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Acknowledging the challenges facing the entire industry, McGrath CEO and founder John McGrath posited that the McGrath company has remained “very profitable” across FY2023.
In a statement to the ASX to announce the company’s FY23 results, Mr McGrath acknowledged “low listing levels and rising interest rates continue to be the greatest challenge for our industry, however with a possible plateauing of interest rates and signs of increased listings over the past few weeks, we feel that the worst is behind us”.
McGrath cited CoreLogic data to illustrate the market environment: transaction volumes have been approximately 20 per cent below what they were in the same period one year ago, which was also 5 per cent below the 10-year average.
Over the same period, the company also acknowledged that house prices have also dropped.
Against this backdrop, McGrath announced net profit after tax of $6.2 million for the 12-month period, posting underlying EBIT of $4.3 million (and underlying EBITDA of $6.1 million).
The CEO said: “The implementation of our strategies during the year, including signing on 18 new franchise offices and a further 8 per cent reduction in operating costs, has enabled the company to remain very profitable, as well as increasing market share in our key markets.”
“We are very excited about the great opportunity to continue to expand our brand on the east coast and we are laser focused and well poised to deliver our existing agents and franchisees the best tools and technology in the industry,” he continued.
With $27 million cash and no debt, Mr McGrath said the business is “delighted” to move forward with that amount of money, telling shareholders at the FY23 briefing that it’s “a very healthy position for us to be in”.
He also told shareholders, who will be entitled to a final dividend of 1 cent per share fully franked, as well as a special dividend of 2.5 cents per share fully franked, that “despite these uncertain times that we’re we have been in and perhaps we are still in to some degree, we think that these create great opportunities for the best quality brands, the best organised businesses, and those with strong balance sheets”.
“We believe we certainly fit into those three categories.”
Over the coming year, the number of McGrath offices should swell from its current figure of 125, the CEO shared.
Looking ahead, and flagging the continuance of strong buyer demand from owner-occupiers “in almost all markets” McGrath serves, Mr McGrath also forecast that increasing immigration “will be a win for the Australian property market”.
He believes that bodes well for the McGrath network, given most immigrants “generally find their way into Sydney and Melbourne, which is of course where we have many of our strongest offices”.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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