Property market slams McGrath with $15.6 million loss
26 August 2019, Written by Business News Australia
A difficult property market has put a strain on real estate group McGrath, posting a net loss after tax of $15.6 million at the end of FY19.
Company revenue was down 17 per cent to $82.7 million, and underlying EBITDA came in within guidance at negative $6.4 million.
McGrath has blamed its results on "difficult market conditions" which resulted in lower sales volumes and lower prices nationally.
Sales volumes were down in Sydney by 21.9 per cent, in Melbourne by 27 per cent, and in Brisbane by 13.4 per cent.
"The market has remained challenging over the past 12 months, however we remain optimistic about the future," says CEO Geoff Lucas.
"We recognise that cost control is imperative to reflect the difficult operating environment, and this is an ongoing focus while we continue to grow our core business, enhance our technology solutions and utilise data driven applications to enhance our customer experience."
At the end of FY19 McGrath's balance sheet is in a solid position with net assets worth $30.8 million, no debt, and $10.3 million cash.
Looking forward, Lucas says there are signs of rejuvenation in the national property market.
"Notwithstanding market conditions, we have seen improved buyer sentiment in recent months," says Lucas.
"This sounded the bell for property market stabilisation, along with APRA's easing loan serviceability criteria and subsequent interest rate drops all contributing to the bottoming of the residential sector."
"While listing volumes remain at a decade low by up to 30 per cent compares with historical levels, we have seen stronger auction clearance rates and healthy buyer engagement. This signals an eventual recovery in listings volumes, indicating a potentially later spring/summer selling season this financial year."
Business News Australia
Author: Business News Australia