The Agency sold more homes in the 2023 financial year despite national market transactions dropping more than 20 per cent, according to the group’s newly released financial and operational update.
Figures for the 2022-2023 year reveal The Agency sold 5734 homes, up 0.4 per cent on 2021-2022’s 5709.
The growth was achieved in a national market where transactions dropped 20.3 per cent and resulted in a boost in national market share to 1.23 per cent of all properties sold across Australia.
This is up from 0.98 per cent national market share the previous year, which is a 25 basis point rise.
“We continue to build our business for scale and the management team continue to take a long-term view ensuring the business can continue to deliver robust, scalable and profitable growth as the business continues to win further market share in what is a highly fragmented market,” The Agency Managing Director and Chief Executive Officer Geoff Lucas said.
Revenue also increased for the group in the 2022-2023 financial year, up six per cent to $76.93 million.
This was driven by a strong performance by payroll agents in Western Australia and increased management fees from national properties under management.
One downside was an underlying EBITDA loss of $1.3 million but Mr Lucas said investment initiatives, with long-term growth prospects, were behind these figures.
Such investments include a new strategic alliance with MDC Trilogy Group, which proves an opportunity for principals to sell their business, including rent roll assets, and join The Agency as sales agents.
MDC Trilogy have purchased almost $20 million in rent roll assets in NSW and Queensland since the alliance and they comprise more than 3000 properties that are now managed by The Agency.
The agency also acquired Bushby Property Group in Tasmania.
At June 30, 2023 The Agency’s cash and cash equivalents was $4.63 million and the group has 5,018 properties under management, which collected more than $135 million in rent for landlords.
The property management and mortgage book has a combined value of $27.9 million and underpins estimated net assets for The Agency shareholders of $29.2 million.
“The investments undertaken in FY23, which have contributed to an EBITDA loss, will generate returns for many years to come,” Mr Lucas said.
“The second half of FY23 saw a return to sales commissions growth and improved operational performance from the 1H growth initiatives underpinned a reduction in the second half of FY23 operating expenses.
“The second half FY23 cost of doing business materially reduced to 32.6 per cent of revenue from 35.9 per cent in the first half.
“As a result, second half EBITDA loss reduced significantly from $950,000 EBITDA loss in the first half, to $350,000 EBITDA loss in the second half.”
Mr Lucas said agents and principals continued to be attracted to The Agency’s business model and across FY23 the group had entered new markets in Launceston, in Tasmania, and Rockhampton, in Queensland.
“Across FY24, The Agency will continue to focus on further market share growth, across both existing geographical areas and additional regions across Australia,” he said.
“The Queensland and Victorian states represent nearly 50 per cent of Australian annual sales transaction volumes, and following the January 2023 commencement of Queensland and Victoria/Tasmania state general managers, additional focus on these states is expected to assist in continued national market share growth in FY24.”