Appendix 4C - Quarterly and commentary
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30 April 2019
MARCH QUARTER 2019 UPDATE & APPENDIX 4C
RECORD & NEAR-RECORD RESULTS ACROSS KEY METRICS
Highlights
March Quarter 2019
Listings 1 1040
No. of Properties Sold 2 616
Value of Properties Sold (m) 2 $613.4
Properties Under Management 4324
Gross Commission Income (m) 1 $10.3
Property management revenue (m) $2.2
Ancillary Services Revenue (m) $1.1
• EDITDA positive for February and March 2019
• Integration activities of newly acquired businesses underway, identifying significant synergies
and cost reductions to be achieved by calendar year end
• Combined Gross Commission Income (GCI) of A$10.3 million, 2nd highest on record
• 277 Agents working across the group nationally
• Continued quarter on quarter growth with 1,040 new listings secured, a 14% increase, a 32%
increase in properties sold and 30% increase in value of properties sold
• Acquisition of Top Level Real Estate business;
o Supported by $8.4 million share placement
o Brings extensive industry and sales experience on east coast into the group
1
New Listing, GCI and Number of Agents for Sell Lease Property is only available from purchase. On this basis they have only been included from 31 March 2018. The Agency
prepared on the basis that the acquisition of Top Level Real Estate occurred effective 1 January 2017
2
Value and number of exchanges prepared on the basis that the acquisition of Top Level Real Estate occurred effective 1 January 2017 and Sell Lease Property had occurred
effective 1 January 2018.
o New cornerstone investors join share register, with Non-Executive Director John
Kolenda increasing interest to 16.97% interest
• Successfully acquires and integrates Vicus Residential into the business
o Adds 200 rental properties to the business
• Growing market share in key markets of WA and NSW which are now at c.5% and c.1%
respectively
The Agency Group Australia (ASX:AU1) (“The Agency” or “the Company”) has delivered another
quarter of strong results, further confirming the Company as one of Australia’s fastest growing real
estate groups.
In the period it also recorded EBITDA positive months for February and March, a significant milestone
for the Company.
For the quarter, the Company reported combined Total Revenue of $9M, an increase on the previous
corresponding period (which now includes Top Level revenues from the date of acquisition of 11
January 2019) and Gross Commission Income (GCI) of A$10.3 million, the second highest on record for
the group.
During the period, 616 properties were sold for a total value of $613.4 million across the combined
group, including a number of high-profile and well publicised sales.
Across the combined group, there were a record 1,040 new listings, 14% up on the prior quarter – the
previous record.
Property management across the group continues to grow with 4,324 properties under management
at 31 March 2019. The group continues to explore a number of opportunities to expand its property
management portfolio and leverage off its existing scale.
The total number of agents remained relatively steady, at 277.
Following its acquisition in late February 2018, management have commenced rationalising the agent
network of Sell Lease Property ahead of expanding the offering nationally. This rationalisation is
partially due to new award conditions in WA that took effect in April 2019 and are expected to
materially reduce the number of agents operating across the industry in WA. This has resulted in the
number of agents within Sell Lease Property reducing to 68 at 31 March 2019, with limited impact on
exchanges or listings.
Top Level Acquisition Settled
The Agency is witnessing significant benefits from the acquisition of high-growth east coast real estate
firm Top Level Real Estate Pty Ltd during the March Quarter.
The acquisition has been transformative for the Company as the network has now expanded to 277
sales representatives across nine offices in key markets including Perth, Sydney, Melbourne and the
Gold Coast with plans for further expansion of its Western Australian operations on the horizon.
The Company now boasts 4324 properties under management, 1040 listings and a mortgage finance
book of loans outstanding in excess of A$1.2 billion.
With completion of the Top Level acquisition, The Company expects a number of other reputable
businesses will look to join the national brand.
The Company’s approach to acquisitions will be very selective and will only consider those real estate
firms which are significantly value accretive to the business.
