued focus that we have as a business and always have had as a business on our cost management. Data research and services EBITDA performance on PCP that largely reflected the exodus from less than profitable business or product that we had.
We talked about that in August last year, that are still cycling out, and obviously, that part of the business continued to focus on cost as well. Very pleased with the continued growth that we're seeing in our international earnings, as I mentioned, up 24% on PCP on a look-through basis. But the standout there is Asia, which is largely driven by Korea. Up 16%, but we also had good performances in the other parts of our Asian portfolio as well, which is largely RedBook. And then if you look at Latin America, so yeah, we've continued to invest in Mexico, Argentina, and Chile. The market's been quite disruptive, particularly over the last six months, in the Chilean and Argentinian markets.
But we'll talk a little bit more about that as we go through the slide deck, too. Onto Slide 11, and just looking at our margins. So, overall, our EBITDA margins expanded for the first time in a number of years, which was pleasing to see. If you look at the domestic core business, that grew by 1.1% or added 1.1% to our margin. And that was really as a result of the cost discipline that we've had in the business, exiting those low-margin products that we've talked about, growing our high-margin products, where we can, where appropriate, exercising the operating leverage that we have, and navigating all that through the tougher display market conditions that we've seen.
In the other domestic investments, that's RedBook Inspect and Tyre sales, and overall, we saw a margin reduction impact of 1% there. Korea, our margins improved by 0.2%, despite the ongoing investment that we're making in our branch operations. And again, that was off the back of good cost discipline, impact of the price rise in our Guaranteed Inspection product that you're aware of last August. And yeah, some great growth that we're seeing in display advertising, too. So pleased to see that.
Then in Latin America, our Latin America margins improved on PCP, and that was as a result, largely of us, you know, watching our investment, particularly in Argentina, given the challenging environment that we've got there, and making sure we're not overinvesting in a weaker part of the cycle. Onto Slide 12, which is looking at our adjusted NPAT, and we'll look at just looking at the movements below EBITDA, probably the place to concentrate. D&A, depreciation and amortization, increased by 22% on PCP or AUD 2.4 million, and that really reflects the ongoing investment that we're making in the globalizing of the company and supporting the generating of all the high-growth initiatives that we've seen domestically, too.
Net net finance costs are actually down 9%, and that obviously ties into the deleveraging that some of you might have seen as we go through the pack. So obviously, reduction of debt and improvement in working capital, which has been helpful. Profit from associates was up 54%, and that really reflects the incredible growth that we're continuing to see out of our Brazilian investment in Webmotors. And probably the final point to note there is that the board's declared an interim dividend of AUD 0.22, which is a 7% increase on PCP and represents an 85% payout ratio this time around.
So slightly higher payout ratio, but really reflects the positive outlook that we've got, and it's underpinned by the strong cash flows that we're generating at the moment, and cash conversion, which I'll talk about now. So onto Slide 13, and talking about cash flow and balance sheet, you can see there, really pleasing to see the cash flow and cash conversion, you know, very strong, and that's largely a reflection of improvements in working capital over the past six months, and the growth in earnings. Our leverage has continued to come down, and we're now prudently below two times, at 1.7 times, debt to annualized EBITDA.
In the middle of the slide there, you can see CapEx was up on PCP by 22%, and that represents, obviously, the investment in the technology platforms that we're making to support our international markets and the expansion in our domestic product investment. If you back out, some of you might have been to the Cremorne office and seen the renovation work that we've been doing there. If you back out the refit of that business or the office there, you can see that net CapEx is up 5%, and the investment that we're making in our office is really to ensure that as a business, we're providing our employees with the best value proposition that we can.
Over to Carsales Australia, and let's drill into some of those revenue lines. So on Slide 15, just looking at dealer, so dealer revenue was up 6% to AUD 79.4 million, which was a solid performance, given the tougher new car market conditions. But as we've mentioned before, the resilient used car markets continued. And yeah, we've seen that flow through in terms of traffic. Our unique audience was up 7% on PCP, and that also flowed through to lead volumes.
So if you think about the 6% growth that we saw across the board, and you think about where that growth came from, yeah, about 3% of that 6% growth came from volume growth in leads, which is great. And the other 3% of the 6% came from the price rises that we did, particularly in March last year, and in some other minor price rises that we've done over the past six months. I'd also you know, despite the great growth that we've seen in used car lead volumes, we did see some offset with some you know, the new car market. Finance conditions were obviously tougher.
