McGrath defends IPO decision amid market volatility

John McGrath has defended his decision to list the real estate group on the ASX following the release of the real estate group’s half-year profit results.

McGrath Ltd's share price has fallen 25 per cent since the group listed in December last year.

Last week the group’s share price fell by 18 per cent.

“We are not influenced by the short-term share price volatility,” Mr McGrath told REB.

“We think we still made the right decision. We are on track to deliver on what we promised. Our reasons to list on the ASX are as valid today as they were on the day we listed,” he added.

The group announced its maiden half-year results as a listed company last week, and Mr McGrath said he was “delighted” to see the business on track to hit its prospectus forecast.

“As a business and a listed entity that’s important for us to deliver on those commitments,” he said.

“Sales are up 15 per cent, property management is up 28 per cent and home loans are up 41 per cent,” he said.

“We opened in Melbourne as promised with two offices there and more to go. So that has been very positive and well received by agents as well as consumers.”

McGrath has also grown its market share in NSW, the ACT and Queensland.

“The market in terms of listings is down one per cent and we are up 21 per cent, so from an internal perspective we have done a good job with all the things we can control and influence,” he said.

“Factors like the share market and how it responds to the sector, or our particular stock or just the market on a particular day are out of our control. They are not things we can influence except for delivering on our numbers and growing the business.”

Mr McGrath explained that his decision to float the real estate group is essential to its expansion, which will include strategic acquisitions over the coming years.

“We also think providing share opportunities for all our staff will be and continue to be a unique opportunity for us,” he said.

“This is a people business. If you can retain, reward and incentivise people to stay in the business with share schemes and buying into the company we see that as a positive.”

[Related: McGrath's rapid expansion continues with new office]

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