Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

McGrath admits to poor sales amid 'challenging' market

By James Mitchell
19 April 2016 | 1 minute read

Listed real estate group McGrath Limited has conceded the group has continued to experience “unforeseen low volumes of listings and sales” in the first half of this month.

McGrath hit the ASX with a trading update yesterday after leaving the market to speculate over the weekend following its decision to halt trading early Friday morning.

“Even though an unforeseen low volume of listings and sales started to emerge in the latter part of March 2016, McGrath was performing slightly ahead of management’s budget required to achieve Prospectus forecast for the full year ending 30 June 2016,” the group said in an ASX statement.

Advertisement
Advertisement

According to the trading update, over the 9 months to 31 March, McGrath’s revenue was 6 per cent above budget. Meanwhile, revenue from pre‐existing company-owned offices was 9 per cent above budget, while revenue from company-owned offices acquired from the Smollen Group was 10 per cent below budget.

“However, McGrath has continued to experience an unforeseen low volume of listings and sales in the first half of April, particularly in the North and North Western suburbs of Sydney,” the group said.

“The company believes the fall in listings in the North and North Western suburbs of Sydney is in line with the market in those areas,” it said.

McGrath noted that “current conditions remain challenging in certain market segments”, and with listings and sales volumes not expected to materially change in the near term, the real estate group has adjusted its expectations for sales volumes and values for the last quarter of FY16.

“Listings in the company-owned offices acquired from the Smollen Group (located in North and North Western Sydney) are now expected to be 25 per cent to 30 per cent lower in the final quarter of FY16 than was expected for this period when the prospectus forecast was prepared,” the group said.

“This compares to listings in pre-existing company-owned offices expected to be flat to slightly lower over this quarter.”

On the basis of the current quarter’s listings trend (assuming there is no improvement in listings volumes) and current market conditions, McGrath expects to generate FY16 revenue in the range of $136 million to $140 million, and pro forma EBITDA in the range of $26 million to $27 million.

The group highlighted that while current industry volatility makes it challenging to forecast the 2017 financial year, “the long term fundamentals of the real estate industry remain attractive, underpinned by historically low interest rates and population growth”.

[Related: Agents criticised for revelling in McGrath's sliding share price]

McGrath admits to poor sales amid 'challenging' market
JohnMcGrath250x140
lawyersweekly logo

Tags:

ABOUT THE AUTHOR


Listen to other installment of the Real Estate Business Podcast

 

Do you have an industry update?

top suburbs

12 month growth
Travancore
49.78%
Timboon
49.57%
Dolphin Point
49.51%
Nyah West
49.42%
Preston Beach
49.29%
Newington
48.97%
Killcare Heights
48.89%
Wundowie
48.77%
Homebush
48.44%
Glenside
48.28%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.

cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china cheap nba jerseys from china wholesale nba jerseys from china discount nba jerseys from china