The Agency continues national growth trajectory
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HY2020 RESULTS
2 March 2020
THE AGENCY CONTINUES NATIONAL GROWTH TRAJECTORY
POSITIVE $533K EBITDA1 FOR 1H2020
Highlights2
The Agency Group 1H19 1H20 Change
Listings 1044 1955 +87%
Gross Commission Income (m) $17.7 $24.9 +41%
No. of Properties Sold 1129 1591 +41%
Value of Properties Sold (m) $1235 $1517 +23%
Properties Under Management 4209 4678 +11%
Total Revenue (m) $10.5 $25.2 +140%
• Statutory reported EBITDA1 of +$533k for 1H20, a significant improvement on previous
corresponding period
• EBITDA of $1.5 million post adoption of new accounting standard AASB 16
• Total revenue of $25.6m – up 145% ($10.5m: 1H2019)
• Record combined gross commission income (GCI) of $24.9m – up 41% ($17.7m: 1H19);
• Strong growth across all key operating metrics (recruitment numbers, properties sold, listings,
properties under management)
• Cash and cash equivalents at 31 Dec 2019 of $3.7m – up from $2.6m as at 30 June 2019
• Total market value of rental roll and mortgage book is $29m
• Remains on target for $2.5 million cost savings during FY20
1
Prior to adoption of AASB 16
2
1H19 numbers provided in this announcement exclude Top Level, which was acquired in January 2019 2HY19
• Continued growth in revenue and key metrics across the Company expected in the second-half
FY20 on back of improving market conditions
• Launches Canberra office with highly experienced property developer and agent Peter Micalos
taking the role of senior partner
The Agency Group Australia’s (ASX:AU1) (“The Agency” or “the Company”) is pleased to provide strong results,
both operationally and financially, across the business for the six month period ending 31st December 2019 on the
back of a marked improvement in the real estate sector on the eastern seaboard during the period.
In a significant milestone, the Group reported earnings before interest tax depreciation and amortisation
(EBITDA) of $533k ($1.5million post adoption of AASB16 Leases), a significant improvement on the prior
corresponding period.
The EBITDA positive result reflects the significant synergistical benefits being realised by the company 12 months
on from its acquisition of Top Level Real Estate Pty Ltd, the success of The Agency’s disruptive model in attracting
and continuing to attract the highest quality agents and business owners and the proactive cost reduction
program being implemented during FY2020.
Positive EBITDA was achieved on the back of $25.6 million revenue from continuing operations for the six-month
period, a significant 145% increase on the six-month period ending 31 December 2018 (HY2019: $10.5m).
Total gross commission income (GCI) for the Consolidated Entity for the six-month period totalled $24.9 million –
up 41% from previous corresponding period (HY2019: $17.7 million) and representing 66% of FY19 GCI of $38
million.
GCI ($M) TOTAL REVENUE ($M)
Up 41% Y-o-Y Up 140% Y-o-Y
25.6
24.9
17.7 10.5
10.9 6.9
3.8
HY FY17 HY FY18 HY FY19 HY FY20 HY FY18 HY FY19 HY FY20
GCI was due to 1,591 exchanges and more than $1.5 billion worth of property sold across the combined group for
the six-month period. This is compared to 719 exchanges worth approximately $382 million in the previous
corresponding period.
VALUE OF EXCHANGES ($M)
Up 23% Y-o-Y
1517
1235
190.5
97.5
HY FY17 HY FY18 HY FY19 HY FY20
Looking ahead to the second half of FY2020, the Company remains confident revenue and commission growth
will be maintained as the real estate market shows further signs of improvement.
The pipeline for future sales is significant, with the combined group reporting 1,955 listings, up 87% on the
previous corresponding period.
NUMBER OF NEW LISTINGS (#)
2500
Up 87% Y-o-Y
1955
2000
1500
1044
1000
492
500 251
0
HY FY17 HY FY18 HY FY19 HY FY20
Properties under management (PuM) also continues to be a source of strength for the Company with The
Agency’s east coast and west coast operations reporting a total management portfolio of 4,678 PuM as at 31st
December 2019, up 11% on the previous corresponding period (1H19: 4209PuM).
NUMBER OF PUM (#)
Up 11%Y-o-Y
4,678
4,209
3,382
HY FY18 HY FY19 HY FY20
The number of agents operating under the combined group were 278 as at 31st of December 2019, down from
292 agents as at 31st December 2018. This follows Fair Work Australia’s recent legislative changes (which meant
all agents in WA had to receive a minimum commission), resulting in the Company reducing the number of
agents within its SLP brand during the period.
Post end of period, The Agency launched an office in Canberra appointing highly experienced property developer
and agent Peter Micalos to the role of senior partner.
The Agency Canberra will offer residential and commercial sales, residential and commercial property
management and project marketing and sales.
Along with Mr Micalos’ project pipeline, that is estimated to grow to 2,000 units over 24 months and a total value
of $1 billion, he will be establishing The Agency’s bricks-and-mortar hub in Canberra and initiating a major
recruitment drive.
Canberra is on a growth trajectory with dwelling values increasing by 2.3% in December 2019 and 3.14% in
January 2020.3
Cost reduction program
As part of the Company’s ongoing integration of The Agency’s East Coast and West Coast operations, a proactive
cost reduction program has been implemented across the combined group during FY2020.
During the six-month period, wage savings of approximately $678,000 have been realised as a result of
streamlining the business post-merger with Top Level Real Estate Pty Ltd.
Cost reductions of $2.5 million are expected to be delivered in FY20 with The Agency on target to meet these
reductions.
Results Commentary
Commenting on the half year results, The Agency Group’s Managing Director Paul Niardone said:
I am thrilled to deliver yet another set of strong results for the HY2020 which included a maiden positive EBITDA of
$533k.
These results reflect the strength of our brand and why reputable real estate businesses and agents continue to
join our business as they realise we offer higher commissions, reduced risk and higher-level of support compared
to franchise and stand-alone businesses.
3
https://www.corelogic.com.au/research/monthly-indices
In addition, we are witnessing an improving housing market in which house values have risen across every capital
city, auction clearance rates have rapidly increased and fewer days on market for properties in Sydney and
Melbourne. In Perth, green shoots are emerging with a boost to property values in recent months.
We continued our national growth trajectory with the launch of an office in Canberra – which holds an important
position on our expansion roadmap – appointing highly experienced property developer and agent Peter Micalos
to the role of senior partner. According to CoreLogic data, Canberra is on a growth trajectory with dwelling values
increasing by 2.3% in December 2019 and 3.14% in January 2020.
The nation-wide improvement in the housing market is highly encouraging for The Agency and we anticipate
building on our strong half year 2020 result for the remainder of the financial year.
This ASX release has been approved for release by the board.
Stuart Usher
Company Secretary
For further information, please refer to the Company’s Half Year 2020 accounts and/or 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