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ASX-listed network The Agency has seen a 6 per cent growth in revenue in FY23, bringing in $76.93 million and an increase in the number of properties sold.
Despite this, the firm reported a 7 per cent reduction in Gross Commission Income (GCI) to $95.4 million, which was said was due to a higher proportion of its sales taking place in Western Australia, where prices were lower, as well as dampened selling prices in the east.
While it sold slightly more properties in FY23, with 5,734 surpassing FY22’s 5,709, the gross value of properties sold also recorded a significant 7 per cent dip.
The firm regarded its financial year results as a win during a year in which it noted national market transactions decreased by 20.3 per cent.
As such the firm pushed ahead with a number of investments that contributed to an EBITDA loss of -$1.3 million.
One such draw on company funds included the acquisition of the Bushby Property Group Tasmania for close to $5 million, taking over one of Australia’s oldest family-owned agencies and a prominent name in the south of the Bass Strait.
During the financial year, the company also announced a new strategic alliance with MDC Trilogy Group, which provides an opportunity for MDC Trilogy principals to sell their business, including rent roll assets, and join The Agency as sales agents.
The Agency’s CEO and managing director, Geoff Lucas, characterised the EBITDA loss as necessary for growth, commenting that “the investments undertaken in FY23 which have contributed to an EBITDA loss will generate returns for many years to come”.
And he noted that much of the loss was driven by activity in the first part of the financial year that has since started to trend in a positive direction, particularly due to a rebound in sales commissions and improved operational performance.
“The second half FY23 cost of doing business materially reduced to 32.6 per cent of revenue from 35.9 per cent in the first half. As a result, the second half EBITDA loss reduced significantly from $950k EBITDA (Pre AASB16) loss in the first half, to $350k EBITDA (Pre AASB16) loss in the second half,” Mr Lucas commented.
Estimating its national market share as 1.23 per cent – up from last year’s 0.98 per cent – the firm said it has its sights set firmly on capturing an ever bigger slice of the pie.
“Our total commissions of $95.4 million is just a fraction of the $6 billion total Australian residential real estate commissions paid by vendors in FY23 across Australia. We believe our contemporary business model, national reach, culture and commitment to excellence in customer service means we are well positioned to expand our share of this $6 billion residential sales commissions market,” Mr Lucas said.
Looking ahead, the CEO said the firm would be looking to strengthen its existing presence and establish a name in locations not yet home to The Agency.
“Across FY24, The Agency will continue to focus on further market share growth, across both existing geographical areas and additional regions across Australia. The Queensland and Victorian states represent nearly 50 per cent of Australian annual sales transaction volumes, and following the January 2023 commencement of QLD and Victoria/Tasmania State General Managers, additional focus on these states is expected to assist in continued national market share growth in FY24,” Mr Lucas said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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