Appendix 4E & Preliminary Final Report
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ASX Appendix 4E (rule 4.3A)
Preliminary final report for the year ended 30 June 2019
Details of the reporting period and the previous corresponding period
Reporting Period: 30 June 2019
Previous Corresponding Period: 30 June 2018
Results for announcement to the market
(All comparisons to year ended 30 June 2018)
%
$A’000 Up/Down
Movement
Revenue from ordinary activities 31,308 up 86%
Revenue from ordinary activities excluding
31,308 up 86%
interest income
Loss from ordinary activities after tax (7,726) up 102%
Loss attributable to members (7,726) up 102%
Franked amount per
Dividends Amount per share share
Interim dividend N/A N/A
Final dividend N/A N/A
Record date for determining entitlements to N/A
dividends
Brief explanation of any figures reported above necessary to enable the figures to be understood
Refer to the accompanying separate ASX lodgment Review of Financial Results and Operations
Net tangible assets backing 30 June 2019 30 June 2018
Net tangible assets/(liability) per security (30) cents (17) cents
Net asset backing per security 8.7 cents 2.12 cents
Control gained or lost over entities having material effect
Acquisition on 11 January 2019 of Top Level Pty Ltd. Refer to note 3 and 4 of the Preliminary Final
Report.
Material interest in entities which are not controlled entities
Nil
Compliance Statement
The preliminary final report has been prepared based on the 30 June 2019 accounts which are in the
process of being audited by an independent Audit Firm in accordance with the requirements of s302 of
the Corporations Act 2001.
Attachments forming part of Appendix 4E:
1. Preliminary Final Financial Report
Signed:______________________________ Date: 30 August 2019
Paul Niardone
Managing Director
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
THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
THE AGENCY GROUP AUSTRALIA LIMITED
ABN 52 118 913 232
Preliminary Final Financial Report
June 2019
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
Contents
Corporate Directory 3
Principal Activities & Review of Operations 4
Consolidated Statement of Profit or Loss
and Other Comprehensive Income 6
Consolidated Statement of Financial Position 7
Consolidated Statement of Changes in Equity 8
Consolidated Statement of Cash Flows 9
Notes to the Consolidated Financial Statements 10
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
Directors Andrew Jensen
Chairman
Paul Niardone
Executive Director
John Kolenda
Non-Executive Director
Adam Davey
Non-Executive Director
Matthew LaHood
Non-Executive Director
Company Secretary Stuart Usher
Managing Director Paul Niardone
Registered Office Suite 1, 437 Roberts Road
Subiaco WA 6008
Principal Place of Business 68 Milligan Street
Perth WA 6000
Solicitors Steinepreis Paganin
Level 4, Next Building
16 Milligan St
Perth WA 6000
Mills Oakley
Level 2, 225 St. Georges Terrace
Perth WA 6000
Share Registry Advanced Share Registry Services
110 Stirling Hwy
Nedlands WA 6009
Auditors Bentleys Audit & Corporate (WA) Pty Ltd
PO Box 7775
Cloisters Square
Perth WA 6850
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
Principal Activities
The principal activity of the Consolidated Entity for the financial year was real estate and related activities.
There were no significant changes in the nature of the Consolidated Entity’s principal activities during the
financial year.
Operating Results and Financial Position
Combined revenues increase significantly, to be underpinned in future by annuity income
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-operational costs expensed during the 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 with only six months of revenue contribution from Top Level.
Cash at end of financial year was $2.6M (2018: $1.02M).
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
The combined East and West Coast businesses are 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.
There remain significant intangible assets off the balance sheet, these include the rent roll and the
Mortgage Book, both of which have grown from the previous year. These assets also now contribute an
annuity income to the business in excess of $3 million per annum.
Total market asset value of rent roll and loan book is in excess of $31m.