That doesn't flow through to here, but you know, what we've seen is a dealer discretionary spend has been a little bit more challenging over the past six months as dealers you know maintain their profitability in the tighter market conditions, and that did flow through to our Depth product. But pleased to see towards the back end of the year that improved, and also pleased to see that our Depth automation product continue to grow in terms of numbers of dealers that are using that.
One of the things that we did do over the course of the last six months to try and support the industry with new car sales, and you can see on the right-hand side of that slide, we did invest in a new car sales campaign called Epic in November. That was really to drive consumer interest in purchasing new car vehicles, particularly leading into December, where dealers like to try and de-stock. We've seen that sort of campaign work really, really well in Brazil, and our Webmotors business runs these sorts of campaigns regularly.
So we think, you know, it's probably a good example of IP actually flowing back to Carsales Australia from some of our international investments, which is good. And we're pleased with how the campaign ran as a first trial of it. The other thing I'd probably say is just in relation to, you know, the bushfires over the past couple of months. We have been supportive of our customers in those bushfire-affected regions to help them get back on their feet.
And the other thing I'd probably say, as well, is with our, the strength in our Instant Offer product, we've been really conscious of trying to get new car used car stock into the hands, back into the hands of our dealers, and we've seen some great success in that over the past six to 12 months, too. So it's good. On to Slide 16, and just looking at private seller. So private seller was up 7% to AUD 44.3 million. Just looking at where that growth came from, our core paid private advertising product was up slightly on PCP. We saw premium advertising services like our instant offer product continue to grow really strongly. Tyresales was actually down again, and that reflected the strength of the current used car market.
It's, you know, it's why another reason why customers value the services that we deliver to them. Tyresales was up double digit as well in what's been a more challenging market for tires and the rebranded website that we launched is performing well, and we're continuing to invest in price and retaining our competitive position in that market. Display. The market for display overall continues to remain challenging, and that's almost entirely the result of the new car market conditions being challenging.
We did continue to see improvement in performance run rates, and we have released successful new product over the course of the last six months, and continue to evolve the way that we're actually going to market there. We also think we've outperformed the broader market in display advertising, and I think as a business, we're really quite set up quite well for when that market actually starts to recover. Onto slide 18, and looking at our data and services business, and the reported data services number was flat there, but that was largely reflecting the exit of those unprofitable products that we've talked about in August last year.
We did continue to see some good demand in some of our proprietary data and research products, so we saw really good growth in our vehicle appraisals product, as dealers sort of looked to build their used car inventory supply, and Red Book continued to grow quite solidly on a consistent basis throughout the half as well, so the underlying growth in our data business was around 5% for the half. Just on to international and slide 20, and I guess what I'd say is the overall comment on international would be that we're really starting to see a pretty meaningful contribution from our two biggest international investments or businesses in Korea and Brazil.
And the strong revenue and earnings growth there over the past several years is actually a credit to them. Just looking at Korea first, and very pleased to see the performance of the Encar business over the past six months, in what's also been a quite challenging macroeconomic environment in Korea as well with the new car market and some of the issues around trade that they've dealt with. But the strong growth in the popularity of our premium products there, such as Guaranteed Inspection for dealers, combined with opening several new branches over the past 12 months, is playing a really important role in the organic growth that SB and the team are delivering there.
We also did that 10% price rise that I mentioned in August last year, which was also supportive as well. The other things to sort of talk about in Korea is some of the longer-term product that we see has some incredible upside over the years to come, which is more in that premium space. Particularly, you know, products like the home delivery type services, which really cater to customer and dealer convenience. We also, with display, we saw a more targeted sales approach for key OEM finance and insurance clients. And we saw really good growth there.
The native product that the team have built and mobile advertising product have all supported really quite strong growth in display over the past six months, which has been excellent to see. And operationally, the other thing I was pleased to see was all of our operational metrics that you'd expect to see, including inventory, all up nicely, December- on- December. Onto Slide 21 and looking at Brazil, and it's been now actually close to seven years since we invested in Brazil. And I guess the pleasing thing for me is just to see how that long-term investment in Webmotors and the patience that we showed in those first several years is really starting to play out now.
Probably, the key highlights there are the 21% growth in dealer revenue as a result of increasing dealer numbers and subscriptions and improved yield on a per-dealership basis. The new Cockpit platform for dealers is continuing to perform very well and has been a key driver in growth in that area. We saw some significant growth, and you'll see that in a later slide as well, in finance and insurance, that part of the business. That's as a result of the integration work that we've now done back with Santander to integrate seamlessly credit assessments, including approval through Cockpit. Now that makes up about 15% of our overall revenue in Webmotors.
