MCGRATH SHARES IN TRADING HALT AMID PROFIT REVIEW

Written on the 15 April 2016 by Nick Nichols

MCGRATH SHARES IN TRADING HALT AMID PROFIT REVIEW

SHARES in real estate group McGrath Limited (ASX:MEA) have been placed in a trading halt pending a review of the company's profit performance which has been triggered by a slowdown in the property market.

McGrath has announced it is reviewing its FY16 prospectus forecast in light of current trading conditions.

"The trading halt is requested in order to allow McGrath time to finalise its analysis of information and review by the board," says the company in a statement to the Australian Securities Exchange.

"The trading halt is requested pending an announcement in relation to an update of how McGrath is progressing against the prospectus forecast."

McGrath shares have struggled since listing at $2.10 late last year amid growing concern of a property bubble, particularly in its key Sydney market.

Industry concerns over an oversupply in apartments have been raised in Sydney and more recently Brisbane, lending weight to fears of a price correction.

The company had forecast a gross profit on a statutory basis of $81.4 million for FY16, from total revenue of $125.5 million.

The statutory net profit was expected to be $10.1 million, while on a pro forma basis the company was targeting $18.2 million.

McGrath posted an interim net profit of $400,000 for the December half-year, down 82 per cent from a year earlier.

The result included IPO and acquisition costs of $11 million and was delivered on a 33 per cent lift in revenue to $54.3 million.

When releasing the interim results, CEO John McGrath warned in February that changes to negative gearing laws, a tightening of lending rules by banking regulator APRA and a slowdown from Chinese buyers have created challenges for the sector in the short term.

He said the short-term outlook was weaker than originally anticipated ahead of the company's December IPO.

McGrath shares last traded at $1.30, a steep discount to their issue price.

Last month, John McGrath scooped up 317,000 shares in his company for an average of just over $1.35 a share.

McGrath Limited is expected to lift the trading halt on Tuesday, April 19.


Author: Nick Nichols

Latest News

SUNCORP BLOWS NATURAL DISASTERS BUDGET BY $40 MILLION

Suncorp Bank (ASX: SUN) has announced that its natural disasters claims costs have blown out by $40 million from its ...

HIGHER OIL PRICE BOOSTS SENEX REVENUE IN SECOND QUARTER

BRISBANE-based oil and gas producer and explorer Senex Energy (ASX: SXY) has increased sales revenue 28 per cent i...

STAFF CHURN BLAMED FOR MCGRATH EARNINGS DOWNGRADE

MCGRATH will fail to meet earnings forecasts after some of its star real estate agents defected to growing Perth firm...

MCBAIN RESIGNS AS BELLAMY'S DIRECTOR WHILE THIRD CLASS ACTION MOVES CLOSER TO SECURING FUNDING

LAURA McBain (pictured) has resigned as a director of Bellamy's Organic (ASX: BAL) today, effective immediatel...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter