Investor Presentation - FY21 Results
Download the PDFPreparing the document viewer…
Read the announcement as text
I N V E S T O R P R E S E N TAT I O N
F Y 2 1 Y E A R E N D R E S U LT S
August 2021
ASX:AU1
Direct exposure to national property
market with a re-set Balance Sheet and
a Team to deliver growth
DISCLAIMER
NOT AN OFFER • involve known and unknown risks and uncertainties that could
This presentation is for information purposes only. This cause actual events or results to differ materially from
presentation does not comprise a prospectus, product disclosure estimated or anticipated events or results reflected in such
statement or other offering document under Australian law (and forward looking statements; and
will not be lodged with the Australian Securities and Investments • may include, among other things, statements regarding
Commission) or any other law. estimates and assumptions in respect of prices, costs, results
SUMMARY INFORMATION and capital expenditure, and are or may be based on
assumptions and estimates related to future technical,
This presentation does not purport to be all inclusive or to contain economic, market, political, social and other conditions.
all information about the Company or any of the assets, current or
future, of the Company. This presentation contains summary The Company disclaims any intent or obligation to publicly update
information about the Company and its activities which is current any forward looking statements, whether as a result of new
as at the date of this presentation. The information in this information, future events or results or otherwise.
presentation is of a general nature and does not purport to contain The words “believe”, “expect”, “anticipate”, “indicate”,
all the information which a prospective investor may require in “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”,
evaluating a possible investment in the Company. “estimate”, “may”, “will”, “schedule” and similar expressions
The Company does not undertake to provide any additional or identify forward looking statements.
updated information whether as a result of new information, All forward looking statements contained in this Presentation are
future events or results or otherwise. qualified by the foregoing cautionary statements. Recipients are
FORWARD LOOKING STATEMENTS cautioned that forward looking statements are not guarantees of
future performance and accordingly recipients are cautioned not
Certain statements contained in this presentation, including to put undue reliance on forward looking statements due to the
information as to the future financial or operating performance of inherent uncertainty therein.
the Company and its projects, are forward looking statements.
Such forward looking statements:
• are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the
Company, are inherently subject to significant technical,
business, economic, competitive, political and social
uncertainties and contingencies;
2
EXECUTIVE SUMMARY
A SCALABLE, VERTICALLY-INTEGRATED REAL ESTATE SERVICES COMPANY
Providing investors direct exposure to the growing $8.8T residential Australian property market1
Unique business Stabilised balance
Real estate services Achieved scale
model sheet
One of Australia’s largest Our agents are our clients Substantial growth since 2017 Long-term ~$8M funding
vertically-integrated real and are at the core of our & achieved a profitable scale: package strengthens
estate services companies business model • FY21 EBITDA (pre financial position & balance
Continued agent recruitment Attracts high performing AASB16) of $4.57M sheet
growth in existing / new real estate agents by compared to an FY20 Assets (rent roll, mortgage
market sectors across two offering higher commissions EBITDA of $0.71M, a book etc) valued at more
brands: The Agency + SLP and support than traditional $3.86M improvement. than $25M
franchises & independent
models
Macroeconomic
External validation Vertical integration Scalable footprint
tailwinds
Group CEO Geoff Lucas joins Multiple cross-selling Continued strong outlook Now focused on using
mgmt. team - one of the most opportunities with a suite of with low interest rates & low scalable platform to recruit
highly regarded executive teams in real estate services including unemployment high performing agents with
the Australian property industry property sales, property limited capital outlays or
Primary lender Macquarie Bank management, mortgage increases in corporate
has reduced interest rate from financing and conveyancing overheads.
4.75% to 3.75% in recognition of (settlement) Dual brands
significant improvements to
balance sheet.
Supportive shareholder Peters
Investments converts $3M in
Convertible Notes to emerge a
30.2% shareholder
1. CoreLogic Market Report 3
FY2021
KEY TAKEAWAYS
EBITDA1 $4.6M FY20 EBITDA of $0.7M, 544%
GCI $80.7M FY20 GCI of $47.9M, 69%
Revenue $58.4M FY20 Revenue of $41.9M, 39%
Growth 57.7% vs. FY21 sales of 4964 (FY20 sales of 3147) 57.7%
compared to 40.7% for significantly above the 40.7% market growth for
market same period
market
Strong - Borrowings reducing as EBITDA grows
Balance - Operating Costs as percentage of revenue reducing
Financial - rent roll & loan book valued at ~$25m2 and cash at
Sheet
Position bank of $5.7M3
1. EBITDA is unaudited and provided on a pre -adoption of AASB16 (but includes government incentives)
2. The Agency’s East Coast rent roll was valued at in excess of $23 million by JemmesonFisher in Sep’20 4
3. As at 30 June 2021
PERFORMANCE
STRONG EBITDA ON THE BACK OF STRONG REVENUE
• Annual Group Revenue of $58.38 million, a 39.5% increase year-
on-year (FY2020: $41.86 million), vindicating effectiveness of the
Company’s model.
