Financial Results - Strong financial and operational growth
Download the PDFPreparing the document viewer…
Read the announcement as text
ASX ANNOUNCEMENT
30 August 2019
STRONG FINANCIAL AND OPERATIONAL GROWTH CONTINUES
The Agency Group FY2018 FY2019 % Change
Total Revenue (m) $16.8 $31.3 + 86%
No. of Agents 185 272 + 47%
Listings 2,401 3,430 + 43%
No. of Properties Sold 667 2419 + 263%
Properties Under Management 3,374 4,337 + 29%
Note: Financial figures are unaudited and take into account approx. six months of Top Level operations since formal acquisition in
January 2019
Highlights
• Group Revenue of A$31.3M, up 86% year-on-year (FY18: $16.8M)
• Strong growth across all key operating metrics (recruitment numbers, properties sold, listings, properties
under management, Gross Commission Income, etc)
• Cash receipts of $33M, up 120% year-on-year (FY18: $15M), operating cash flow positive from June
Quarter
• EBITDA loss of $4.2M (2018: $3.1M), which includes approx. $1.3M of one-off non-operational costs
• Identified and will deliver in FY20 approx. $2.8M of cost savings as successful integration of West Coast
and East Coast businesses continues. $1.3m of annualised benefits already implemented
• Cash at end of financial year $2.6M (2018: $1.02M)
• Balance sheet to be further strengthened by $5.6M capital raising and $5.8M debt to equity conversion1
• Strong performance achieved with less than 6 months of operational and financial integration with Top
Level Real Estate Pty Ltd (acquired 11 January 2019)
• Combined East and West Coast businesses expected to further drive operational growth and efficiency
savings from 2020 onwards
• Continues to attract and retain high quality agents and vendors through superior service offering and
industry leading business model
1
Refer ASX announcement dated 24 July 2019
The Agency Group Australia (ASX:AU1) (“The Agency” or “the Company”) is pleased to announce its results for the
for the 12 months ended 30 June 2019 (FY19), confirming that despite market conditions confirmed by industry
peers as some of the worst in recent times its strong operational and financial growth has continued.
Though only operating The Agency business model for less than three years, for the FY2019 the Consolidated Entity
reported Annual Group Revenue of $31.3 million, an 86% increase year-on-year (FY2018: $16.8 million) which
further highlights the effectiveness of the Company’s disruptive model. This follows 75% growth and 70% growth
during the prior two years.
The increase in revenue was primarily due to a 31% increase year-on-year in Combined Gross Commission Income
to $38 million (FY18: $29 million). This figure was bolstered by 2,419 sales (up from 667 sales for FY18) and $2.5
billion worth of property sold across the combined group for the FY2019 (FY18: $400 million).
At the completion of FY2019, the Company had 3,430 listings, up 43% on the 2,401 listings at the end of FY18.
Property management continues to grow with The Agency reporting a record total of 4,337 Properties Under
Management as at 30 June 2019, up 29% on the Prior Corresponding Period.
The Company also reported strong increase year-on-year in the number of agents recruited with a 47% increase
year-on-year to 272 agents as at 30 June 2019 (FY18: 185).
The Agency Group reported cash receipts of $33 million for the FY2019, a 120% year-on-year increase (FY18: $15
million). Importantly, 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.
Importantly, the financial results only include six months of operations from Top Level Real Estate Pty Ltd (“Top
Level”) following completion of the acquisition in mid-January 2019.
Financial performance
The Company recorded an EBITDA loss of approx. $4.2 million for FY19 (2018: $3.1 million loss), however this
included $1.3 million of one-off, non-recurring costs expensed this year, primarily associated with the Top Level
transaction (i.e. legal, accounting, professional services, corporate advisory, financing and office fit-outs, etc ).
Excluding these would have seen the Company record a normalised EBITDA loss of approx. $2.9 million, or a 10%
reduction on previous year.
Cash at end of financial year was $2.6M (2018: $1.02M).
The combined East and West Coast businesses expected to further drive operational growth and efficiency savings
from 2020 onwards.
The Agency Transformation Program - Identifying and delivering cost savings into FY20
As the Company continues to aggressively grow its brand into new markets (and expand into existing markets) it is
focussed on maintaining a sustainable financial framework and to this end continues to identify and implement
efficiencies into its business.
The integration of The Agency’s East Coast and West Coast operations, following the acquisition of Top Level in
January 2019, is continuing to deliver cost synergies as planned.
The Company has already identified and has begun implementing $2.8 million in cost savings that will be delivered
in FY20.
Strengthened Balance Sheet
In addition, the Combined Group has taken steps to strengthen its balance sheet announcing post year-end a $5.6
million capital raising and $5.8 million debt to equity conversion to be used to repay existing loans while providing
the necessary funds to accelerate The Agency’s growth plan in key real estate markets.
As part of the capital raising, The Agency has secured two new strategic investors, Magnolia Capital and Honan
Insurance Group, who understand The Agency’s business model and can see how it has successfully disrupted, and
will continue to disrupt, the Australian real estate market.
In addition, the value of the key assets (mortgage book and rent roll) that sit off balance sheet continues to rise
and is in excess of $31 million.
Commenting on the results, The Agency Managing Director Paul Niardone said:
“This has been a company-making year for The Agency in which we completed the Top Level Real Estate acquisition,
expanded into key real estate markets and recruited strongly, despite challenging wider market conditions.
“Since launching this business model less than three years ago we have achieved outstanding financial and
operating results and have attracted some of the best agents.
“The integration of Top Level into the Combined Group has been highly successful, and we are confident further
revenue growth will be achieved and cost synergies realised over the coming financial year.
“We realise the need to implement measures to control our costs in the current environment and have identified
and are already implementing these cost savings.
“Coupled with the $5.6 million capital raising and $5.8 million debt to equity conversion which will significantly
strengthen our balance sheet, and signs of green shoots in the key markets, I anticipate the company will continue
to achieve strong operational and financial growth moving forward.”
ENDS
If you require further information, please contact:
Investors Media
The Agency Australia Ltd Chapter One Advisors
Paul Niardone David Tasker / Colin Jacoby
T: +61 08 9204 7955 T: +61 433 112 936 / +61 439 980 359
E: dtasker@chapteroneadvisors.com.au