Recruiting more sales agents and expanding geographically are key planks in RUN Property’s 2014 growth plans, as the ASX-listed company released its latest financial results earlier this week.
The company, which manages a rent roll valued at an estimated $60 million, reported a $2.3 million profit before tax, up from a $900,000 loss in the 2012 financial year, and a $5.6 million loss in the 2011 financial year.
Net debt levels fell by $5.4 million on-year to $11.4 million. This debt level is down from $34 million in fiscal year 2011. Cashflow from operations grew $400,000 to $3.5 million.
In terms of new sales recruits, as of September the company had taken on 28 sales agents.
“Given the strong sales market we feel the time is right to invest in growing this part of our business,” RUN Property CEO Rob Farmer said at the company’s annual general meeting (AGM) on Tuesday.
“We have recently executed a brand refresh, built the business systems and processes to support growth and are in the process of recruiting and inducting new sales team members.” Mr Farmer said in his presentation that, based on research by Macquarie Bank in 2012, every dollar of management income could be matched by a diollar of sales income.
The push for more sales agents comes at the same time RUN Property has launched operations in Adelaide and Townsville, expanding its network to 17 offices across NSW, Victoria, South Australia and Queensland.
“An important part of growing the RUN business is capturing market share in new geographical areas and there are exciting opportunities in this regard,” Mr Farmer said.
“We believe we can achieve growth by leveraging existing partnerships with parties who can assist us in providing business leads in these geographies.”
In relation to the new office in Adelaide, Mr Farmer said the company plans to achieve growth by leveraging its existing landlord base, who the company believe to have additional properties in this region, as well as working with some strategic partners who have the ability to refer clients.
“The South Australian market represents an exciting opportunity where fees are typically 20 per cent higher [based on Macquarie Bank research] than in Victoria and New South Wales and our expansion into South Australia represents our commitment to providing our services throughout Australia and achieving our growth targets,” Mr Farmer said.
Mr Farmer told Real Estate Business that RUN Property was continuing to explore opportunities in markets “where’s there is activity”.
The company identified two other areas of growth potential, namely its AgentPlus and Maintenance Matcher software packages.
In relation to AgentPlus, with RUN Property recently appointed a new leader for the business, namely former Computershare executive Andrew Heard.
“Agentplus represents an exciting opportunity, offering technology and administration services on an outsourced basis to real estate agents,” Mr Farmer said at the AGM.
“We plan to grow this part of the business during FY14 and I am delighted to welcome Andrew Heard to the team as general manager who will drive this growth.
“Andrew is an experienced executive having worked at Computershare for the past 14 years holding various roles including director of client services in the UK and Computershare Document Service in the USA.”
In relation to Maintenance Matcher, Mr Farmer told the AGM the new software aims to provide “reliable and cost effective maintenance in differing geographies with timely and accurate quoting is becoming more difficult”.
“We have now finalised the technology development for this new business and are ready for a staged launch. I am pleased with the progress of this new venture and look forward to keeping shareholders updated on progress.”
The company’s public holding name is also set to change, with shareholders approving a move to Real Estate Corp Limited. Mr Farmer stressed that this change will not affect the individual company trading names of RUN Property, AgentPlus or Maintenance Matcher.