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In the wake of McGrath Limited announcing its FY18 financial results, which reveal the high-profile company’s modest return to profitability, CEO Geoff Lucas revealed that the first area of focus has been to stabilise the business to reduce the churn.
Mr Lucas said that this was done primarily by increasing the focus on communication, and also by building a support environment of productivity.
And this, the CEO said, was followed by a concentrated effort on recruiting new agents, which he has made clear on several occasions is the cornerstone of the company’s turnaround strategy.
“We are quite selective in who we look to join our organisation, but it’s about dialing up an increase in the focus on our recruitment activity,” Mr Lucas told REB.
“This is a really important part of the business, and our leadership team are all charged with doing that — making contact and talking to people about the future.”
McGrath Limited has taken a modest step forward in its turnaround ambitions, posting a $5 million-dollar profit for FY18 amid tightening market conditions, making good the guidance it previously provided.
For the 12 months to 30 June 2018, the company delivered an underlying EBITDA of $5.0 million, although revenue was down by 23 per cent to $99.2 million.
In an exclusive results presentation webinar to the media yesterday, McGrath reported that the results reflect the impact of a one-off restructuring cost of $4.0 million and impairment charges of $59.4 million.
It also reported that its balance remained liquid with no debt and $10.9 million cash in the bank, and that despite the well-documented departure of a clutch of its top-performing sales agents, it has maintained market share at 3.1 per cent.
Shift
Mr Lucas said that there is a new momentum developing.
“We are already seeing good progress in culture and agent recruitment, and critically, we are seeing some strong sales results within our key markets,” the CEO said.
Mr Lucas added that the company is also concentrating on improving its learning and development infrastructure.
“You know, McGrath for a long time has been seen as the leader in terms of education and so that has also been a very strong focus of us,” the CEO added.
“We have recently appointed a new head of learning and development and so we are strengthening the program so that when people come to McGrath, they know that they are going to be afforded the best training to make them as successful as possible.”
Mr Lucas said that McGrath is looking to attract both new-to-industry and existing industry talent.
“Predominantly agents that do show promise or a record in their respective markets,” the CEO said.
“But we have always been successful in attracting new people to the industry, and in putting them through our education process and, most importantly, giving them access to our team of existing successful agents.”
Direction
He added that there are recruitment targets in place.
“We have a disciplined focus on this and have specific targets that we have charged our leadership team with, and through to their sales management team, they have a very clear path to where we expect to move to.
“Now I am not at liberty to disclose those to you at the moment, but as I have said in the announcement earlier, we are pleased with the modest progress that we have started to make, and we think that will continue.”
Against some rumours of some earlier agents looking to return to McGrath, Mr Lucas was circumspect in his choice of words.
“We see the agent pool as being very broad, so we don’t focus on any one particular sector or group.
“Moreover, we are looking for agents that we think fit our philosophy, and so we don’t specifically target any particular group or organisation.”
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