Interim Financial Report 31 Dec 2023 & Appendix 4D
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ABN 52 118 913 232
and its controlled entities
APPENDIX 4D
Interim Financial Report
31 December 2023
THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Corporate directory
Current Directors
Andrew Jensen Executive Chairman and Chief Operating Officer
Geoff Lucas Managing Director and CEO
Paul Niardone Executive Director
Adam Davey Non-executive Director
Company Secretary
Stuart Usher
Registered Office and Head Office Share Registry
Street: 68 Milligan Street Advanced Share Registry Limited
PERTH WA 6000 Street + Postal: 110 Stirling Highway
Postal: PO Box 7768 Nedlands WA 6009
Cloisters Square WA 6850 Telephone: 1300 113 258 (within Australia)
Telephone: +61 (0)8 9204 7955 +61 (0)8 9389 8033 (International)
Facsimile: +61 (0)8 9204 7956 Facsimile: +61 (0)8 6370 4203
Email: info@theagencygroup.com.au Email: admin@advancedshare.com.au
Website: theagencygroup.com.au Website: www.advancedshare.com.au
Auditors Securities Exchange
Hall Chadwick WA Audit Pty Ltd Australian Securities Exchange
Street: 283 Rokeby Road Street: Level 40, Central Park
Subiaco WA 6008 152-158 St Georges Terrace
Telephone: +61 (0)8 9426 0666 Perth WA 6000
Telephone: 131 ASX (131 279) (within Australia)
Solicitors Telephone: +61 (0)2 9338 0000
Steinepreis Paganin Facsimile: +61 (0)2 9227 0885
Street: Level 4, The Read Buildings Website: www.asx.com.au
16 Milligan Street ASX Code: AU1
Perth WA 6000
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Contents
◼ Results for announcement to the market ................................................................................................................................... 1
◼ Directors' report .......................................................................................................................................................................... 3
◼ Auditor's independence declaration ........................................................................................................................................... 6
◼ Condensed consolidated statement of profit or loss and other comprehensive income ........................................................... 7
◼ Condensed consolidated statement of financial position .......................................................................................................... 8
◼ Condensed consolidated statement of changes in equity .......................................................................................................... 9
◼ Condensed consolidated statement of cash flows .................................................................................................................... 10
◼ Notes to the condensed consolidated financial statements ..................................................................................................... 11
◼ Directors' declaration ................................................................................................................................................................ 21
◼ Independent auditor's report.................................................................................................................................................... 22
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Results for announcement to the market
for the half-year ended 31 December 2023
1 REPORTING PERIOD (item 1)
◼ Report for the period ended: 31 December 2023
◼ Previous corresponding period is half-year ended: 31 December 2022
2 RESULTS FOR ANNOUNCEMENT TO THE MARKET Movement Percentage Amount
% $’000
◼ Revenues from ordinary activities (item 2.1) Increase 17.16 to 43,927
◼ Loss from ordinary activities after tax attributable to members
Increase 87.23 to (3,123)
(item 2.2)
◼ Loss after tax attributable to members (item 2.3) Increase 87.23 to (3,123)
a. Dividends (items 2.4 and 5) Amount per Franked amount
Security per security
₵ %
◼ Interim dividend nil n/a
◼ Final dividend nil n/a
◼ Record date for determining entitlements to the dividend
n/a
(item 2.5)
b. Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6):
1. Revenue represents service revenue.
2. EBITDA of $1,688K, refer to section 2.3 Financial Review of the Directors’ Report for details.
3 DIVIDENDS (item 6) AND RETURNS TO SHAREHOLDERS INCLUDING DISTRIBUTIONS AND BUY BACKS
Nil
a. Details of dividend or distribution reinvestment plans in operation are described below (item 6):
Not applicable
4 RATIOS 6 months to 6 months to
31 December 31 December
2023 2022
a. Financial Information relating to 4b: $’000 $’000
Earnings for the period attributable to owners of the parent (3,123) (1,668)
31 December 31 December
2023 2022
$’000 $’000
Net assets 9,636 14,992
Less: Intangible assets and deferred tax balances (22,528) (25,121)
Net tangible (liabilities)/assets (12,892) (10,129)
No. No.
Fully paid ordinary shares 428,575,921 428,575,921
₵ ₵
b. Net tangible (liability)/assets backing per share (cents) (item 3): (3.008) (2.363)
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Results for announcement to the market
for the half-year ended 31 December 2023
5 DETAILS OF ENTITIES OVER WHICH CONTROL HAS BEEN GAINED OR LOST DURING THE PERIOD: (item 4)
a. Control gained over entities
◼ Name of entities (item 4.1) Nil
◼ Date(s) of gain of control (item 4.2) N/A
b. Loss of control of entities
◼ Name of entities (item 4.1) Nil
◼ Date(s) of loss of control (item 4.2) N/A
c. Contribution to consolidated loss from ordinary activities after tax by N/A
the controlled entities to the date(s) in the current period when
control was gained / lost (item 4.3).
d. Profit from ordinary activities after tax of the controlled entities for the N/A
whole of the previous corresponding period (item 4.3)
6 DETAILS OF ASSOCIATES AND JOINT VENTURES: (item 7)
◼ Name of entities (item 7) Nil
◼ Percentage holding in each of these entities (item 7) N/A
6 months to 6 months to
31 December 31 December
2023 2022
$’000 $’000
◼ Aggregate share of profits (losses) of these entities (item 7) N/A N/A
7 The financial information provided in the Appendix 4D is based on the interim final report (attached), which has been
prepared in accordance with Australian Accounting Standards.
8 The report is based on accounts which have been reviewed by the Company’s independent auditor (item 9).
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Directors' report
Your Directors present their report on the Group, consisting of The Agency Group Australia Ltd (The Agency or the Company)
and its controlled entities (collectively the Group), for the half-year ended 31 December 2023 (HY2024).
The Agency is listed on the Australian Securities Exchange (ASX:AU1).
1. Directors
The names of Directors in office at any time during or since the end of the half-year are:
◼ Andrew Jensen Executive Chairman and Chief Operating Officer
◼ Geoff Lucas Managing Director and CEO
◼ Paul Niardone Executive Director
◼ Adam Davey Non-Executive Director
(collectively the Directors or the Board)
Directors have been in office since the start of the half-year to the date of this report unless otherwise stated.
2. Operating and financial review
2.1. Nature of Operations Principal Activities
The principal activity of the Group for the half-year was real estate services and related activities. There were no significant
changes in the nature of the Group’s principal activities during the half-year.
2.2. Operations Review
a. Key Metrics
COMBINED GROUP REVENUE ($M) GCI ($M)
50 60
45
50 56.9
40 43.9 52.9
35 40 45.7
35.6 37.5
30
25 30 38.1
29.4
20
15 20
10 10
5
0 0
HY2021 HY2022 HY2023 HY2024 HY2021 HY2022 HY2023 HY2024
SALES NUMBER OF NEW LISTINGS (#)
3,500 3,500
3,000 $3.3bn 3,000
$3.1bn 3,115 3,124 3,224
2,910 3,050
2,500 2,847 2,500
$2.6bn
2,000 2,407
$2.2bn 2,000 2,449
1,500 1,500
1,000 1,000
500 500
0 0
HY2021 HY2022 HY2023 HY2024 HY2021 HY2022 HY2023 HY2024
PROPERTIES UNDER MANAGMENT (PUM) (#)
12,000
10,000
8,000 5,003
6,000
960
0 150
4,000
4,908 5,089
2,000 3,601 3,398
0
HY2021 HY2022 HY2023 HY2024
The Agency Owned Services
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Directors' report
The Agency is pleased to report strong year on year growth on key financial and operational metrics in HY2024. Continued
geographical expansion and increased depth in existing markets underpinned growth across the period.
This growth resulted in Gross Commission Income (GCI) for the six-month period of $56.9 million, up 24% on HY2023’s GCI of
$45.7 million. This figure was a result of 3,115 exchanges across the Group for HY2024 (up 9% on 2,847 exchanges in HY2023)
resulting in $3.3 billion worth of property sold across the combined Group for the period (up 29% on $2.6 billion in HY2023).
Group revenue for HY2024 increased to $43.9 million, up 17% on HY2023’s Group revenue of $37.5 million.
The pipeline for future sales commission remains strong with the combined Group reporting 3,224 listings for the half-year
period from 411 agents as at 31 December 2023 (411 agents at 31 December 2022). In the 6 months since 30 June 2023, The
Agency continued to increase the quality of the agent team with a trend of lower performing agents leaving the industry,
replaced with higher performing agents.
The Agency reported a total management portfolio of 10,092 properties under management at the end of December 2023.
The Agency owned 5,089 of these property under management rights located in NSW, Victoria, Tasmania, and WA and The
Agency has full profit and loss benefits on these managements. The remaining 5,003 properties under management are
managed under service arrangements.
2.3. Financial Review
The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
a. Non-IFRS information
The Company reports EBITDA in addition to the Profit after Tax. EBITDA is a financial measure which is not prescribed
by Australian Accounting Standards (AAS) and represents the statutory profit under AAS adjusted for specific non-cash
and significant items. The Company’s Directors consider EBITDA to reflect the core earnings of the consolidated entity.
A reconciliation between EBITDA and profit after income tax for the half-year ended 31 December 2023 is noted below.
EBITDA calculation HY2024 HY2023 Change Change
$’000 $’000 $’000 %
Profit / (loss) after tax (3,123) (1,668) -1,455 -87%
Income tax benefit 396 237
Profit / (loss) before tax (3,519) (1,905) -1,614 -85%
Interest income (2) (47)
Depreciation and amortisation 3,346 3,196
Embedded derivative non-cash financing (gains) / costs1 499 (758)
Impairment (recovery) / expense - -
Interest and finance costs 763 832
Gain financial assets at FVPL 113 -
Profit on sale of assets2 and lease exit (45) (1,590)
Disposal of assets costs - 76
Acquisition of business costs - 74
Legal costs non-recurring 315 -
Share-based payments expense 218 260
EBITDA 1,688 138 +1,550 +1,123%
AASB 16 Leases impact3 (1,131) (1,085)
EBITDA (pre-AASB16 Leases impact) 557 (947) +1,504 +159%
Other key metrics:
◼ GCI 56,894 45,734 +11,160 +24%
◼ Gross profit 14,614 12,206 +2,408 +20%
1 Refer to note 2.1 of the financial statements
2 HY2023 Gain on sale of assets included a gain on the sale of the trail book of $1.579 million.
3 AASB 16 Leases was adopted from 1 July 2019. The above demonstrates finance costs and amortisation, which prior to the adoption AASB 16
was recognised as rent expense.
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Directors' report
For HY2024 the Group recorded EBITDA of $1.69 million (HY2023: $0.14 million). After adjusting for the AAB16 Leases
impact, underlying EBITDA for HY2024 was $0.56 million profit. This represents a $1.50 million improvement in underlying
EBITDA.
The Group generated a net loss after tax for the half-year of $3.12 million (HY2023: $1.67 million loss). This was primarily
impacted by interest and finance costs ($0.76 million), depreciation and amortisation ($3.35 million), and embedded
derivative non-cash financing costs ($0.50 million).
The net assets of the Group have decreased from 30 June 2023 by $2.91 million to $9.64 million at 31 December 2023
(30 June 2023: $12.54 million). Importantly, due to accounting standards, the value attached to internally generated
Property Management Assets and remaining Mortgage Trail Book is not recorded on the balance sheet. Management has
valued these combined at $29.31 million using a blended valuation multiple of 3.34x on Q4 HY2024 annualised property
management fee revenue and 2.25x on Q4 HY2024 net trail income relating to the remaining Mortgage Trail Book. As a
result of this, there is significant shareholder wealth held off balance sheet, as only $9.35 million of the $29.31 million
Property Management and Mortgage Trail Book value is held on balance sheet. Including this off-balance sheet value
adjusted net assets of The Agency have increased by $0.49 million to $29.59 million at 31 December 2023 (30 June 2023:
$29.11 million).
The Group's cash and cash equivalents increased from 30 June 2023 by $0.07 million to $4.70 million at 31 December 2023
(30 June 2023: $4.63 million).
2.4. Environmental Regulations
The Group's operations are not subject to any significant environmental regulations in the jurisdictions it operates in.
2.5. Events Subsequent to Reporting Date
There are no other significant after balance date events that are not covered in this Directors' Report or within the financial
statements as disclosed in note 8 Events subsequent to reporting date on page 16.
2.6. Future Developments, Prospects and Business Strategies
The Agency continues to focus on growth opportunities and attracting real estate agents to its contemporary direct
engagement business model. By contracting directly with agents, The Agency removes the ‘middle layer’ which has created
a more responsive, efficient and effective model for our agents as they are alleviated from the distractions and the
administrative burden associated with operating an office.
Future growth will come from continued attraction of agents and growth in agent numbers across existing geographical
regions, as well as further expansion across new regions in Australia. Further growth is expected from increased efficiencies
driven by economies of scale and utilisation of best practice technological advances to ensure agents can maximise their
productivity. The highly fragmented structure of the industry presents an opportunity for consolidation of smaller
independents and franchisees looking to simplify their business which aligns with the strengths of our business model.
The Agency continues to assess a variety of strategic partnerships and adjacent revenue opportunities closely related to
the activities of real estate sales transactions in addition to the existing property management, mortgage broking and
conveyancing businesses already undertaken.
3. Rounding of amounts
The amounts contained in this report have been rounded to the nearest thousand dollars under the option available to the
Company under Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 dated 24 March 2016.
4. Auditor's independence declaration
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 (Cth) for the half-year ended
31 December 2023 has been received and can be found on page 6 of the interim financial report.
This Report of the Directors is signed in accordance with a resolution of the Board of Directors made pursuant to section 306(3)
of the Corporations Act 2001 (Cth).
GEOFF LUCAS
Managing Director and CEO
Dated this Thursday, 22 February 2024
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Auditor's independence declaration
Under section 307c Of The Corporations Act 2001 (Cth)
To The Directors Of THE AGENCY GROUP AUSTRALIA LTD
TO BE RECEIVED FROM
AUDITORS
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Condensed consolidated statement of profit or loss and other comprehensive income
for the half-year ended 31 December 2023
6 months to 6 months to
31 December 31 December
2023 2022
Note $’000 $’000
Continuing operations
Revenue 1.1 43,927 37,492
Cost of sales (29,313) (25,286)
Gross profit 14,614 12,206
Other income 1.2 305 1,934
Administrative and other expenses (17,176) (15,971)
Impairment losses - -
(Loss) / profit before tax and finance costs (2,257) (1,831)
Interest and finance costs (763) (832)
Embedded derivative non-cash financing gains / (costs) 2.1 (499) 758
(Loss) / profit before tax (3,519) (1,905)
Income tax benefit 396 237
(Loss) / profit for the half-year (3,123) (1,668)
Other comprehensive income, net of income tax
◼ Items that will not be reclassified subsequently to profit or loss: - -
◼ Items that may be reclassified subsequently to profit or loss: - -
Other comprehensive income for the period, net of tax - -
Total comprehensive income attributable to members of the parent entity (3,123) (1,668)
Earnings per share: ₵ ₵
Basic (loss) /earnings per share (cents per share) (0.73) (0.39)
Diluted earnings per share (cents per share) N/A N/A
1,688 138
The condensed consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Condensed consolidated statement of financial position
as at 31 December 2023
31 December 30 June
2023 2023
Note $’000 $’000
Current assets
Cash and cash equivalents 4,703 4,632
Trade and other receivables 13,322 12,661
Other current assets 1,110 575
Total current assets 19,135 17,868
Non-current assets
Trade and other receivables 394 699
Financial assets 994 1,004
Property, plant, and equipment 1,620 1,781
Right of use assets 3,804 3,911
Intangible assets 4.1 22,528 24,457
Total non-current assets 29,340 31,852
Total assets 48,475 49,720
Current liabilities
Trade and other payables 18,241 17,199
Provisions 3,155 2,698
Leases 1,800 1,761
Total current liabilities 23,196 21,658
Non-current liabilities
Borrowings 3.1.1 8,400 8,400
Financial liabilities 3.2.1 3,705 3,044
Provisions 323 287
Leases 3,215 3,394
Deferred tax liabilities - 396
Total non-current liabilities 15,643 15,521
Total liabilities 38,839 37,179
Net assets 9,636 12,541
Equity - -
Issued capital 5.1.1 43,635 43,635
Reserves 5.4 917 1,032
Accumulated losses (34,916) (32,126)
Total equity 9,636 12,541
(4,061) (3,790)
(12,892) (11,520)
The condensed consolidated statement of financial position is to be read in conjunction with the accompanying notes.
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Condensed consolidated statement of changes in equity
for the half-year ended 31 December 2023
Share-based
Contributed Accumulated payment Total
Note equity Losses Reserve equity
$’000 $’000 $’000 $’000
Balance at 1 July 2022 43,635 (28,125) 890 16,400
Loss for the half-year attributable to owners of the
parent - (1,668) - (1,668)
Other comprehensive income for the half-year
attributable owners of the parent - - - -
Total comprehensive income for the half-year
attributable owners of the parent - (1,668) - (1,668)
Transaction with owners, directly in equity
Shares issued during the half-year (net of costs) - - - -
Share-based payments granted during the half-year 9 - - 260 260
Transfers to / from reserves - 320 (320) -
Balance at 31 December 2022 43,635 (29,473) 830 14,992
Balance at 1 July 2023 43,635 (32,126) 1,032 12,541
Loss for the half-year attributable to owners of the
parent - (3,123) - (3,123)
Other comprehensive income- for the half-year
attributable owners of the parent - - - -
Total comprehensive income for the half-year
attributable owners of the parent - (3,123) - (3,123)
Transaction with owners, directly in equity
Shares issued during the half-year (net of costs) - - - -
Share-based payments granted during the half-year 9 - - 218 218
Transfers to / from reserves - 333 (333) -
Balance at 31 December 2023 43,635 (34,916) 917 9,636
The condensed consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Condensed consolidated statement of cash flows
for the half-year ended 31 December 2023
6 months to 6 months to
31 December 31 December
2023 2022
$’000 $’000
Cash flows from operating activities
Receipts from customers 44,905 41,686
Payments to suppliers and employees (42,758) (41,917)
Interest received 2 47
Finance costs (386) (413)
Net cash provided / (used in) by operating activities 1,763 (597)
Cash flows from investing activities
Purchase of property, plant, and equipment (215) (352)
Deposit for bank guarantees (2) (40)
Purchase of intangibles (105) (542)
Loans to other entities (65) (64)
Net cash received on disposal of asset 54 (39)
Payment for acquisition of subsidiary, net of cash acquired - (4,365)
Net cash (used in) investing activities (333) (5,402)
Cash flows from financing activities
Proceeds from borrowings - 3,400
Payment of principal portion of lease liabilities (1,359) (1,203)
Net cash (used in) / provided by financing activities (1,359) 2,197
Net (decrease) / increase in cash and cash equivalents held 71 (3,802)
Cash and cash equivalents at the beginning of the half-year 4,632 8,216
Cash and cash equivalents at the end of the half-year - 4,703 4,414
The condensed consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
In preparing the December 2023 Interim Financial Report, The Agency Group Australia Ltd has grouped into sections under the
same key categories as used in the June 2023 Annual Report:
◼ Section A: How the numbers are calculated .............................................................................................................................12
◼ Section B: Unrecognised items ..................................................................................................................................................16
◼ Section C: Other Information ....................................................................................................................................................16
Significant accounting policies specific to each note are included within that note. Accounting policies that are determined to be
non-significant are not included in the financial statements.
The financial report is presented in Australian dollars, except where otherwise stated.
The amounts contained in these financial statements have been rounded to the nearest thousand dollars under the option
available to the Group under Australian Securities and Investments Commission (ASIC) Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016.
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
SECTION A. HOW THE NUMBERS ARE CALCULATED
This section provides additional information about those individual line items in the financial statements that the Directors
consider most relevant in the context of the operations of the Group.
Note 1 Revenue and other income 6 months to 6 months to
31 December 31 December
2023 2022
$’000 $’000
1.1 Revenue
Residential Sales commissions 36,843 30,649
Mortgage and Settlement revenue 1,558 2,271
Property Management revenue: Management fees 4,135 3,508
Other 1,391 1,064
43,927 37,492
1.2 Other Income 6 months to 6 months to
31 December 31 December
2023 2022
$’000 $’000
Interest income 2 47
Gain on sale of trail book - 1,579
Gain on sale of property, plant, and equipment 45 -
Gain on exit of lease - 11
Loss financial assets at FVPL (113) -
Other income 371 297
305 1,934
Note 2 Expenses 6 months to 6 months to
31 December 31 December
2023 2022
$’000 $’000
2.1 Embedded derivative non-cash financing (gains)/costs:
◼ Embedded Derivative – Finance cost 298 1,570
◼ Embedded Derivative – Fair value adjustment 201 (2,328)
499 (758)
Note 3 Financial assets and financial liabilities
3.1 Borrowings 31 December 30 June
2023 2023
$’000 $’000
3.1.1 Non-current
Bank loans 8,400 8,400
8,400 8,400
3.1.2 Waiver of covenant
During the year, Macquarie Bank Limited (MBL) provided a covenant waiver in relation to the interest cover ratio (ICR) for
the period to December 2023 as part of the normal quarterly reporting requirements.
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
Note 3 Financial assets and financial liabilities (cont.)
3.2 Financial liabilities 31 December 30 June
2023 2023
$’000 $’000
3.2.1 Non-current
Convertible note:
◼ Debt component 1,949 1,489
◼ Derivative financial liability conversion option 1,756 1,555
3,705 3,044
3.2.2 Reconciliation of convertible notes
Opening balance:
◼ Debt component 1,489 2,039
◼ Derivative financial liability conversion option 1,555 1,982
3,044 4,021
◼ Interest charged 460 2,150
◼ Fair value movement: Derecognition - (1,278)
Fair value changes 201 (1,849)
Carrying value of liabilities at reporting date 3,705 3,044
Note 4 Non-financial assets and financial liabilities
4.1 Intangible assets Note 31 December 30 June
2023 2023
$’000 $’000
Goodwill 4.1.1a 12,383 12,383
12,383 12,383
Rent Roll and trail book 4.1.1a 25,968 25,968
Accumulated amortisation (16,613) (14,666)
9,355 11,302
Others 1,095 989
Accumulated amortisation and impairment (305) (217)
790 772
Total intangibles 22,528 24,457
P a g e | 13
APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
Note 4 Non-financial assets and financial liabilities (cont.)
