The Agency’s half-year report to shareholders shows the company continues to grow in revenue, with Managing Director Paul Niardone confirming record quarterly revenue, positive cashflow, and a growing sales pipeline into 2021.
The news comes after shareholders overwhelmingly voted in favour of a long-term funding package involving Peters Investments and continuing support from the Macquarie Bank.
The Agency’s half-year highlights
- Unaudited EBITDA of A$1.6 million for HY21, $883k for the December quarter (excluding any Government incentives)
- Positive operational cash flow of $1.5 million for HY21
- Combined total group revenue of $29 million for HY21, up 15 per cent on the previous corresponding period ($25.2 million in HY20)
- Record quarterly combined GCI (gross commission income) of $21.5 million for December quarter, $38.1 million for HY21
- Strong growth across key operating metrics (recruitment numbers, properties sold, value of properties sold)
- Strong sales pipeline with 1209 listings for the December quarter
- Receipts from customers of $34.6 million for HY21 and $19 million for December quarter
- Cash and cash equivalents at 31 December, 2020 of $5.5 million
- Rent roll and mortgage book trail has an estimated market value of $27 million
Commenting on the results, Mr Niardone said they demonstrated the upside of the business model and highlighted what had been achieved in just over three years.
“We have achieved a positive unaudited EBITDA for the half year of $2.8 million gross of government incentives and $1.6 million net, which was driven by a record combined revenue of $29 million,” he noted.
“With prudent business continuity measures taken during the COVID-19 pandemic, our business is now benefiting significantly from an Australian housing market that has entered 2021 on a growth track.”
In addition to a positive EBITDA, The Agency also recorded positive operational cashflow of $1.54 million, while group revenue was up 15 per cent on HY20’s group revenue of $25.2 million.
Group revenue for the December quarter alone was $15.5 million, eclipsing the previous quarter’s record of $13.6 million.
GCI for HY21 was also healthy, coming in at $38.1 million.
The board explained this represented 80 per cent of what was achieved for the full 2019/20 financial year, while GCI for the December quarter was $21.5 million, up 30 per cent on the recent September quarter record of $16.6 million.
To achieve this GCI, the group facilitated 2407 property exchanges, while for the December Quarter there were 1273 exchanges – an all-time high.
The Agency sold a combined $2.2 billion worth of property in the HY21, up from $1.5 billion in HY20.
During the December quarter, $1.3 billion worth of property was sold a 31 per cent increase from $959 million in the September Quarter.
The pipeline for future sales remains strong with the combined group reporting 1209 listings for the December quarter.
Properties under management (PuM) also continues to be a source of strength for the company, with The Agency’s east coast operations reporting a total management portfolio of 3576 PuM at the end of December 2020.
At 31 December, The Agency consisted of 298 agents.
“It has been an extremely busy half year with a strong pipeline of listings into 2021 that positions us for another strong second half,” Mr Niardone said.
On January 4, shareholders also voted in favour of a long-term $11 million funding package, which is designed to strengthen the company’s financial position and balance sheet as the group continues its national growth plans.
The funding package comprises:
- $5 million in convertible notes to be issued to private investment company Peters Investments Pty Ltd
- $1 million of convertible notes previously issued to Peters Investments Pty Ltd
- An extended $5 million Macquarie Bank primary secured debt facility (down from $12.1 million)
“In addition to the strong results, we are cash flow positive and well financed, having recently received overwhelming shareholder support for a new long-term funding package with private investment company Peters Investments, while Macquarie Bank continues to be our primary debt funder for a further two years,” Mr Niardone said.
“Looking forward, the priority of the board and the company is to maintain a healthy balance sheet as well as provide and deliver essential services and support to our agents and our customers which will enable a stronger sustainable and financial position in the years ahead for our shareholders.
“With a strong balance sheet and the support of Peters Investments, along with a new refinanced debt facility, we are well placed to deliver on our growth prospects nationally in 2021 and beyond.”