Saw good operating leverage, so EBITDA margins expanded from 42% to 44%, which was excellent. All the key operating metrics are double digit on PCP. The other thing I'd probably call out is, you know, over the next six to 12 months, we are gonna push harder into some of the regional markets in Brazil, because we think there's significant opportunity there for us. So that's gonna take a little bit of additional investment in marketing, but what we'll see is good response in revenue pretty early on. I think we all anticipate. Onto slide 22, and just looking at the rest of Latin America.
Yeah, I mean, these are all pretty small businesses by comparison to Korea and Brazil, but there's good upside potential from these businesses in the longer term. And we'll continue to pace our investment in each of them over the short term to ensure that we're not burning a hole in our pocket. And we'll ensure that they give us all a good option for growth into the future, just like Brazil's done. The additional comments I'll probably make just around Argentina. You'll all be aware, tougher macro environment there. And we're obviously conscious of not overinvesting in that market at the moment.
Chile, yeah, we're doing really well up until the riots of sort of November, late November into December. And that had a negative impact on performance. But looking into H2, we're feeling pretty confident that things will get much better there. And Mexico was probably the other one that was a real standout for us and performed well across all the key operating metrics, customers, visits, leads, et cetera. Good growth in terms of revenue, off a much lower base, obviously, but 44% revenue growth was excellent to see there, too. Onto slide 24, and just a bit of a strategy update.
And so, we talked about this at the August presentation. As a business, we are focused on our key strategic priorities, being our digital marketplaces, those value-added services, and we're exploring new opportunities to position the company into the future as market trends and consumer preferences sort of change and evolve. Other thing to probably say is, as a business, you know, we do have a culture of backing ourselves and taking calculated bets where they make sense to us, and we're not afraid to make change where we think we need to make change across our strategic priorities and or enablers.
Probably the other thing to call out before I move on is, you know, speaking of change, we did make a change in org structure late last year, which saw AJ step up into the role of MD of Australia, and PB is obviously maintaining his role in international, too, just talking about people. Onto slide 25, and again, we talked about this at the August presentation. You know, where are our key strategic objectives and what are our key focus areas by segment over the coming twelve months?
I don't want to go through each and every one of those focus areas and give you an update, but I thought what I'd do is just call out on three of them in the subsequent slides. So maybe if you just move to slide 26 and talk about, let's talk about dealer finance product. So traditionally, as a business, we've only really integrated finance advertising on private seller cars. You'd all know. And you know, mainly focused on cars above AUD 20,000, and Stratton's been the key integrator that we've integrated with. But the thing we're conscious of is, you know, as consumers evolve, their thinking when it comes to buying cars...
away from just the sticker price to more a cost per week or a cost per month. We think it's important that dealers get the opportunity to present their individual finance offers on the vehicle listings that they're selling and enable them to effectively do things like differentiating their cars from competitor cars around them. So one of the things that we've done is we've launched an integrated finance offering, which effectively connects the dealer's financial service provider through to AutoGate to allow the dealer to apply their finance offering to each of their stock items if they choose. Obviously, the objective there with this product, as I mentioned, is to enable dealers to differentiate their cars.
But the other thing it does is it helps dealers improve the qualification of a customer when it comes to finance, which should hopefully improve the conversion of those finance or improve the conversion of sales of finance through dealerships and increase their conversion rates. The other thing to say is that we know this product works well. We know it works well because we see it working well in Brazil and we see it working well in other markets around the world, and we think it's got great potential here for our customers and for ourselves.
Onto Slide 27, and this sort of connects to the earlier comment that I made earlier around the growth that we've seen in the past six months with our Australian members and their virtual cars going into Garage, and we're probably now pushing closer to that 500,000 milestone in terms of cars in that virtual garage. I guess the value proposition of this sort of product is for members to provide them with more contextually relevant information and offers when they're outside the buy-sell cycle. And things like not just fuel and the fuel offer is excellent and we're very pleased with how that's going in partnership with our friends from Viva and Shell.
But the other opportunities around, you know, helping consumers and customers and members sort of maintain vehicle valuation updates and understand what new product releases are coming and when they're coming. You know, things like discounted tire offerings are also helpful, as well. So, we're encouraged by how this is heading for us. But I guess the other piece of the value proposition, which is more for us, is it helps in and for ourselves in terms of developing a deeper relationship with our members, particularly when they're out of the cycle and understanding what their needs are.
Onto Slide 28, and most of you on the call are gonna be familiar with Instant Offer, so I'm not gonna talk the mechanics of the product. But yeah, very pleased to see the product that we've got evolve as it has. And you know, we've continued to increase our coverage of dealer buyers in parts of the country to cater for the growth that we've been seeing here in this product. The other thing to say is, as much as Instant Offer helps private sellers get out of their cars in a really expedient fashion, it's also plays a really important part in helping our dealers stock up on used cars, which is an important part of the market, as I mentioned, and you know, helping dealers get stock.
