STAFF CHURN BLAMED FOR MCGRATH EARNINGS DOWNGRADE
Written on the 24 January 2017 by Business News Australia
MCGRATH will fail to meet earnings forecasts after some of its star real estate agents defected to growing Perth firm The Agency.
The ASX-listed company says it will not meet Bell Potter estimates for full-year EBITDA of $20.9 million due to a slow second half.
McGrath blames unprecendented low listing volumes and the exit of 36 sales agents from its company owned offices for failing to meet the analyst's expectations.
It was recently revealed that The Agency had lured five McGrath agents with large sign on bonuses.
CEO, Cameron Judson, says the company has put a concerted focus on identifying, attracting and developing high performing talent.
"We have recently launched 'McGrath Future', a compelling remuneration and longer term wealth creation framework specifically for high performing agents," he says.
"We have an unparalleled track record of growing and nurturing the best real estate agents in Australia, and aim to maintain that.
"However, the recent net outflow is more than we usually see, and we believe it prudent to alert the market to the likely impact."
The company owned segment currently has 225 sales agents.
Judson says the company's other business units are continuing to see solid growth.
In 2016, McGrath opened 18 new offices, 3 Company owned and 15 Franchises, and plans to open additional offices, including its Victorian expansion plans, over the next 12 months.
McGrath finished the day's trading down 5.56 per cent at $0.765 per share.
Author: Business News Australia