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
June June
Note 2019 2018
$ $
Revenue from continuing operations 2 31,308,279 16,823,018
Less Expenses
Salaries & employee benefits expenses (23,957,119) (14,607,844)
Depreciation and Amortisation (2,236,569) (494,935)
Profit/(loss) on disposal of assets - (2,053)
Doubtful debts (100,000) (200,000)
Consultancy Fees (1,195,372) (873,737)
Advertising & Promotion expenses (3,462,705) (478,695)
Legal, Professional & Valuation fees (1,907,502) (1,532,538)
Rent & Outgoings (2,103,926) (515,794)
Licencing fees - (156,541)
Interest (1,242,675) (224,369)
Computer expenses (1,006,107) (432,306)
Other expenses (1,688,270) (1,262,911)
Share based payment (133,663) -
Net Profit / (loss) before income tax (7,725,629) (3,958,901)
Income tax (expense) / benefit - 139,038
Profit / (loss) from continuing operations (7,725,629) (3,819,863)
Other comprehensive income - -
Total comprehensive income / (loss) for the period
attributable to the members of Ausnet Financial Services
Limited (7,725,629) (3,819,863)
Basic and diluted earnings/(loss) per share (cents
per share) attributable to the members of The
Agency Group Australia Limited (11.39) (17.95)
The accompanying notes form part of these financial statements
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
June June
2019 2018
$ $
Current Assets
Cash and cash equivalents 2,597,299 1,021,887
Trade and other receivables 5,107,165 2,997,142
Current tax asset - 191,102
Total Current Assets 7,704,464 4,210,131
Non Current Assets
Property, Plant and Equipment 2,570,279 520,607
Financial assets 1,142,387 408,182
Intangible Assets 40,500,780 4,462,505
Total Non Current Assets 44,213,446 5,391,294
Total Assets 51,917,910 9,601,425
Current Liabilities
Trade and Other Payables 13,566,789 7,378,707
Borrowings 21,126,603 1,100,000
Provisions 716,307 388,221
Total Current Liabilities 35,409,699 8,866,928
Non Current Liabilities
Trade and Other Payables 35,308 -
Deferred tax liabilities 6,417,605 188,220
Provisions 996,927 63,940
Total Non Current Liabilities 7,449,840 252,160
Total Liabilities 42,859,539 9,119,088
Net Assets/(Liabilities) 9,058,371 482,337
Equity
Contributed Equity 27,765,049 11,480,382
Reserves 583,426 566,430
Accumulated Losses (19,290,104) (11,564,475)
Total Equity/(Net Deficiency) 9,058,371 482,337
The accompanying notes form part of these financial statements
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Contributed Accumulated Reserves
CONSOLIDATED Equity Losses Total
Balance 1 July 2018 11,480,382 (11,564,475) 566,430 482,337
Profit / (Loss) for the year - (7,725,629) - (7,725,629)
Other comprehensive income
Total comprehensive income for the period - (7,725,629) - (7,725,629)
Transactions with equity holders in their capacity as owners:
Options issued - - 16,996 16,996
Share based payments 116,667 - - 116,667
Share Subscriptions (net of transaction costs) 7,896,000 - - 7,896,000
Shares issued in lieu of services 252,000 - - 252,000
Shares issued on acquisition of Top Level Pty Ltd 7,566,667 - - 7,566,667
Shares issued on acquisition of Vicus Residential Pty Ltd 453,333 453,333
Balance 30 June 2019 27,765,049 (19,290,104) 583,426 9,058,371
Contributed Accumulated Reserves
CONSOLIDATED Equity Losses Total
Balance 1 July 2017 9,706,731 (7,744,612) 476,195 2,438,314
Profit / (Loss) for the year - (3,819,863) - (3,819,863)
Other comprehensive income
Total comprehensive income for the period - (3,819,863) - (3,819,863)
Transactions with equity holders in their capacity as owners:
Share Subscriptions (net of transaction costs) 1,773,651 - - 1,773,651
Options issued - - 90,235 90,235
Balance 30 June 2018 11,480,382 (11,564,475) 566,430 482,337
The accompanying notes form part of these financial statements
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
CONSOLIDATED STATEMENT OF CASH FLOWS
June June
2019 2018
$ $
Cash flows from operating activities
Receipts from customers 33,192,278 15,033,255
Payments to suppliers and employees (35,576,389) (17,153,785)
Interest received - 8,694
Interest paid (1,242,675) (224,369)
Net cash inflows/(outflows) from operating activities (3,626,786) (2,336,205)
Cash flows from investing activities
Payments for Property Plant and Equipment (113,348) (218,088)
Advancement of bank guarantee (600,000) (408,182)
Payments for intangibles (891,944)
Deferred purchase consideration paid (95,000) (200,000)
Net cash inflow on acquisition (cash held at acquisition) 594,258 -
Net cash inflows/(outflows) from investing activities (214,090) (1,718,214)
Cash flows from financing activities
Proceeds from issue of shares 8,400,000 1,920,000
Share issue costs - (146,349)
Repayments of borrowings (3,233,712)
Proceeds from borrowings 250,000 1,100,000
Net cash inflows/(outflows) from financing activities 5,416,288 2,873,651
Net increase in cash held 1,575,412 (1,180,768)
Cash at the beginning of financial year 1,021,887 2,202,655
Cash at the end of financial year 2,597,299 1,021,887
The accompanying notes form part of these financial statements
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
This general purpose condensed financial report has been prepared in accordance with Australian Accounting
Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001. The Agency Group Australia Limited is a
for-profit entity for the purpose of preparing the financial statements.