And that's one of the biggest challenges that they have at the moment is finding good quality used car stock. So this product's helping us on a number of different fronts. And the growth there, as you can see, has been excellent. In terms of international, on Slide 29, again, similar to our domestic, we outlined what the key strategic objectives are and the FY 20 focus areas are. So I'll just call out a couple of those on Slide 30, and no doubt we'll talk a bit about this, having S.B. on the roadshow with us over the next couple of days.
But as we spoke about the Guaranteed Inspection product in South Korea, and its importance to the Encar business is fantastic, as consumers really look to increase their trust in the vehicles that they're purchasing and attain peace of mind, while dealers are looking to maintain margin and sell vehicles at a much faster rate. It's serving a dual purpose there. So we'll focus, I'm sure, no doubt, over the next couple of days on that a little bit more.
But and then on Slide 31, just looking at Webmotors and the finance product there, as we sort of talked about earlier, the growth that we're seeing here has been excellent, as we've got that integration with Cockpit going and connecting that to dealers. So see a lot more opportunity there, but the application process for finance is quite seamless in Brazil, and it's less complicated, the pre-approval process is less complicated than it is here in Australia. But the principles are all very much the same, and looking forward to seeing how that product evolves over time. Onto the outlook statement, and you know, I'm not gonna read that. You guys can all read that yourselves.
But, yeah, the guidance is consistent with the guidance that we had at the AGM in October, and January's been a good start to the year. So I'll leave that to you guys to read. And that's it. So, two minutes over the half an hour. But, Christian, if we can open up the call to questions, that'd be fantastic.
Certainly. Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question today, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request at any time, please press the pound or hash key. Your first question today comes from the line of Kane Hannan from Goldman Sachs. Please go ahead.
Morning, guys. Just three from me, please. Firstly, display. Can you give us a bit more detail around how that business has been trading since the AGM, and whether you think you need to have new car volumes grow again before that you can stabilize the revenues there? Secondly, on dealer, given the price rises that went through the improving exit run rate in your depth products, should we be expecting the second half growth rates to accelerate from here, or are we expecting a bit of a slowdown in the volume growth? And then finally, the instant offers product. I think you've previously spoken to a target of reaching about 10% penetration there. Comment on how we should be thinking about the timing of this rollout, and if you were to hit that 10% number, what sort of financial impact that could have? Cheers.
Yeah, you want to do display?
Yes, I'll do display. So on display, this is AJ, here, by the way. On display has been sort of solid as you can see. The market last half was sort of negative 16%, if you look at the SMI data. So the team have done a great job to get us to where they've got us with display with a really challenging new car market. We continue to sort of have a solid performance in display in relative terms. We're also starting to think about how we close the gap through a combination of our strategies around product, continuing to build great video product. We've had some really good take-up of our video product.
Combination of native and programmatic is going really well for us, too. And on top of that, we're starting to now think about not just the automotive market, but with... You know, it, it's much like when, when you're flying and you see an ad for Rolex. Rolex has nothing to do with travel, but you see an ad for Rolex in the Qantas magazine. Similar to that, we're starting to think about how do we sell our audience to related parties such as travel, such as luxury goods, et cetera. And we're starting to get some good traction. We just signed some money with Tourism Victoria, for example, with some money with Qantas. It, it's the sort of thing that we didn't think of before.
So we're thinking innovatively about how we manage those challenges, and those things are reflecting in the results.
Dealer, just on dealer, Kane, so you- we, we have done a, a price rise as you, as you saw from, January. So, yeah, and, and from the outlook statement, you know, January was, was solid, too. So theoretically, yeah, you should see, better PCP growth in H2 for dealer than you saw in H1, all, all things being- all other things being equal. And, on the 10% penetration for, for, Instant Offer, yeah, we're not, we're not there yet. We've got a fair way to go. When we get there, I'm sure that will be, I mean, that will be a, a good day.
But, I mean, it's gonna be reasonably material when we get there because just, you know, the yield on that product is much better than it is on a private ad.
We're continuing to deliver on our plans, so we're very happy with how IOA is going. You know, it's a growth area of the business, but you know, one step at a time.
Cheers, guys.
Your next question comes from the line of Ivor Ries from Morgans Financial. Please go ahead.
Yes, good morning. My question revolves around the dealer finance ads. I'm just wondering, how are you pricing that product at the moment? You know, what's the sort of the revenue potential of that line of business?
