PHOTO: John McGrath, the Managing Director and CEO. FILE
McGrath has announced an Underlying EBITDA of $4.8 million for the first half, hitting the upper limit of the trading update range provided in November 2023—a remarkable 42% increase compared to the corresponding period last year.
During this period, the net profit after tax surged from $1.8 million to $7.5 million, marking a substantial $5.7 million rise. This increase includes proceeds from the sale of selected offices and rent rolls, alongside an appreciation in the value of the company’s investments.
John McGrath, the Managing Director and CEO, expressed satisfaction with the outcome, attributing it to the dedication of the management team, exceptional agents, and the strong brand, all contributing to the continued expansion of McGrath’s market presence.
“We are also witnessing significant progress in implementing our key strategies outlined in the previous financial year. The expansion of our franchise offices is providing a more stable income stream based on a fixed percentage of total sales commissions,” Mr. McGrath remarked.
He further highlighted the enhancements made in tools and technology to empower agents, including the launch of an agent app, an improved website, and a brand overhaul, aimed at better serving both agents and clients.
McGrath remains in a robust financial position, boasting approximately $26 million in cash (after paying $5.6 million in dividends in September 2023) and no debt.
It’s worth noting that these figures do not include the adoption of the new AASB 16 Leasing standard and gains from the sale of businesses. Additionally, the net assets, including the estimated value of property management rights, not reflected on the balance sheet, stand at 54 cents per share.
The company has declared an interim dividend of 1.5 cents per share, fully franked, along with a special dividend of the same amount, also fully franked. These dividends will be funded from the proceeds of selected office and rent roll sales and will be paid on March 12, 2024. Furthermore, the company plans to explore additional capital management opportunities as it receives further proceeds from the sale of company-owned offices and property management rent rolls.
Mr. McGrath expressed optimism about the property market’s stability and upward price trend in most areas despite economic challenges and global uncertainty. He emphasized that the company’s future growth hinges on enhanced agent productivity and the addition of more offices to the group, ultimately leading to a greater market share.
“We have witnessed promising listing volumes at the beginning of the calendar year and are well-positioned to sustain our growth momentum,” he concluded.
This announcement has been authorized for release by the McGrath Board of Directors.