4.1.1 Key estimates and Critical Judgements– Impairment of intangibles
a. Impairment of goodwill and rent roll
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash generating units
(CGU) to which goodwill has been allocated. The value-in-use calculation requires management to estimate the
future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate present value.
Where the actual future cash flows are less than expected, an impairment loss may arise.
Included within the Top Level CGU (acquired in 2019) is a rent roll asset of $5,322K (June 2023: $6,885K). This same
CGU also included goodwill of $10,658K, relating to sales (June 2023: $10,658K).
For the rent roll assets, the recoverable amounts of these CGU's are derived from market transactional evidence in
relation to their fair value. Management have determined that a multiple of 3.8 for residential property and 2.75 for
commercial property for the Top Level CGU (based on an independent expert opinion), multiplied by the annual rent
roll income is an appropriate measure of the fair value of the rent roll assets. Fair value less cost to sell of the CGU
was classified on a level 2 basis. No impairment resulted.
Management performed a goodwill impairment test of the Top Level Real Estate Sales CGU taking a conservative
approach in preparing its value in use calculation in light of market uncertainty resulting from increases in interest
rates to curb inflationary pressures. Management applied a discount rate of 15% resulting in no impairment loss for
December 2023 (June 2023: 15%). To evaluate the recoverable amount of the CGU, a terminal value has been
assumed after the fifth year and includes a growth rate in the cash flow of 0% into perpetuity (June 2023: 0%). The
discount rates used reflects the risks specific to the CGU.
Note 5 Equity
5.1 Issued capital 31 December 30 June 31 December 30 June
2023 2023 2023 2023
No. No. $’000 $’000
Fully paid ordinary shares 428,575,921 428,575,921 43,635 43,635
6 months to 6 months to
31 December 12 months to 31 December 12 months to
2023 30 June 2023 2023 30 June 2023
5.1.1 Ordinary shares No. No. $’000 $’000
At the beginning of the period 428,575,921 428,575,921 43,635 43,635
Shares issued during the period: - - - -
Transaction costs relating to share issues - - - -
At reporting date 428,575,921 428,575,921 43,635 43,635
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Notes to the condensed consolidated financial statements
for the half-year 31 December 2023
Note 5 Equity (cont.)
5.2 Performance equity 31 December 30 June 31 December 30 June
2023 2023 2023 2023
No. No. $’000 $’000
Performance equity 11,000,000 11,000,000 508 375
6 months to 6 months to
31 December 12 months to 31 December 12 months to
2023 30 June 2023 2023 30 June 2023
5.2.1 Performance equity movement No. No. $’000 $’000
At the beginning of the period 11,000,000 11,000,000 375 111
Performance equity changes during
the period:
◼ Expense of issued performance - - 133 264
rights
At reporting date 11,000,000 11,000,000 508 375
5.3 Options Note 31 December 30 June 31 December 30 June
2023 2023 2023 2023
No. No. $’000 $’000
Options 11,500,000 20,000,000 409 657
6 months to 6 months to
31 December 12 months to 31 December 12 months to
2023 30 June 2023 2023 30 June 2023
5.3.1 Options equity movement No. No. $’000 $’000
At the beginning of the period 20,000,000 30,000,000 657 779
Options movement during the period:
◼ Amortisation of granted - - 35 198
options
◼ Options granted 9.2.1a 1,500,000 - 50
◼ Expiry of options (10,000,000) (10,000,000) (333) (320)
At reporting date 11,500,000 20,000,000 409 657
5.4 Reserves Note 2023 2022
$’000 $’000
Share-based payment reserve: - -
◼ Performance rights 5.2 508 375
◼ Options 5.3 409 657
917 1,032
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
SECTION B. UNRECOGNISED ITEMS
This section of the notes provides information about items that are not recognised in the financial statements as they do not (yet)
satisfy the recognition criteria. In addition to the items and transactions disclosed below, there are also unrecognised tax amounts.
Note 6 Commitments
There are no material commitments to the Group as at 31 December 2023 (30 June 2023: Nil).
Note 7 Contingent liabilities
There are no contingent liabilities as at 31 December 2023.
Note 8 Events subsequent to reporting date
There have not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may
significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial periods.
SECTION C. OTHER INFORMATION
This section of the notes includes other information that must be disclosed to comply with the accounting standards and other
pronouncements, but that is not immediately related to individual line items in the financial statements.