So Ivor, we're not. It's in trial at the moment, so we aren't commercializing it yet. But yeah, so we haven't landed on a final commercial model for it. Probably August will be the best time for us to talk about what the model actually looks like. But yeah, if you look at Brazil or UK Auto Trader and you look at what they're doing with their marketplaces, that's probably a fairly good lead indicator as to what you could expect to see from us. Does that make sense?
Yeah, that makes sense. And if I can just have a follow-up just on the quantum of the January price rise?
Yeah, Will, do you want to do that?
Yeah. So, the January price rise on leads was AUD 4, so that was from a starting point, lead price of AUD 50. But, across the board, we haven't increased prices on other products, so the overall yield increase would be slightly lower than that. That price rise is a little bit higher than what we've done the last couple of years, but on average, over the last sort of three years, it's pretty reflective of, you know, an average price rise of around that 4%-5% mark, sort of consistent with our track record.
Thanks, Will. Thanks very much.
Your next question comes from the line of Anshul Rajkhowa from Credit Suisse. Please go ahead.
Hi, guys. I've got a couple. The first one, just following on around the price increase, and looking at the potential yield benefit. If we look at the first half, you've spoken to a price benefit in dealer of 3%, which was a little bit lower than, I think, the increase that you put through, which was 4%. Can you talk to why that was lower? Is that because of the mix of new and used, then there was no price increase in new? And then there's a follow on. I guess, is 6%-7% a reasonable kind of price increase we should be factoring into the second half, given the increase from 50 to 54? And then the second question on display.
You, AJ, you spoke about display revenues now coming from some non-OEM customers. Can you give us an indication of what percentage of display is now coming from those customers, and where you think that can get to over time?
Yeah. So I'll. Anshul, it's Will here. I'll take the price rise on dealer. So, I think that when I was talking before, the price rise is just on lead revenue, which is probably about two-thirds of our dealer revenue, and we didn't increase prices on the other products. So that's why you would see a slightly lower overall yield increase than just the pure price rise. And yes, your thinking is correct for the second half. That would apply similarly in that the price rise is only on a portion of the revenue.
And then Encar, on display, we certainly see non-auto as a growth area, but the contribution at this stage is small because we've sort of only pivoted to that in the recent months. But you know, we've had some good success. We've signed a couple of significant numbers in the last sort of couple of months. So you know, this is absolutely gonna be part of our strategy, but it is early days at the moment.
Okay, got it. And just maybe a follow on, a follow-up question on display. I appreciate this is a bit of crystal ball gazing, but looking longer term, do you think display revenues can get to previous levels? Or do you have a feeling that we're maybe in a structurally lower spend environment for OEMs?
Look at, you know, display is certainly challenged structurally. There's no doubt about that. But, you know, just like I mentioned, getting into non-automotive revenue, you know, thinking about video model, every time we put, you know, video products out, it's 100% sell through. So there's a lot of innovation left and, yes, it's challenging circumstances, but the team thrives on that. And, you know, I'd say yes, absolutely, we should be able to get back.
Yeah, I mean, where we are too, Encar, has a lot to do with where the new car market is. I mean, and it's not just in Australia, it's globally. And you talk to anyone around the world, and they'll say to you, that, you know, manufacturers have reduced their marketing spend to cater for the lower volumes that they've been seeing. So I think, you know, when that starts to turn for us, I think that puts us in a really good position as well. So, yeah, having the product, having that we do have now, things like our visibility of our ads is, you know, above the benchmark that we wanna have.
You know, with what AJ just mentioned about some of the other markets that we're sort of looking at and, and having new car sales pick up again and OEMs come back to the table around spend, I think, you know, I think certainly can get back to those levels.
Okay, that's great. Thank you.
Your next question comes from the line of Fraser McLeish from MST Marquee. Please go ahead.
Great. Thanks, guys. Just wondering if I could get a couple more stats on South Korea. I mean, Cam, you talked about inventory growing, which is obviously good, because that had been flat for quite a while. Are you able to put a kind of percentage number on that in the, you know, in the twelve months? And also Guaranteed penetration, which I think you said on the slide, is now 20%. How much has that increased over the twelve months, just so we can get an idea of the trend growth? And then just on Australia and the dealer depth kind of having stalled, you think you're sort of at sort of full penetration of dealer depth now, or can that, you know, start to contribute to growth again? Thanks.
