Cartus Relocation saw a fall in revenue caused by a drop in international moving volumes and lower referral revenues for quarter two of 2019 (ending 30 June).
Initiations at the company – one of the world’s largest relocation services providers – fell by five per cent and referrals by six per cent, according to half-year figures from parent company Realogy, released at the beginning of August. Total revenue for the quarter fell by US$8m to $97m for the same period last year. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) dropped $7m on last year to $27m.
In the first six months of 2019, Cartus’ revenue fell by six per cent to $173m and operating EBITDA fell 12 per cent to $29m on the same period last year. Initiations fell two per cent on 2018, to $89,070, while referrals fell five per cent from $39,020 to $41,088.
Cartus is regarded as a useful barometer of the state of the moving and relocation industry market. The company has recently undergone cost cutting in its business, with Realogy results reporting $9m restructuring costs in the first half of 2018 and $4m this year.
Realogy itself reported net revenue of $1.7bn for the quarter, a fall of five per cent on the same period last year, and operating EBITDA of $245m.
Shares in Realogy fell by almost 22 per cent in August when the company announced changes to a military referral programme, ending its relationship with the United States Automobile Association, to offer mortgages and insurance to military personnel and veterans. Under the scheme, enrolled members received brokerage services through Cartus.
According to Realogy, the end of the programme will have a noticeable impact on income generated by Cartus; however, the company is planning to introduce a new scheme for military personnel, that will offer similar benefits.
There was more positive news from Realogy in early August, when Amazon announced a partnership with Cartus to help it promote its Home Services business. The link allows people looking for a house to use Amazon to connect with a Realogy estate agent. When they buy a house, customers receive benefits of up to US$5,000, including smart home devices, and cleaning, painting and furniture assembly services.
Amazon TurnKey is launching with 3,000 US estate agents. It gives Realogy an entry into the ‘disruptor’ real estate market, currently served by new business such as Zillow and Redfin.