Note 9 Share-based payments Note 6 months to 6 months to
31 December 31 December
2023 2022
$ $
9.1 Share-based payments:
◼ Recognised in profit and loss:
Share-based payment expense – Performance rights 132,959 132,959
Share-based payment expense – Amortisation of option issued 35,070 126,657
in prior period
Share-based payment expense – Options 9.2.1a.i 50,250 -
Gross share-based payments 218,279 259,616
9.2 Share-based payment arrangements in effect during the period
9.2.1 Issued during the current half-year
a. Options issued as consulting fees
i. In connection with corporate advisory services (RM Corporate Finance Pty Ltd (RM)), where RM receives a
monthly retainer of $4,000 as well as 1,500,000 options. These performance rights have been valued and issued
on terms as detailed below and in note 9.4.
Number under Option Date of Expiry Consideration Exercise Price Vesting Terms
1,500,000 30.11.2026 Nil $0.050 Vest immediately
The total value of the options was $50,250.
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
Note 9 Share-based payments (cont.)
9.3 Movement in Company options share-based payment arrangements during the period
A summary of the movements of all Company options issued as share-based payments is as follows:
6 months to 12 months to
31 December 2023 30 June 2023
$ $
Number of Weighted Average Number of Weighted Average
Options Exercise Price Options Exercise Price
Outstanding at the beginning of the period 20,000,000 $0.088 30,000,000 $0.075
Granted 1,500,000 $0.034 - -
Expired (10,000,000) $0.075 (10,000,000) $0.050
Outstanding at period end 11,500,000 $0.091 20,000,000 $0.088
Exercisable at period end 1,500,000 $0.100 10,000,000 $0.075
a. The weighted average remaining contractual life of options outstanding at half-year end was 1.03 years (June 2023:
1.25 years).
b. The fair value of the options granted to employees is deemed to represent the value of the employee services received
over the vesting period.
9.4 Fair value of options granted in current period
The fair value of the options granted to employees is deemed to represent the value of the services received over the
vesting period.
The weighted average fair value of options granted during the half-year was $0.0335 (Dec 2022: $0.0338). These values
were calculated using the Black-Scholes option pricing model, applying the following inputs to options issued this half-
year:
Note reference 9.2.1a
Grant date: 30 November 2023
Grant date share price: $0.045
Option exercise price: $0.050
Number of options issued: 1,500,000
Remaining life (years): 2.92
Expected share price volatility: 130.56
Risk-free interest rate: 3.93%
Value per option $0.0335
Fair values:
Total fair value $50,250
Recognised in the period $50,250
Historical volatility was the basis for determining expected share price volatility as it is assumed that this is indicative of
future movements. The life of the options is based on historical exercise patterns, which may not eventuate in the future.
P a g e | 17
APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
Note 10 Operating segments
10.1 Segment Financial Performance
Real Estate Mortgage Total
Property Origination Reportable Other
Services Services Segments Segments Total
31 December 2023 $’000 $’000 $’000 $’000 $’000
Revenue
◼ External revenues 43,367 530 43,897 30 43,927
◼ Inter-segment revenues - - - -
Total segment revenue 43,367 530 43,897 30 43,927
Total group revenue and other income _ 43,927
Segment EBITDA 6,531 77 6,608 (4,920) 1,688
◼ Unallocated corporate costs -
EBITDA _ 1,688
Reconciliation of segment loss to Group loss:
(i) Allocated items:
◼ Gain on disposal of assets - - - 45 45
◼ Depreciation and amortisation (2,846) (12) (2,858) (488) (3,346)
◼ Net finance costs (556) (1) (557) (502) (1,059)
◼ Fair value adjustments (113) - (113) - (113)
(ii) Unallocated items:
◼ Legal costs non-recurring - - - (315) (315)
◼ Fair value adjustments - - - (201) ( 201)
◼ Share-based payments - - - (218) (218)
Loss before income tax _ (3,519)
31 December 2022
Revenue
◼ External revenues 36,224 1,254 37,478 14 37,492
◼ Inter-segment revenues - - - - -
Total segment revenue 36,224 1,254 37,478 14 37,492
Reconciliation of segment revenue to Group revenue:
◼ Eliminations -
Total group revenue and other income _ 37,492
Segment EBITDA 4,717 104 4,821 (4,683) 138
◼ Unallocated corporate costs -
EBITDA _ 138
Reconciliation of segment loss to Group loss:
(i) Allocated items:
◼ Gain on disposal of assets 11 1,579 1,590 - 1,590
◼ Depreciation and amortisation (2,776) (34) (2,810) (386) (3,196)
◼ Net finance costs (372) (5) (377) (1,978) (2,355)
◼ Redundancy costs - (76) (76) - ( 76)
(ii) Unallocated items:
◼ Fair value adjustments - - - 2,328 2,328
◼ Share-based payments - - - (260) (260)
◼ Acquisition costs - - - (74) (74)
Loss before income tax _ (1,905)
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
Note 16 Statement of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial
statements to the extent they have not already been disclosed in the other notes above. These policies have been consistently
applied to all the periods presented, unless otherwise stated.