Yeah. So SB, do you wanna do the-
Sure. Yeah, I mean, if you look at the macroeconomics in Korea, I mean, unlike Australia, the new car sales and pre-owned vehicle, they all went down slightly about 3-4% during the last one year. Despite that, I mean, we have been maintaining our overall leasing volume. So I mean, in terms of that, I wouldn't say that, I mean, we have been growing, we have been increasing our leasing volume, but we have been maintaining. But in addition to that, our guaranteed volume has been increasing in terms of the volume, more than a two digit significantly. And if you think about our pool, I mean, the advertisement revenue of the guaranteed is almost 400 times of our generic ordinary listing.
I mean, the contribution from the guaranteed into our revenue has been significant. I think as Cameron pointed out, overall industry in Korea is quite tough as well in the new car, and the vehicle trading market it is all, but we have been fairly good in that. In addition to that, the display has been fairly good. I mean, this year might be a little bit difficult, but still has been very good.
You want to talk about depth then?
Yeah, Fraser, on depth, the challenging circumstances have been around discretionary spend, so it's sort of anything that's discretionary for dealers at the moment, they're holding back. And, you know, which is the reason you see the kind of growth rates that you see today. The positive news on depth, though, is, our exit run rate into this half was better than what it looks in the investor deck. On top of that, it is still a big opportunity for us, sort of in the medium term. As economic cycles turn, depth will absolutely go up. At the moment, lead volumes are quite resilient, and they continue to be resilient even in the second half.
That's where, you know, dealers they kind of go, "We don't need to spend the extra discretionary amount. We need to bank that." But that will absolutely change.
Great, thanks. Sorry, can I just follow up just on that Encar penetration? So 20% now, where, where was it 12 months ago, the guaranteed penetration?
It really, I mean, we have been continuing to grow roughly about 5% per year.
Okay.
5% growth.
Great. Thank you very much.
Your next question comes from the line of Paul Mason from Evans and Partners. Please go ahead.
Hey, guys. Just one for SB first. On the home delivery product, could you tell us a bit about what the relative pricing on that is, and maybe a bit about the initial penetration that you've got from that? I had a look on the website recently. It looked like it was sort of close to, like, 3% of your cars. So just interested to hear a bit more about that.
Let me explain in your question about three different elements. The first one is the home delivery itself is a very early stage. We are in a pilot stage. I mean, so we haven't been commercialized that much, but, I mean, we do have it has a very bright future in terms of... The second one is because the value proposition of the home delivery, if you think about why the guarantee has get appreciated, that is it provide the customer with a peace of mind in buying a vehicle, but at the same time, it helps the dealers to protect their margins, right? So the home delivery is kind of an extended version of these value-added services to provide the customer with not only the peace of mind, but with the very complete sense of convenience as well.
Because we just deliver the vehicle to their home with the guarantee that the vehicle is okay, right? And also at the same time, I mean, the dealers are able to charge even extra margin for that. So given that value proposition to the both parties of the transaction, we do believe it is a bright future, as well as during the pilot, we begin to see quite a good traction from the both sides as well. And also, if you think about the price or the margin that we charge from the both sides, it's a much, I wouldn't say much more, but quite a higher than we currently charge to the dealers in terms of the guaranteed product.
So, again, I mean, still, it has a lot of uncertainty in terms of the arrangement or agreement with the dealers or to make sure that the delivery service is good enough to the customers so that we can avoid some of the claim rate. But, I mean, we do believe the value proposition is solid enough to be attracted to the both sides of the transaction, so that we see the pretty bright future in the longer term.
Okay. And just could I just clarify on that? So you're not charging for it yet, it's just in sort of a pilot trial phase?
We charge. We do charge, but what I mean by that, we try to piloting or experimenting different schemes of the prices. So not only the price level, but a different way to charge it, I mean, in different dealers and different customers. So we try to find out what is the best way to commercialize in a sustainable way to be helpful to the customers and dealers, as well as to be helpful to ourselves as well.
Okay, great. Thank you, and just on Stratton, I just noted in one of your releases, it sounds like you've got an agreement in place for a sale now, and just looking through the notes in your discontinued operations, it looks like it burned a bit of cash in the period, so just two things on this. Firstly, with Stratton, right, is the agreement sort of done and dusted and there's not really any risk around that now, or is there still some settlement risk around the transaction? And second, are you expecting to have to put any more cash into Stratton before the sale closes, or is that sort of not a risk?
No. So, I don't expect any risk around. So it's contract signed, it's now just a question of completing and getting out the money. And I don't expect there to be any call or requirement for more cash into that business over the course of the next six months before we get completed. So did you want to add anything, Will, to that?
Yeah, just in terms of the results that you see, there was just an impairment charge that went through their results as well, a non-cash impairment charge. So, it hasn't burnt a lot of cash for the half. It's probably about break even, but that's why it probably looks a little bit more negative than it otherwise would.
