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

CROMWELL TRADES STEADILY IN FIRST HALF

CROMWELL Property Group has maintained a steady operating profit at $0.045 per security in the first half of FY17,...

WHY NEXTDC'S STOCK IS SOARING

AFTER posting its interim result, NEXTDC (ASX: NXT) gained more than 12 per cent on the stock market before noon.
...

PWR PROFIT CRASHES AS DOLLAR RISES AND COSTS MOUNT

A RISING Aussie dollar has offset PWR Holdings Limited's (ASX:PWH) overseas growth in the last half, forcing a...

SUPER RETAIL GROUP RESULTS SHINE ACROSS THE BOARD

A WELL-planned and executed half has paid off for Super Retail Group (ASX:SUL) as it posts a net profit result up ...

Related News

EVERYTHING YOU NEED TO KNOW ABOUT THE NATIONAL BROADBAND NETWORK

THE National Broadband Network (NBN) is more than an internet connection, it is an opportunity to transform your b...

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter