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Eastern seaboard sales pay off for The Agency

By Juliet Helmke
26 February 2024 | 11 minute read
geoff lucas km4hxi

As the industry loves to remind, location is everything. And for The Agency, that truth has been reflected in their half-year results.

The ASX-listed firm delivered its results for the first half of the 2024 financial year, reporting a 9.4 per cent increase on the first half metrics from last year in the number of properties sold, and a 28.7 per cent increase in the value of properties sold.

Ultimately, the firm reported transacting $3.3 billion worth of properties over the period, significantly beating the $2.6 billion it sold in the first half of FY23.

Lifting the lid on the firm’s strategy, the growth was attributed to an increased contribution of sales from higher-value eastern seaboard markets, meaning that business has been picking up for the firm in some of Australia’s major markets.

The higher-than-average selling prices within these areas led to a record-setting six months for the firm’s agents, who hit a new high mark for gross commission income, taking in $56.9 million over the period – a 24.5 per cent increase over the $45.7 million they brought in during the first half of FY23.

But the firm noted that this didn’t necessarily track completely with revenue growth, as the change in state mix brought revenue growth for the period to $43.9 million, which is 17 per cent higher than 1H FY23’s $37.5 million.

The Agency’s managing director and CEO, Geoff Lucas, reported that the shift to eastern seaboard markets ultimately allowed the firm to tip into positive EBITDA territory.

“We are pleased to be reporting a record half result for the number of properties sold and resulting gross commission income generated. Furthermore, we are pleased to have moved through the critical mass stage for our business now generating a positive EBITDA result, with $0.56m EBITDA recorded,” Mr Lucas said.

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The firm also credited a “disciplined approach to operating expenses” for the EBITDA growth.

On the property management side, the business reported it notched another record, with an 18 per cent in management fees from properties under management between 1H FY24 and 1H FY23. The firm took in $4.13 million in management fees in the first half of this financial year, versus $3.50 million during the same period last year.

The group currently manages 10,092 properties, having rapidly scaled up operations since December 2022, when it had 5,868 properties under management.

The asset value of its current management portfolio is currently estimated to be worth approximately $9 billion. Roughly half of the properties the firm manages are owned by The Agency, while the other half are under management rights.

The total rent collected for owned and managed portfolios amounted to $135 million over the last six months.

Reflecting on the results, Mr Lucas said he felt the company was at at an important inflection point”, with the firm more assured in its ability to report sustainable EBITDA growth into the future.

He commented that the focus on the months ahead would be in continuing to grow the size of The Agency team.

“In the six months since 30 June 2023, we’ve continued to increase the quality of our sales team. Across the half, we increased our team to 411 property partners as at 31 December 2023, compared to 399 as at 30 June 2023,” he noted.

“Despite achieving our highest sales performance yet for a half year, our $56.9 million GCI is a small fraction of the $6.2 billion total annual Australian residential real estate commissions pool. Our business is well positioned to continue growing our share of this pool,” Mr Lucas added.

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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