Yeah. And on that, just as an extension, so it's about AUD 4.7 to 4.8 million-dollar impairment, I think. Does that reflect, like, where you've got an agreed sale price?
Yes. Yeah.
Yeah. Okay, great, and just a last one from me on the finance product and that slide on slide 26, the table, so should we be thinking about the opportunity as excluding the 30,000-odd private listings that Stratton is already involved in, or are you planning to monetize there as well through just separate arrangements with, like, independent finance companies now that you're separating from Stratton?
... No, so what will happen is, Stratton will become, rather than an internal customer, they'll become an external customer. So we obviously won't eliminate on consolidation their revenue going forward, it'll become external revenue post. So, that arrangement will stay in place. And incrementally to that, we'll obviously have the finance product available for dealers too. So, it'll be both. So private will stay Stratton, and dealer will be what the dealers have, and their captive or incumbent finance provider will be what we use.
Okay, cool. That's all for me. Thanks.
No worries.
Your next question comes from the line of Andrew Levy from Macquarie. Please go ahead.
Well, thanks for the question. Well done on the result. Just a few from me. I just wanted to ask on the margin profile last year. There was quite a hefty step-up in margins in the second half of last year, I think, in the domestic business from 52.5% to 77.4%, if I got the numbers flowing through okay. So just wanted to get a feel for the margin mix across the year and whether you expect a similar margin boost in the second half next year, and what the key drivers are of that gap. And the other question I had was just sort of at a high level.
We've obviously got a very depressed new car market at the moment, and there are some swings and roundabouts in your business. So I was just wondering if you could comment on how you think that might impact used car inquiry volumes if new car rebounds as well as instant offer, and obviously there's a benefit that might come through display. But just across your business, how you see, I guess, the current environment impacting a few of those core domestic drivers and what you see if that's going to recover, how you might benefit or where some of the challenges are? Thanks.
Yeah. Did you want to do the... I'll do that second bit first, or you want to do the-
I'll do the-
Okay.
Margin?
Yeah, do it.
Yeah, so I suppose the way we think about margins is more around the core margin, the core domestic margin, and then we have the domestic investments, which are Tyre sales and RedBook and spares. So, we've seen reasonable expansion in our core domestic margin across this half compared to the previous half. It's up about 1.5% to 61.5%. So, look, I think that's a combination of a few things. That's obviously continued discipline around cost management. Cam also mentioned that we exited some low-margin product in the data research and services business. We do think there's continued upside in the core margin from where we're currently at.
It won't grow rapidly, but I think there's still opportunity for leverage in that part of the business. In terms of your comment from last year, it's sort of been growing steadily, I would say, over a period of time. And then obviously it's impacted by those domestic investments. So when we scale up our investment in tire sales, can have an impact on the overall margin. But I think the comment in terms of overall margins is that we've started to grow again overall as a business, and we think there's continued upside there from where we're at.
And just.
And just-
... Can I just follow up on the 2H, 1H margin split, what the drivers are of stronger margins, typically in the second half versus the first half of the financial year? Thanks.
More revenue in the second half. So we have a slightly stronger half from a revenue perspective, and so that, given we're a high-margin business, most of that drops down to EBITDA, so that's just a function of seasonality.
Yep. And just the other question you had, Andrew, just around new car sales and what happens when new car sales turn up. I guess we won't know until we get there, but it depends on how the cycle evolves. I guess if you know consumer confidence goes up and new car sales go up, used car sales could also go up at the same time. It'll just depend on how it plays out. Either way, if the cycle changes, we'd welcome it 'cause we'd have things like Epic. It'll be better for display advertising.
I think, you know, last time we saw, you know, a cycle like this reverse was probably the GFC, and when the GFC occurred, and that came out of the negative cycle that we went through, we did see, we did see both new cars and used cars grow in terms of volume, and we saw the same thing happen in Brazil. So, it'll depend, but my guess is, it won't be negative for us either way.
That's great. Thank you.
Your next question comes from the line of Roger Samuel from Jefferies. Please go ahead.
Oh, hi, morning. I've got two question. First one, you've got pretty strong growth in private revenue. Just wondering if you're able to give us a split between auto and non-auto, and where the growth is coming from? Second question is on Korea. Do you expect to put through similar price increases this year, both on the guaranteed product as well as the basic product?
Do you want to do the private part?
Yeah, on private auto versus non-auto, if you sort of look at caravan verticals and all of those verticals, it's sort of an 85-15 rule.
