The McGrath Group has released a trading update, indicating the group expects to enjoy net earnings of between $10 million and $11 million for the first half of the 2022 financial year.
This projected underlying EBITDA (earnings before interest, taxation, depreciation and amortisation) represents an increase of around 60 per cent compared with the first half of the year prior, and comes despite lockdowns affecting much of the group’s eastern market.
However, despite McGrath’s increased projected EBITDA, the Group stated its Net Profit After Tax for the first half of the 2022 financial year is likely to be less than the corresponding period in 2021.
“The prior period included one-off abnormal items of at least $4 million, which contributed to reported NPAT in that period,” the Group’s statement to the ASX noted.
“These results for the first half of FY22 will be announced to the market on 21 February, 2022.”
Commenting on the trading update, McGrath Chief Executive Officer, Eddie Law said the Group had successfully utilised the lockdown period to innovate key processes, drawing on advanced technology and digital solutions to continue business operations.
“These solutions include live streamed auctions and virtual property inspections,” Mr Law said.
“Ultimately, our goal through all of this has been to keep our people and communities safe and it has been inspiring to see how well our network and our clients adapted to the online environment throughout the lockdowns.”
Stating the fundamentals of the property market remained strong, Mr Law said he anticipated property supply would increase in the coming months, but buyer demand may become constrained by affordability.
He tipped this would moderate some of the price gains seen recently, but noted the McGrath Group was in a strong position moving forward.
The meeting saw director John McGrath resoundingly re-elected to the board along with fellow directors Andrew Robinson and Wayne Mo.
Looking to the future, Mr Law told shareholders he saw a number of primary areas where the business could deliver shareholder growth going forward.
- Strategies to improve agent productivity, attraction and retention
- A focus on digital service initiatives and leveraging data
- Revitalising property management by focusing on the overall customer experience
- A projects division to increase McGrath’s relevance to developers and provide a more holistic solution encompassing capital, agency and management.
- Offering home loans beyond McGrath through the Oxygen home loans business
- Industry consolidation opportunities