McGrath Limited has announced a significant turnaround in fortunes this past financial year.
The company posted underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $3.7 million, excluding $2.2 million worth of government COVID-related grants, for the year to 30 June 2020.
This is compared with a loss of $6.4 million in the previous year, and amounts to a $10 million EBITDA turnaround for the company.
The group posted an 11 per cent lift in revenue to $91.69 million for the year and a 31 per cent rise in sales per agent for the period, despite the negative effects of the COVID pandemic on the residential property
sector in the last quarter.
“We are pleased with the $10 million turnaround, a return to after-tax profit and further strengthening of our balance sheet with $17.3 million in cash,” the report states.
“Our business performed significantly better than the market during the year and we have a strong platform on which to build in 2021, notwithstanding the ongoing impacts of COVID.
“Having implemented salary reductions of 30 per cent to 40 per cent for
a three-month period and successfully navigating the COVID crisis to-date, we are pleased today to confirm to our team that we will repay these reductions to those who were affected, forthwith.”
McGrath closed off the financial year with no debt, $17.3 million in cash, and $30.2 million in net assets.
The company notes that its rent roll has a market value estimated to be worth $52.2 million, of which $38.5 million is not reflected on the balance sheet.
Given the uncertain economic environment and conserving cash for business reinvestment, the board has decided not to pay an FY20 dividend.
McGrath’s dividend policy will be reinstated as soon as it is deemed
prudent.
