Major change is occuring at McGrath Estate Agents with its chief executive officer Cameron Judson and almost its entire board resigning after another profit warning, with founder John McGrath to take back the reins of the company as interim executive chair when the company’s interim results are released next month.
In an ASX announcement today McGrath Limited said the “half year earnings had been adversely affected by underperformance in the company owned sales division, including project marketing.”
“Based on currently available information, the board anticipates the company’s EBITDA for the half year ended 31 December to be $1.63 million before one-off items and a small loss of $50,000 post one-off items,” the statement said.
“These estimates exclude any potential goodwill impairment which may arise when the carrying value of each division is reviewed in the course of preparing the half year accounts.”
The franchise, property management and other businesses are said to be “performing largely to expectation.”
The company said, as part of a structural review, CEO Cameron Judson and head of corporate services and company secretary, Morgan Sloper, would depart after serving their notice periods.
“Cameron and Morgan were engaged when we anticipated a higher volume of corporate activity,” Chairman Cass O’Connor said.
“Their skill sets are broader than the company currently needs.”
Nigel Dews has already resigned from the board after being appointed chief executive officer of Message Media last year and as part of the review.
Ms O’Connor and non-executive directors Elizabeth Crouch and Cath Rogers also announced their intention to resign following a transition period, after which John McGrath will take the role of executive chair.
“The board is disappointed with the recent performance of the company and its share price,” Ms O’Connor said.
“The issue of historically low listing volumes finally seems to be abating, but it and other factors and their contribution to the underperformance, primarily in the company owned sales divisions, have been well publicised. The cost cuts have gone as far as they can while leaving the company with the resources to benefit from market improvement.”
Pending interim executive chairman John McGrath said he was disappointed with the company’s performance over the past two years but it was time for change.
In that time its share price has lost more than 70 per cent of its value.
At midday McGrath shares were 6.14 per cent down at 53.5 cents.
“Now is the time for a new approach,” Mr McGrath said.
“Despite the challenges we have endured since listing, McGrath remains one of the best real estate businesses in Australia with outstanding talent throughout the company. I am very excited and proud to once again be leading the team in the future.”