McGrath Limited has announced the appointment of a new Chief Financial Officer as the company faces further losses in the final quarter of FY2019 if weak market trends continue.
The company expects a full year EBITDA loss of up to $6.5 million for the year ended June, 2019, following on from an EBITDA loss of $4.5 million for the eight months to 28 February, 2019.
McGrath cited subdued property market expectations, lower levels of listing volumes and average sale prices, along with the negative influences of the NSW and Federal elections, as key factors.
McGrath CEO Geoff Lucas said while the conditions were challenging, they were still positive the market would pick up in the next financial year.
“We are seeing significantly increased buyer engagement at auctions, both from owner-occupiers and investors, buoyed by the recent interest rate cut by the RBA – the first since August 2016 – and APRA’s decision to lower the mortgage assessment criteria for new loan serviceability,” Mr Lucas said.
“There is certainly more activity in the housing sector and we expect more favourable conditions will flow through to an improved performance in the next financial year.”
On the same day as the ASX announcement, Mr Lucas also revealed Howard Herman had been appointed as McGrath’s Chief Financial Officer.
Mr Herman has more than 25 years of commercial experience, most recently as CFO of global apparel business Naked Brand Group, and has held financial roles in the property sector with Bovis Lend Lease in Sydney and Anglo American Properties in Johannesburg, South Africa.
Mr Lucas said Mr Herman’s proven track record in corporate transformations, mergers and acquisitions will be a valuable addition to the McGrath team.
Mr Herman’s appointment is effective 24 June.
McGrath will announce its full year FY2019 results on 26 August, when the company will also release its audited financial statements and a comprehensive review of its performance for the year.