• EBITDA of $6.37 million. After adjusting for AASB 16 Leases
impact, EBITDA for the year was $4.57 million which compares to
an EBITDA of $0.71 million for FY2020, a $3.86 million
improvement.
• Due primarily to amortisation of the rent roll, Company ended
FY21 with a non-cash net loss after tax of $1.86 million (down
from $9.1 million in 2020).
STATUTORY UNDERLYING
$M FY21 FY20 % Change FY211 FY201 % Change
Revenue 58.38 41.86 +39% 58.38 41.86 +39%
EBITDA 6.37 2.66 +139% 4.57 0.71 +544%
1. Underlying results adjusted to exclude the impact of AASB16
5
PERFORMANCE
RECORD-BREAKING YEAR ACROSS ALL KEY METRICS
• Delivered strong operating results for
Gross commission income ($ million)
FY2021 with all key metrics increasing
during the year across our businesses. Up 69% y-o-y
• The results further reinforce the 81
sustained growth the business has been
able to achieve year-on-year for the 29
38
48
past four years. 10
• This is despite the ongoing impact of
FY 17
COVID-19 and resultant restrictions on FY 18
FY 19
FY 20
FY 21
the real estate sector nationally.
Listings Gross value of sales ($ million)
Up 30% y-o-y
Up 65% y-o-y
5,137
4,841
3,957
3,430
2,941
2,409
1,776 1,540
639 400
FY 17 FY 17
FY 18 FY 18
FY 19 FY 19
FY 20 FY 20
FY 21 FY 21
6
PERFORMANCE
STRENGTHENED FINANCIAL POSITION
Total financing facilities at end of June 2021 AU1 borrowings & EBITDA ($ million)
of $8.35 million3 EBITDA Borrowings
A renewed $5 million Macquarie Bank
primary secured debt facility 21.1
$3.35 million Convertible Note to
private investment company Peters 12.2
Investments Pty Ltd4 8.35
AU1 borrowings continue to reduce as 0.7 4.57
EBITDA grows
Macquarie Bank reduces interest rate
FY 19 FY 20 FY21
from 4.75% to 3.75% in recognition of
-4.2
the significant improvements to balance
sheet and continued strong operational
performance
($ million)
FY19 FY20 FY21
Operating costs at 32% of Revenue in FY21 Borrowings1 21.1 12.2 8.35
A reduction from 42% of revenue in Revenue 31.3 41.9 60.1
FY20 and 65% of revenue in FY19 EBITDA2 (4.2) 0.71 4.57
Asset value (rent roll and loan book) ~$25m
Note 1: Borrowings have been adjusted to off set financial assets held against the borrowings. Note 2: EBITDA adjusted to exclude the impact of AASB16 and government incentives. Note 3: Refer to June Quarter
2021 Appendix 4C in ASX announcement dated 29 July 2021 Note 4 : Includes monthly interest which is capitalised. 7
PERFORMANCE
STRENGTHENING BALANCE SHEET (AS AT JUNE 30 2021)
%
$M FY2021 FY2020
Change
Cash at Bank 5.1 2.7
Financial Assets 1.3 1.6
Other current assets 8.6 5.2
Total non-current assets 32.5 37.5
Total assets 47.6 47.0 1.3%
Total current liabilities 15.6 27.9
Total non-current liabilities 18.4 7.5
Total liabilities 33.9 35.4 -4.2%
Net assets 13.7 11.6 18%
Balance sheet does not reflect market value of rent roll and mortgage book. These assets
contribute annuity income to business of more than $8 million pa.
8
PERFORMANCE
SIGNIFICANTLY OUTPERFORMING THE NATIONAL REAL ESTATE MARKET
Total number of transactions for FY21 of 4,964, a significant
57.7% increase on prior year. This is materially greater than
the 40.7% increase experienced across the national real estate
market in the year to July 20211
Number of Sales Change in sales volume, twelve months to July 20211
+58% y-o-y
4,964
Australia 40.70%
3,147
2,409
Combined regionals 51.90%
1,540
667
Combined capitals 34%
FY 17 FY 18
FY 19 FY 20
FY 21 0% 20% 40% 60% 80% 100%
1. CoreLogic Monthly Chart Pack August 2021
9
PERFORMANCE
A NATIONAL FOOTPRINT IN KEY MARKETS READY TO SCALE
Agents (as at 30 June 21) *
Now that our business model has
achieved a profitable scale, focus shifts to
quality agent recruitment for driving 272 283 308
growth. 191
• Average GCI by agent increased by 50
+57% over FY20.
