Acquisitive real estate group The Agency (ASX: AU1) has today announced its first full-year EBITDA profit since listing at $2.66 million, backed by strong revenue growth as it looks to boost agent numbers further in the quarters ahead.
Facing challenges in response to COVID-19 and the pressures of a $12 million debt it needs to pay back by 30 September, the company's cash position has increased slightly to $2.7 million with the help of heady revenue growth of 48 per cent.
This almost doubling of sales means the company brought in more than $41 million in FY20, and results delivered in June are now flowing through with a strong sales pipeline in the current quarter.
However, in statutory terms the group reported a deeper loss of $9 million, most of which can be explained by a $5.3 million impairment of goodwill towards historical acquisitions; a conservative approach given the prevailing market uncertainty due to COVID-19.
If it weren't for this impairment as well as depreciation and amortisation of more than $6 million, The Agency would have recorded its first full-year NPAT since listing as well.
The Perth-based group needed to reduce the working hours of all staff in response to the pandemic, but today it reports all employees have been back full-time on full salaries as of June.
While The Agency adapted to restrictions on open houses and in-person auctions with digital solutions, it has rebounded since these restrictions have been eased.
"I am exceedingly proud of all The Agency has achieved in FY2020," says managing director Paul Niardone (pictured).
"To report a maiden EBITDA profit, positive cashflow, a strong gain in revenue and other key metrics is a major achievement and testament to the hard work and dedication of our agents and our staff, especially when considering the impact of COVID-19.
"Our quick response to COVID-19 has placed us in an enviable position, allowing us to rebound strongly in key markets. We have generated a strong sales pipeline which has flown through into the first quarter FY21 with a record 446 listings for July 2020."
The Agency is currently pursuing strategic partnerships and joint venture opportunities, and claims that based on its existing platform and cost structure - which is largely fixed - any future recruitment will directly contribute to EBITDA performance.
AU1 shares were up by 53.57 per cent at $0.043 at 3:53pm AEST, although this is still around two-thirds of their opening price in 2020.
Updated at 3:54pm AEST on 31 August 2020.