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Real-estate group McGrath (ASX: MEA) has suffered through a transitional period, bearing the weight of an industry in flux.
McGrath's revenue is down 23 per cent to $99.2 million and the company has also reported an underlying net loss after tax of $1.48 million.
McGrath CEO Geoff Lucas blames the company's poor results on a year marred by leadership transitions and correcting instability.
"With the new Board and senior leadership team settled in, the last quarter of FY18 saw the beginning of a period of stabilisation, and we are in the midst of a business turnaround," says Lucas.
"We are already seeing good progress in culture and agent recruitment, and critically we are seeing some strong sales results within our key markets."
The company attributes its dip in revenue and reduced earnings of $5 million (before a $59.4 million impairment charge) to a number of key factors including difficult market conditions, lower sales volumes and the departure of some key sales agents.
"The ability of the business to generate positive earnings even after a $30.2 million reduction in revenue is testament to the robustness of the McGrath brand and position in the real estate industry," says the company in its statement on the ASX.
During the year, McGrath secured a significant $10.7 million investment from industry giant Aqualand, providing the business with additional capital and resources to grow.
Aqualand is one of Australia's premier residential property development and investment groups with a portfolio of 18 sites that have a collective gross development value of approximately $5 billion. McGrath was granted the first right to discuss appointment on new Aqualand developments as an agent to market new developments and to provide property management services for leased apartments within new developments.
The McGrath board has decided to not pay a final dividend, instead choosing to focus on conserving cash for business reinvestment.
CEO Lucas says the board is focused on restoring McGrath to healthy profitability in the coming financial year.
"While the current property market conditions are challenging, we believe this will continue to generate some very real opportunities as more agencies and sales people will be seeking to join larger, well capitalised, quality branded groups like McGrath," says Lucas.
"Our strategic plan has, as its centrepiece, the goal of growing McGrath's franchised and company offices across Australian over the next five years."
"The Board and the new management team are united and focused on stabilising the business and returning it to growth in FY19."
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