Appendix 4C - Quarterly and commentary
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31 July 2019
JUNE QUARTER 2019 UPDATE & APPENDIX 4C
STRONG RESULTS – ANNUAL GROUP REVENUE UP 150% Y-O-Y
Highlights
The Agency Group June Quarter 2019
No. of Agents 272
Listings 800
Gross Commission Income (m) $10
No. of Properties Sold 674
Value of Properties Sold (m) $600.8
Properties Under Mgmt. 4337
Total Revenue (m) (1) $10.8
1- All revenue figures provided in this report are unaudited.
• Positive cashflow from operating activities of $44,000
• Combined Total Group Revenue of A$10.8 million for June Quarter, consistent with March
Quarter
• Annual Group revenue has grown 150% year-on-year to $40 million (FY2018: $16.2 million)
• Cash receipts of $13.7 million for June Quarter, up 50% on March Quarter
• Combined Gross Commission Income (GCI) of A$10 million for June Quarter
Corporate (Post-quarter end)
• Funding of $5.6 million consisting of $1.1 million via Placement and $4.5 million via 4:7
Entitlement Offer and conversion of $5.8 million debt
• Funds raised to strengthen balance sheet with a further $1.7 million to repay existing loans,
$1.1 million for working capital and $2.2 million for growth and acquisition initiatives
• Sydney-based boutique investment group Magnolia Capital to become a substantial
shareholder with up to a ~18% holding
• Magnolia Capital Director Mitchell Atkins to join The Agency board as a Non-Executive
Director
• Honan Insurance Group to invest and enter into a strategic relationship with The Agency
The Agency Group Australia (ASX:AU1) (“The Agency” or “the Company”) is pleased to report June
Quarterly results, a period in which the company continued to defy the persistent real estate market
downturn.
For the quarter, the Company reported combined Total Revenue of A$10.8 million and Gross
Commission Income (GCI) of A$10 million, both results consistent with the previous quarter.
GCI was due to a record 674 exchanges and more than $600 million worth of property sold across
the combined group for the quarter.
Across the combined group, there were 800 new listings, 14% up on the prior period – the previous
record.
Property management continues to grow with The Agency reporting a record total of 4,337 PUM for
June Quarter 2019, up 29% on PCP. The group continues to explore a number of opportunities to
expand its property management portfolio and leverage off its existing scale.
The number of agents operating under the combined group remained relatively steady at 272.
Following the strategic review in April 2019, SLP delivered a strong quarterly performance with GCI
of $1.3 million on back of 138 exchanges and $65 million of property sold while the number of
agents remained at 67 agents.
During the period, The Agency also achieved a number of landmark sales including:
• April: Scott Thornton’s Cremorne conjunction sale at approximately $8 million
• May: Nic and Kingsley Yates’ Mosman sale at over $5 million
Capital Raising
Post quarter-end, the company announced a funding package that would significantly strengthen its
balance sheet having received commitments to raise ~A$1.1 million via a Placement and ~$4.5
million via a 4:7 Entitlement Offer.
The Company has also entered into agreements pursuant to which ~$5.8m in debt will be converted
into equity subject to completion of the Placement and the Entitlement Offer and receipt of prior
shareholder approval (“Debt-to-Equity Conversion”).
Funds from the transaction (including debt-to-equity conversions) will primarily be used to
strengthen the Company balance sheet with ~$5.8m in existing debt converted to equity as well as a
further ~$1.7 million applied to repayment of existing loans, with $1.1 million allocated for working
capital and $2.2 million allocated to fund further growth and acquisition initiatives.
As part of the funding, The Agency welcomed new investors who will become shareholders in The
Agency.
Sydney-based diversified financial services and property group Magnolia Capital has agreed to an
investment of:
• $600,000 through the Placement by subscription for 9.2 million shares; and
• up to $2.9 million through the issue of up to 44.6 million shares via a firm commitment to
subscribe for a proportional amount of shortfall in the Entitlement Offer.
Subject to completion of the capital raising, Magnolia Capital will hold up to approximately 53.8
million shares in The Agency Group equivalent to a 17.9% interest in the Company based on 301.4
million pro-forma shares outstanding.
Honan Insurance Group has agreed to invest $500,000 through the Placement by subscription for 7.7
million shares for a 3% interest in the holding, based on 301.6 million pro-forma shares outstanding.
Quarterly Cash Flow Commentary
The Agency Group reported cash receipts of $13.7 million for the June Quarter, a 50% increase on
the March Quarter’s cash receipts of $6.3 million.
The Agency Group reported $44,000 net cash from operating activities for the June Quarter as a
result of an increase in cash receipts for the period.
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 30 June 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 13,726 34,902
1.2 Payments for
(a) research and development - -
(b) product manufacturing and operating (7,320) (23,487)
costs
(c) advertising and marketing (151) (526)
(d) leased assets (4) (42)
(e) staff costs (3,207) (10,048)
(f) administration and corporate costs (2,513) (3,799)
1.3 Dividends received (see note 3) - -
1.4 Interest received 1 1
1.5 Interest and other costs of finance paid (488) (1,319)
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other - -
1.9 Net cash from / (used in) operating
44 (4,318)
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 (134) (196)
(b) businesses (see item 10) - (95)
(c) investments (90) (862)
(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
businesses
2.6 Net cash from / (used in) investing (224) (883)
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of shares - 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 (6) (1,030)
3.7 Transaction costs related to loans and - (235)
borrowings
3.8 Dividends paid - -
3.9 Other (Share subscriptions received in - -
advance)
3.10 Net cash from / (used in) financing
(6) 7,385
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 3,392 1,022
4.2 Net cash from / (used in) operating 44 (4,318)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities (224) (883)
(item 2.6 above)
4.4 Net cash from / (used in) financing activities (6) 7,385
(item 3.10 above)
4.5 Effect of movement in exchange rates on - -
cash held
4.6 Cash and cash equivalents at end of
3,206 3,206
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 3,206 3,392
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other - -
5.5 Cash and cash equivalents at end of
3,206 3,392
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 90
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 $90k
Director fees Nil
+ 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 (50)
9.2 Product manufacturing and operating costs (7,500)
9.3 Advertising and marketing (100)
9.4 Leased assets (6)
9.5 Staff costs (3,000)
9.6 Administration and corporate costs (2,350)
9.7 Other (Bank Guarantee and Rental deposit) -
9.8 Total estimated cash outflows (13,006)
+ 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: 31 July 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