The financial report covers The Agency Group Australia Limited and controlled entities (“the Consolidated
Entity”). The Agency Group Australia Limited is a Company limited by shares, incorporated and domiciled in
Australia. The financial report is presented in Australian dollars which is the Consolidated Entity’s functional and
presentation currency.
The financial statements are presented in Australian dollars and have been prepared under the historical cost
convention. The financial statements of the Consolidated Entity also comply with the International Financial
Reporting Standards as issued by the International Accounting Standards Board.
The financial information in this report does not include all the notes of the type normally included within the
annual financial reports and therefore cannot be expected to provide as full an understanding of the financial
performance, financial position and financing and investing activities of the Consolidated Entity as the full
financial reports.
Therefore it is recommended that this report should be read in conjunction with the annual financial reports for
the year ended 30 June 2019, when it becomes available, and be considered together with any public
announcements made by The Agency Group Australia Limited during the year ended 30 June 2019 in accordance
with the continuous disclosure requirements of the Corporations Act 2001.
The accounting policies and methods of computation are the same as those adopted in the most recent annual
financial report.
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: REVENUE
Consolidated Entity
June June
2019 2018
$ $
Revenue from continuing operations:
Commissions 21,222,848 10,528,108
Fees 4,919,575 4,122,877
Management fees 4,987,965 2,117,509
Interest received 12,958 8,694
Other income 164,933 45,830
Total Revenue 31,308,279 16,823,018
NOTE 3: ACQUISITION
On 17 January 2019, the company announced completion of its acquisition of the entire issued capital of Top Level
Pty Ltd (‘Top Level’), with the date of acquisition being 11 January 2019. For the purposes of these financial
statements, the results of Top Level Pty Ltd have been included beginning on 11 January 2019.
Top level is a private Australian company established in 2016 as a residential sales, project marketing, commercial
sales and leasing and property management business.
The purchase price consisted of the issue of ordinary shares at a value of $2,566,667.
On 17 January 2019, the company announced completion of its acquisition of the entire issued capital of Vicus
Residential Pty Ltd, with the date of acquisition being 11 January 2019. For the purposes of these financial
statements, the results of Vicus Residential Pty Ltd have been included beginning on 11 January 2019.
Vicus Residential Pty Ltd is a property management business with 200 rental properties predominately in the inner
city of Perth.
The purchase price consisted of a cash payment of $82,500 plus the issuance of ordinary shares valued at $453,333.
NOTE 4: INTANGIBLE ASSETS
As described in note 3, on 1 April 2019, the Company completed the acquisition of Top Level. For accounting
purposes, the purchase price to be allocated to assets and liabilities (both tangible and intangible) totalled
$2,566,667. This amount is made up of shares issued. In addition, Top Level tangible net assets were negative
$28,397,254 which increased the amount of goodwill. The value of rent rolls acquired are being amortized over 6
years.
The Company has engaged a valuation firm to perform a valuation of these tangible and intangible assets and
liabilities in order to complete an allocation of the purchase price. This valuation is currently in process and the
valuation may result in changes as at 30 June 2019 to the carrying values of the tangible and intangible assets and
liabilities acquired.
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THE AGENCY GROUP AUSTRALIA LTD
ABN 52 118 913 232
NOTE 5: AFTER BALANCE DATE EVENTS
The company completed a private placement on 1 August 2019 of $1.1 million to Magnolia Capital and Honan
Insurance Group with 16,923,077 ordinary Shares issued, as announced to ASX on 24 July and 1 August 2019.
There has not been any other matter or circumstances occurring subsequent to the end of the financial year that
has significantly affected, or may significantly affect, the operations of the Consolidated Entity, the results of the
operations, or the state of the affairs of the Consolidated Entity in future financial years.
NOTE 6: AUDIT STATUS
This report is based on accounts that are in the process of being audited
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