FY 17
FY 18
FY 19
FY 20*
FY 21*
• Model of allowing high-quality agents
to focus on sales and providing support
is generating year-on-year increases in 3 QLD
agents*
GCI.
• Looking to boost agent numbers in the
coming quarters. Based on Company’s 138 NSW
agents*
existing platform and cost structure,
which is largely fixed, revenue from 145 WA
agents*
any future recruitment will directly 22 VIC
agents*
contribute to EBITDA performance.
* COVID + JobKeeper slowed movement of agents, as overall industry agent numbers also reduced 10
FUTURE
BUSINESS CONTINUES TO GROW
• STRONG PIPELINE OF LISTINGS
Into FY22 on back of rebounding
property market
• QUALITY AGENT RECRUITMENT GROWTH
In existing and new market sectors
• BUILDING MARKET SHARE IN AUSTRALIA’S
PREMIER REAL ESTATE MARKETS
• Total 325 agents currently, a 6%
increase from 308 agents as at 30
June 21
• Sydney & Melbourne still performing
strongly despite COVID-19 lockdown
• STRONG FINANCIAL POSITION
Continuing to identify and implement
efficiencies into the business
11
CORPORATE SNAPSHOT
Corporate snapshot
Top shareholders Snapshot
6% - Daring
Investments
8%- Directors
& Mgmt. ASX Code Shares O/S 428.6m
AU1:ASX Shares F/D2 570.7m
30% - Peters
Investments
16% - Agents
Market capitalization Cash3
$23m (@ 5.4cps) $5.7m
40% - Other
Enterprise value Total Financing Facilities4
$25.5m (@ 5.4cps) $8.35m
Note 1: Trading history for the 12-month period ending 21 May 2021 (source: Thomson Reuters).
Note 2: Fully diluted shares outstanding inclusive of 333,333 unlisted options and conversion of the remaining balance of the Peters Investments Convertible Note ($3.26m as at 28 February 2021) at maturity. 12
Note 3: Cash as at 30 June 2021. Note 4: Refer to June Quarter 2021 Appendix 4C in ASX announcement dated 29 July 2021
Contact: Paul Niardone – Managing Director
E: pauln@theagencygroup.com.au
Ph: +61 08 9204 7955
MARKET
INSIGHTS
REAL ESTATE SECTOR AT A GLANCE
Real Estate underpins Australia's wealth
$8.8
trillion
Residential Residential Real $8.8T
Real Estate
Estate
$978 596,622
billion Total sales p.a.
Commercial real estate
Australian $3.1T
Superannuation
Australian
Real Estate
Australan Listed $2.8T
Stocks
10.6 $404
million billion
Number of dwellings Gross value of sales p.a.
$0.978T
$1.9 Commercial Real
Estate
trillion
Outstanding mortgage
debt
Data as at August 2021.
Source: CoreLogic August 2021 Monthly 15
Chart Pack, APRA, RBA, ABS, ASX
MACROECONOMIC TAILWINDS
The post COVID-19 Australian residential real estate market is achieving
record sales values and volumes
Change in dwelling values, twelve months to July 20211 Highlights1
Australia 16.1%
Combined regionals 19.6% Over the twelve-month period to July 2021:
Combined capitals 15.1%
Perth 10.8%
Australian dwelling values rose 16.1% in the 12 months to July,
Sydney
the highest annual growth rate since February 2004
18.2%
Melbourne 10.4% AU1 markets
In the three months to July, most capital cities saw the
Brisbane 15.9% strongest dwelling value growth across the top 25% of values
Adelaide 15.7%
Hobart 21.9% Sales volumes have risen 42.4% year-on-year
Darwin 23.4%
Canberra 20.5% New listings nationally sat 9.8% above equivalent period last
year and have trended lower through July, largely as a result
Change in sales volume, twelve months to July 20211 of lockdown conditions in Sydney
In the year to July, Australian rent values increased 7.5%,
Australia 42.4% which is the strongest annual appreciation in rents since
Combined regionals 51.7% December 2008
Combined capitals 37.0%
Perth 62.1%
Sydney 36.6%
Melbourne 24.8%
AU1 markets
Brisbane 47.5%
Adelaide 34.1%
Hobart 6.3%
Darwin 42.2%
Canberra 25.7%
Note 1: CoreLogic Monthly chart pack, August 2021. 16