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The Agency has released its end-of-year financial results, and despite the group’s strong revenue growth, it has not escaped the tougher economic conditions of the housing market.
The Agency reported an 86 per cent growth in year-on-year revenue of $31.3 million, an increase from last year’s $16.8 million revenue.
However, an increase in expenses including salaries, advertising, rent and IT expenses saw the group have a net loss from continuing operations of $7.7 million, up from $3.8 million the year prior.
The biggest new expenses for the group include almost $10 million spent in salaries and benefits, close to $3 million increase in advertising and promotions, and rent and outgoings increase of $1.5 million.
The Agency recorded an EBITDA loss of approximately $4.2 million for the financial year; however, this included a one-off $1.3 million transaction in its purchase of Top Level.
Importantly, The Agency said that the results only included six months of operations from Top Level as the acquisition was only completed in January this year.
Without the acquisition, the company would have reported a normalised $2.9 million EBITDA loss which would have been down on last year’s $3.1 million loss.
The 86 per cent revenue increase was primarily due to a 31 per cent increase in combined gross commission income year-on-year which was bolstered by 2,419 sales, up from 667 in the 2018 financial year.
The company also sold $2.5 billion in property across its ecosystem, up from $400 million the year prior.
In a tough housing market, The Agency reported a growth of 43 per cent in listings with 3,430 listings and a record 4,337 properties under management, an increase of 29 per cent on the prior corresponding period.
The increase in agents from 185 to 272 as at 30 June was reflected in the increase in salaries, but a positive as the group moves forward with its growth strategy.
The Agency managing director Paul Niardone said this had been a company-making year for the group and showed that its disruptive model was working.
“This has been a company-making year for The Agency in which we completed the Top Level Real Estate acquisition, expanded into key real estate markets and recruited strongly, despite challenging wider market conditions,” Mr Niardone said.
“Since launching this business model less than three years ago, we have achieved outstanding financial and operating results and have attracted some of the best agents.”
The Agency confirmed it would continue to aggressively grow its brand into new and existing markets with a focus on maintaining a sustainable financial framework, with the group having already begun implementing a $2.8 million cost savings program.
“We are confident further revenue growth will be achieved and cost synergies realised over the coming financial year,” Mr Niardone said.
“We realise the need to implement measures to control our costs in the current environment and have identified and are already implementing these cost savings.”
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