... you know, and all, so the growth is probably slightly faster in non-auto than auto at the moment in private. Instant Offer is the big growth driver overall in that private line, pushing us to sort of new highs. And the other two components, which is our adjacencies are sort of growing as well. So tire sales grew by double digits last year, so that's a contributor, too.
Regarding the price rising, yeah, as you might be aware of, I mean, we just raised a 10% price rise for the guaranteed. The turnout was lower than we originally worried about that. I mean, it happened at the initial stage of the price increase, but I mean, along the two-to-three months after the price rise, I mean, the customer began to come back. As you pointed out, for the price increase for the normal product, we have been looking at closely, and we have been always considering that. But given the fact that, I mean, the stickiness from the customer to our site, the guaranteed is much more stickier than the normal product. We need to be a little more careful about that.
But I mean, definitely we will continue to look at that depending on how the market change and competitive dynamics with the other players. I mean, in terms of the price and marketing, and we have been looking at closely this year as well.
Just to follow up. Oh, just to follow up on tire sales, yeah, would you continue to manage the investments in that business, sort of, is it breakeven now? Is it making money?
You want to do that one, Pepe? Are you happy to do Tyre sales?
Yeah, yeah. So it's still around breakeven. It's just, you know, depending on how much marketing we do or how hard we push or what manufacturers can give us any deals on tires, depends on whether it makes a little bit of money or not at the moment, but from an e-commerce perspective, which is a lot different to our marketplace game, it's a volume game. We're not prepared to just throw money at it from a marketing sense to try and lift that. We want to do it as sustainably as we can, so for the foreseeable future, it's good for us. We get cross-sales. We get a little bit of depth through our membership.
You know, we're starting to get integration with tire sales leveraging from car sales. So from a whole ecosystem perspective, we think it's good at the moment. That may change, you know, but we'll continue to look at all different options from a tire sales perspective. But for the foreseeable future, it's a good part of our portfolio.
All right. Thank you.
Probably one more question, Christian.
Certainly. The final question today will come from the line of Eric Choi from UBS. Please go ahead.
Hey, guys, lucky last. Sorry, I'll try and be quick. Just another one on display. I was just wondering if we could be specific on whether the December quarter growth rate was actually better than the September quarter, and whether things like sort of native and video and your Epic sale event sort of improved that growth rate on the December quarter? Then just on Korea, I just wanted to ask about that home delivery product. I just wanted to drill into the actual pricing and the attached costs, and then how we should think about the upside for penetration. Should we be thinking of that sort of being attached to guaranteed product, therefore, penetration should be a subset of whatever that 20% grows to?
And then just finally, on dealer and data, can we just confirm that you kind of cycled out of those low-margin products in second half 2019, and therefore, when we sort of go into second half 2020, that revenue growth rate should pick back up, maybe closer towards that, that underlying 5%? Thanks.
Yeah. Do you want to do the last question first, mate?
Yeah, okay. It's Will here. I'll take the data question. Yeah, so we've predominantly cycled out of the low-margin product. It might just be for the first couple of months in the second half. So yes, we should expect to see a return to the underlying growth rates that we talked about in the pack.
Turn to Korea.
Korea, regarding the price, as I mentioned before, we have been experimenting of quite a variety of different levels of price and price schemes from even at AUD 100 to 250 to the dealers when the transition is completed, right? And also, at the same time, we try to experiment to charge the individual buyers as well. I mean, really depending on how we'll be successful going forward over the next six months or one year.
Regarding how soon it will be expanded, I mean, in terms of the volume growth, it really depending on our branch network, because it require us to be able to inspect the quality of the vehicle in order to make sure that the, the home, the car is okay, to maintain the reasonable, acceptable level of claim, I mean, when the vehicle get delivered eventually. But at the same time, and some of the competitive dynamics and dealers' acceptance on that, because eventually it may take away the customer ownership from the dealer side to us as well.
So it's difficult to gauge at this moment, but again, given that our pool is higher than the guarantee and given the value proposition and attractiveness of the marriage to the customers and dealers, we see quite a good traction during the last few months, and we will hope that it will continue to do that in the future.
Eric, on display, the two quarters were similar. Ballpark, very, very similar. You know, up until sort of maybe October, November, we're seeing probably an improved run rate, and then December fell off a little bit. But display tends to be very lumpy, and you know, January was a little bit softer, but February and March look stronger. So, you know, it overall, I'd say it's in line with what we've reported. Sort of, it's pretty consistent from a quarter-by-quarter basis.
Thanks, Tim.
Okay. Thanks everyone for joining the call today, and look forward to seeing many of you in our travels over the next three days. Thanks again. Thanks, Christian.