16.1 Basis of preparation
16.1.1 Reporting Entity
The Agency Group Australia Ltd (The Agency or the Company) is a listed public company limited by shares, domiciled, and
incorporated in Australia. This interim financial report is intended to provide users with an update on the latest annual
financial statements of The Agency Group Australia Ltd and controlled entities. As such, it does not contain information
that represents relatively insignificant changes occurring during the half-year within the Group. It is therefore
recommended that this financial report be read in combination with the annual financial statements of the Group for
the year ended 30 June 2023, together with any public announcements made during the half-year.
16.1.2 Basis of accounting
The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act
2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International
Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year report does not include notes of the type
normally included in an annual financial report and shall be read in conjunction with the most recent annual financial
report.
The financial statements were authorised for issue on 22 February 2024 the Directors of the Company.
16.1.3 Going Concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group incurred a loss for the half-year of $3.12 million (31 December 2022: $1.67 million loss) and a net cash in-flow
from operating activities of $1.76 million (31 December 2022: $0.60 million out-flow). Included in loss for during the half-
year was interest and finance costs ($0.76 million), depreciation and amortisation ($3.35 million), and embedded derivative
non-cash financing costs ($0.50 million).
As at 31 December 2023, the Company had a working capital deficit of $4.06 million (30 June 2023: $3.79 million working
capital deficit). The Directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash
flows to meet commitments and working capital requirements for the 12-month period from the date of signing this financial
report.
The ability of the Group to continue as a going concern is principally dependent on the following:
◼ The Group continuing to generate cash flows from operations; and
◼ The Group not breaching the terms of its borrowing facilities.
As disclosed in notes 3.1.2, Macquarie Bank Limited (MBL) agreed to conditionally waive the September 2023 and December
2023 quarter end covenant testing in respect to the interest cover ratio. The Directors expect that MBL will continue to work
with the Company until expiry of the debt facility dated 20 July 2025, and will have the continuing support of the bank.
In addition to this, should the Company be required to refinance the facility or settle the loan over the next 12-month period,
they are confident they would be able to seek alternative finance and / or consider further asset sales which could realise
significant off-balance sheet value of its intangible assets. With the assistance of recent market valuations and in accordance
with MBL covenant estimates, the Directors estimate the market valuation of the Group Rent Rolls and Mortgage Trail Book
at circa $29.3 million.
Based on the cash flow forecasts and other factors referred to above, the Directors are satisfied that the going concern basis
of preparation is appropriate. In particular, given the Group’s history of raising capital to date, the Directors are confident
of the Group’s ability to raise additional funds as and when they are required.
16.1.4 Comparative figures
Where required by AASBs comparative figures have been adjusted to conform to changes in presentation for the current
financial period.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its
financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in
addition to the minimum comparative financial statements is presented.
P a g e | 19
APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2023
Note 16 Statement of significant accounting policies
16.1.5 New and Amended Standards Adopted by the Group
A number of amended standards became applicable for the current reporting period. The Group did not have to change its
accounting policies or make retrospective adjustments as a result of adopting these amended standards.
16.2 Use of estimates and judgments
The preparation of consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
These estimates and associated assumptions are based on historical experience and various factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
Judgements made by management in the application of AASBs that have significant effect on the consolidated financial
statements and estimates with a significant risk of material adjustment in the next year are discussed below, where material.
Note 17 Company details
The registered office and head office of the Company is:
Street: 68 Milligan Street Postal: PO Box 7768
Perth WA 6000 CLOISTERS SQUARE WA 6850
Australia Australia
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
Directors' declaration
The Directors of the Company declare that in the Directors' opinion:
1. The attached financial statements and notes, as set out on pages 7 to 20, are in accordance with the Corporations Act 2001
(Cth) including:
(a) comply with Accounting Standard AASB 134: Interim Financial Reporting, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(b) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its performance
for the half-year ended on that date,
2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
This declaration is signed in accordance with a resolution of the Directors made pursuant to section 303(5) of the Corporations
Act 2001 (Cth).
On behalf of the Directors
GEOFF LUCAS
Managing Director and CEO
Dated this Thursday, 22 February 2024
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APPENDIX 4D THE AGENCY GROUP AUSTRALIA LTD
Interim Financial Report AND CONTROLLED ENTITIES
31 December 2023 ABN 52 118 913 232
Independent auditor's report
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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4D
AND CONTROLLED ENTITIES Interim Financial Report
ABN 52 118 913 232 31 December 2023
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