Half Year Results Commentary
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MEDIA RELEASE
28 February 2019
HY2019 RESULTS
THE AGENCY MODEL CONTINUES TO GRAB MARKET SHARE
STRONG GROWTH IN REVENUE, COMMISSIONS & ALL KEY METRICS
Highlights
The Agency Group Australia (ASX:AU1) (“The Agency” or “the Company”) has recorded for the
HY2019:
✓ Net revenue from continuing operations of $10.48 million, a 50% increase on the six-month
period ending 31 December 2017 (HY2018: $6.87 million) and ~62% of FY2018’s revenue
(FY2018: $16.8 million)
✓ Total gross commission income of $7 million, a 50% increase on the six-month period ending 31
December 2017 (HY2018: $4.8 million).
✓ Statutory loss before tax down to $2.1 million (HY2018: $2.15 million loss) - includes one off
costs of $615,000
✓ Normalised loss of $1.5 million highlights reduced cash burn rate and is a further marked
improvement operationally on previous years
✓ Cash and cash equivalents balance of $1.2 million as at 31 December 2018 ($1 million as at 31
June 2018).
✓ All key metrics (recruitment numbers, properties sold, listings, properties under management,
listings and revenue) have exhibited continued growth despite soft market conditions
✓ Continued growth in revenue and key metrics across the Company is expected in the second-half
FY2019 due to the transformative acquisition of Top Level Real Estate Pty Ltd (“Top Level”) on 11
January 2019
The Agency Group Australia’s 2019 Interim Financial results highlights the company’s proven
disruptive real estate model continues to perform and gain market share.
In Western Australia, The Agency Group and SLP have witnessed a significant increase in market
share over the past few months nearing 5% market share which is ranked 4th in Western Australia.
To provide perspective on the key competitors in the region, the market leader currently holds circa
9% and the Company will continue to strive to achieve market leadership and further gain market
share within the WA market.
The Consolidated Entity continues to achieve strong revenue growth, delivering net revenue from
continuing operations of $10.48 million for the six-month period ending 31 December 2018,
representing approximately 50% increase on the six-month period ending 31 December 2017
(HY2018: $6.87 million).
Total gross commission income for the Consolidated Entity for the six-month period totalled $7
million, representing approximately a 50% increase on the six-month period ending 31 December
2017 (HY2018: $4.8 million).
While the Consolidated Entity reported a statutory loss before tax of $2.11 million (HY2018: $2.15
million loss), $615,000 in one-off costs associated with legal expenses associated with acquisitions
and corporate advisory were included in this figure. The operating loss for the 6-month period was
$1.5 million (HY2018: $2.15 million).
Taking this into account, the normalised loss of $1.5 million highlights reduced cash burn rate and is
a further marked improvement operationally on previous years.
The Company is confident its revenue and commission growth will be maintained during the second
half FY2019 and could be significantly enhanced as a result of the recent acquisition of Top Level
Real Estate Pty Ltd.
The Top Level acquisition brings the addition of a highly experienced east coast real estate sales and
project marketing team, a significant property management portfolio and an extensive sales pipe-
line to the Company.
With the addition of Top Level, The Agency has further strengthened its position as a disruptive
national real estate business having a dual offering to real estate agents, under two prominent
brands (the Agency and Sell Lease Property), providing a tailored remuneration scheme and support
structure depending on the agent’s needs and scale.
The acquisition has been transformative for the Company as the network has now expanded to
approximately 300 sales representatives across Perth, Sydney, Melbourne and the Gold Coast
(across nine offices).
The Company now has 4209 properties under management, 1394 listings and a mortgage book of
over A$1.2 billion. The company’s footprint expands to not only include Perth and Sydney residential
property markets but also offices in Melbourne and the Gold Coast with plans for offices in Canberra
and further expansion of its Western Australian operations.
Commenting on the results, The Agency Managing Director Paul Niardone said:
“Despite the challenging market conditions, we are proving our model works by achieving strong
growth in Western Australia so far in FY2019 with continuing growth anticipated across all key
metrics including properties sold, properties under management, listings and revenue.
“We are confident revenue growth will continue via organic growth which is driven by recruitment
due to the attractiveness of our model.
“When considering The Agency is still very much a business in its infancy, the growth achieved to
date represents a phenomenal achievement and a testament to our proven disruptive model and the
tireless efforts of all staff.”
Mr Niardone said further consolidation is expected in the industry in 2019,
“We believe The Agency’s disruptive model will attract further attention from those agents and
business owners wishing to change as they look for a more attractive offering and stronger brand
and business model.
“With completion of the Top Level transaction, The Agency expects a number of other reputable
businesses will look at joining the national brand.
“We will be very selective in our approach to dealing with acquisitions and will only consider those
real estate firms which are significantly value accretive to the business.”
Strong growth in WA continues
Despite what was a shrinking and difficult real estate market in WA, The Agency continued to
perform strongly during the December HY2019. The graph below highlights the continued success of
The Agency's business model (includes SLP):
1200 $400,000,000
$350,000,000
1000
$300,000,000
800
$250,000,000
600 $200,000,000
$150,000,000
400
$100,000,000
200
$50,000,000
0 $0
JUL - DEC JAN - JUNE JUL - DEC JAN - JUNE JUL - DEC JAN - JUNE JUL - DEC
2015 2016 2016 2017 2017 2018 2018
No. of Listings No. of Settlements $ value of settlements
Gross commission income for real estate sales was up to $7 million of commission income for the
HY2019 for total gross commission income of $7.5 million. This was up 50% on the previous
corresponding period.
The Agency Property Management reported 639 managements for HY2019, up from 583
managements as of 31 July 2018, and generating income of $0.67 million, up 30% on $0.54 million in
HY2018. Following the acquisition of Vicus Residential post end of period, the number of
managements has increased to 828 managements.
Mortgage and Financial Solutions Australia posted income of $1.5 million for HY2019, up 15% from
$1.3 million for HY2018. Landmark Settlements posted income of $0.48 million for the HY2019, up
30% from $0.38 million for HY2018.
The Agency East Coast – brings significant addition to the Company sales pipeline and property
management portfolio for second-half FY2019
In the six months to 31st December 2018, The Agency East Coast recorded 402 residential sales (with
a combined value of ~ A$805m), built a property management portfolio in excess of 3,300
properties, recruited a team of approximately 117 sales agents and established offices positioned in
blue chip locations across the eastern suburbs, inner west and lower north shore of Sydney.
The Agency East Coast achieved a strong market share in an area that is in high demand and is
regarded as the premium real estate area in the country.
If you require further information, please contact:
Investors
The Agency Australia Ltd
Paul Niardone
T: +61 08 9204 7955
Media
Chapter One Advisors
David Tasker / Colin Jacoby
T: +61 433 112 936 / +61 439 980 359