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The CEO of listed real estate group McGrath (ASX: MEA) has resigned today, just after the company turned things around and posted a full year profit of $700,000.
Geoff Lucas' (pictured) resignation from the top role of McGrath is effective today, and he will be replaced by former ANZ (ASX: ANZ) executive Edward Law.
McGrath chair Peter Lewis says Lucas guided the company through a "difficult" two and a half years, culminating in today's FY20 profit.
"We thank Geoff for navigating McGrath from losses to profitability through the current COVID crisis, and we wish him all the very best in his future endeavours," says Lewis.
Lucas says he is leaving the company in a strong position.
"It has been pleasing to lead this team through a period of regenerating the McGrath business and the turnaround marks a new beginning for the Company," says Lucas.
"The business is now in a strong financial position to navigate through the uncertainty of the current environment."
The former CEO has retired on a high, with McGrath reporting an 11 per cent rise in revenue to $91.69 million, and EBITDA of $3.7 million, equating to a $10.1 million turnaround from an EBITDA loss of $6.4 million last year.
The company's NPAT of $700,000 is a significant improvement too, up from a FY19 loss of $9.7 million.
FY20 highlights for McGrath included the acquisition of four company owned offices and the addition of new franchise offices in Ulladulla, Mollymook, Albury Wodonga and Mansfield.
The company closed off the financial year with no debt, $17.3 million in cash, and $30.2 million in net assets.
Because of COVID-19 uncertainty, the company has decided not to pay a FY20 dividend.
Under the guidance of new CEO Edward Law the company appears to be optimistic about FY21, with Melbourne's Stage 4 lockdowns expected to only have a limited impact on its financial results.
"While dwelling prices are expected to decline over coming months, the government stimulus packages, support by the banking community and record low interest rates, are likely to cushion the extent of decreases," says McGrath.
"Some softness in rents is likely to continue through the uncertain economic conditions expected throughout the 2021 financial year."
Shares in MEA are up 23.68 per cent to $0.24 per share at 2:40pm AEST.
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