Capital Raising
The Company also completed the required capital raising of $8.4 million – a condition precedent to
the Top Level transaction – resulting in new cornerstone investors joining The Agency’s share register,
and Non-Executive Director John Kolenda increasing his interest to 16.97%.
The Agency also completed a 6:10 bonus issue and a consolidation of its capital on a 1:30 basis. The
capital consolidation provided the best platform for continued growth and a capital structure that was
more in line with the Company’s size and a share price level that was more attractive to institutional
investors.
Vicus Residential Acquisition Settled
During the March Quarter, The Agency settled the acquisition of Vicus Residential - the residential
sales and management division of The Vicus Property Group.
The acquisition resulted in The Agency’s WA operations adding more than 200 rental properties
predominantly in the inner city of Perth, increasing total property managements on The Agency’s
books to approximately 800 in the state.
Boost in 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 in Western Australia placing us at Number 4 in the
state. In comparison, the market leader in the state holds a market share of approximately 9%.
Quarterly Cash Flow Commentary
As highlighted in the December 2018 Quarterly
1.) the Company reported higher administration and corporate costs to incorporate the payment of
acquisition costs in respect of the Top Level acquisition; and
2.) Product and operating costs were high due to the full payment of taxation liabilities that occurred
immediately after the capital raise and acquisition of Top Level.
Interest and other costs of finance at item 1.5 and Transaction costs related to loans and borrowings
at item 3.7 are higher due to the prepayment of interest on the Macquarie Bank refinancing and bank
fees at time of settlement and refinancing approval by the bank.
Repayment of Top Level debt occurred in accordance with the acquisition terms of Top Level.
Update Market Presentation
Please refer to the separate market update presentation lodged with ASX.
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
Appendix 4C
Quarterly report for entities subject to Listing Rule 4.7B
+Rule 4.7B
Appendix 4C
Quarterly report for entities subject to Listing Rule 4.7B
Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16
Name of entity
The Agency Group Australia Limited
ABN Quarter ended (“current quarter”)
52 118 913 232 31 March 2019
Consolidated statement of cash flows Current quarter Year to date
$A’000 $A’000
1. Cash flows from operating activities
1.1 Receipts from customers 9,149 21,176
1.2 Payments for
(a) research and development - -
(b) product manufacturing and operating (7,937) (16,168)
costs
(c) advertising and marketing (329) (375)
(d) leased assets (11) (38)
(e) staff costs (3,521) (6,841)
(f) administration and corporate costs (916) (1,286)
1.3 Dividends received (see note 3) - -
1.4 Interest received 1 1
1.5 Interest and other costs of finance paid (713) (831)
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other - -
1.9 Net cash from / (used in) operating
(4,277) (4,362)
activities
+ See chapter 19 for defined terms
1 September 2016 Page 1
Appendix 4C
Quarterly report for entities subject to Listing Rule 4.7B
Consolidated statement of cash flows Current quarter Year to date
$A’000 $A’000
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment (62) (62)
(b) businesses (see item 10) - (95)
(c) investments (362) (772)
(d) intellectual property - -
(e) other non-current assets - -
2.2 Proceeds from disposal of:
(a) property, plant and equipment - -
(b) businesses (see item 10) - -
(c) investments - -
(d) intellectual property - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other – Cash acquired on acquisition of 270 270
businesses
2.6 Net cash from / (used in) investing (154) (659)
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of shares 7,900 8,400
3.2 Proceeds from issue of convertible notes - -
3.3 Proceeds from exercise of share options - -
3.4 Transaction costs related to issues of - -
shares, convertible notes or options
3.5 Proceeds from borrowings - 250
3.6 Repayment of borrowings (1,024) (1,024)
3.7 Transaction costs related to loans and (220) (235)
borrowings
3.8 Dividends paid - -
3.9 Other (Share subscriptions received in - -
advance)
3.10 Net cash from / (used in) financing
6,656 7,391
activities
+ See chapter 19 for defined terms
1 September 2016 Page 2
Appendix 4C
