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McGrath posts $6.2 million profit with 18 new offices

McGrath has posted a solid net profit after tax of $6.2 million for the 2022-2023 financial year, despite a tough property market, driven by historically low listings.

In an announcement to the ASX this morning, McGrath posted $82.5 million in revenue for the 12 months to June 30, along with $6.1 million underlying EBITDA and $4.3 million underlying EBIT.

McGrath Founder and Chief Executive Officer John McGrath said the agency posted the profit despite a tough listings climate with transactions down about 20 per cent on the same time a year ago, while also being five per cent below the 10-year market average. 

Housing prices also fell about five per cent below the same period last year.

“Some of the markets we’re represented in have had a, between 15 and 35 per cent, reduced number of listings,” he told the investor presentation this morning.

“So these have been fairly major headwinds for us, but despite those, we’re certainly happy to have announced that we’ve delivered a profit of 6.2 million and we think under those conditions, that’s a reasonable result, but (we’re) always aiming to do better for our shareholders going forward.”

Mr McGrath said the company remained in a strong financial position with about $27 million in cash and no debt, with a one per cent share, fully franked final dividend, payable on September 14.

In the 2023 financial year, the company achieved gains of about $4 million flowing from the transition of the selected company owned office and rent roll assets to franchise ownership.

These initiatives allowed McGrath to announce a special dividend of 2.5 cents per share, fully franked, also payable on 14 September 2023.

Mr McGrath said over the past 12 months, 18 new franchise offices had been brought on and the company had not deviated from its core strategy, which includes growing 115 offices over the next four years.

“We don’t see any major departure from our current strategy,” he said.

“We chose to reduce our overheads some 12 months ago, and we’ve continued to reduce our corporate overheads over the past 12 months by around an additional eight per cent.

“We want to run a lean, mean, tight business and a profitable business.

“Going forward, we continue to focus on rapid organic growth as opposed to growth by acquisition, although we’re always on the lookout for good opportunities to acquire investments that are a strategic fit to our future.

“We’ve added 18 net offices and we certainly expect that sort of trajectory to continue, if not increase over the next three to four years to reach our stated of desire of doubling our business.”

In the 2023 financial year, the number of McGrath agents increased from 584 to 657, while the number of offices now sits at 126.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.