Quarterly report for entities subject to Listing Rule 4.7B
Consolidated statement of cash flows Current quarter Year to date
$A’000 $A’000
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of
quarter/year to date 1,167 1,022
4.2 Net cash from / (used in) operating (4,277) (4,362)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities (154) (659)
(item 2.6 above)
4.4 Net cash from / (used in) financing activities 6,656 7,391
(item 3.10 above)
4.5 Effect of movement in exchange rates on - -
cash held
4.6 Cash and cash equivalents at end of
3,392 3,392
quarter
5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $A’000 $A’000
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the
related items in the accounts
5.1 Bank balances 3,392 1,167
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other - -
5.5 Cash and cash equivalents at end of
3,392 1,167
quarter (should equal item 4.6 above)
6. Payments to directors of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to these parties included in item 1.2 328
6.2 Aggregate amount of cash flow from loans to these parties included -
in item 2.3
6.3 Include below any explanation necessary to understand the transactions included in
items 6.1 and 6.2
Director salary $142k
Director fees $186k
+ See chapter 19 for defined terms
1 September 2016 Page 3
Appendix 4C
Quarterly report for entities subject to Listing Rule 4.7B
7. Payments to related entities of the entity and their Current quarter
associates $A'000
7.1 Aggregate amount of payments to these parties included in item 1.2 -
7.2 Aggregate amount of cash flow from loans to these parties included -
in item 2.3
7.3 Include below any explanation necessary to understand the transactions included in
items 7.1 and 7.2
8. Financing facilities available Total facility amount Amount drawn at
Add notes as necessary for an at quarter end quarter end
understanding of the position $A’000 $A’000
8.1 Loan facilities $12,600 $12,600
8.2 Credit standby arrangements - -
8.3 Other (please specify) - -
8.4 Include below a description of each facility above, including the lender, interest rate and
whether it is secured or unsecured. If any additional facilities have been entered into or are
proposed to be entered into after quarter end, include details of those facilities as well.
Lender – Macquarie Bank, facility has a first security, Interest Rate 5.89%
9. Estimated cash outflows for next quarter $A’000
9.1 Research and development -
9.2 Product manufacturing and operating costs (6,000)
9.3 Advertising and marketing (300)
9.4 Leased assets (15)
9.5 Staff costs (3,000)
9.6 Administration and corporate costs (1,000)
9.7 Other (Bank Guarantee and Rental deposit) -
9.8 Total estimated cash outflows (10,315)
+ See chapter 19 for defined terms
1 September 2016 Page 4
Appendix 4C
Quarterly report for entities subject to Listing Rule 4.7B
10. Acquisitions and disposals of Acquisitions Acquisitions
business entities
(items 2.1(b) and 2.2(b) above)
10.1 Name of entity Beaufort Reality Pty Ltd Top Level Real Estate Pty
Ltd
10.2 Place of incorporation or Perth WA Sydney, NSW
registration
10.3 Consideration for acquisition or Last deferred $10,500,000
disposal consideration payment (350,000,000 Ordinary
on the acquisition that Fully Paid Shares issued
occurred and was at $0.30 per share)
reported during the Jun
Qtr. 2017
10.4 Total net assets N/A ($10,787,620)
10.5 Nature of business Real Estate services
Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which
comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Sign here: ............................................................ Date: 30 April 2019
Company Secretary
Print name: Stuart Usher
Notes
1. The quarterly report provides a basis for informing the market how the entity’s activities have been
financed for the past quarter and the effect on its cash position. An entity that wishes to disclose
additional information is encouraged to do so, in a note or notes included in or attached to this
report.
2. If this quarterly report has been prepared in accordance with Australian Accounting Standards,
the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If
this quarterly report has been prepared in accordance with other accounting standards agreed by
ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this
report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows
from investing activities, depending on the accounting policy of the entity.
+ See chapter 19 for defined terms
1 September 2016 Page 5